The Performing Rights Society (PRS) for Music and SoundCloud have come to a licensing agreement, meaning legal proceedings between the two companies have ceased.
The deal means artists will be paid royalties for music streamed on the service when SoundCloud launches its new subscription and advertising models in Europe next year.
"This ends over five years of discussions on the licensing requirements for the platform, resulting in a licence under which our members are fairly rewarded for the use of their music," Robert Ashcroft, chief executive of PRS for Music said.
"The safe harbours in current legislation still present ambiguity, and obstruct the efficient licensing of online services, but our agreement with SoundCloud is a step in the right direction towards a more level playing field for the online marketplace."
PRS for Music said this agreement will make a difference to general music distribution via streaming, while giving SoundCloud the opportunity to widen its product offering and provide more music to fans. It's also a big step for the music industry, ensuring the accessibility of "metadata and the identification of repertoire for royalty distribution."
"SoundCloud is a platform by creators, for creators; we’re working hard to create a platform where all creators can be paid for their work, and already have deals in place with thousands of copyright owner," Alexander Ljung, founder and CEO of SoundCloud, added.
"PRS for Music is also fully committed to creators, and we’re pleased to have reached an agreement that will expand revenue opportunities, improve the accuracy of royalty distributions, and launch new services for our 175 million monthly active listeners on SoundCloud in 2016."
