With Warner Music already owning a 5% equity stake in SoundCloud, the second major label to be chasing this option is now Universal Music Group, which is said to be close to making a deal with the streaming service, reports Music Week. The equity stake in SoundCloud would be exchanged for licensing rights and guarantees on a subscription-based tier in the future.

A "source" has told Music Business Worldwide:

"Universal had a couple of aggressive choices: they could either sue SoundCloud, which wasn’t off the table, or refuse to play ball with them and watch them slide out of existence as money ran low. But Universal knows that a world with a SoundCloud that it can control is better than a world without SoundCloud full stop – especially if that leads to a hundred clones popping up online. Initially, UMG’s demands were completely unacceptable to SoundCloud, but the balance of power – of who needs who to prosper – appears to have shifted since those days."

A move to a subscription-based service has been rumoured for a while; a contract detailing how it would work did appear online back in June, but was finally confirmed by SoundCloud's co-founder and CTO, Eric Wahlforss, last month.

Yet to make a deal is Sony, the third of the "big three" major labels, who decided to start removing its artists from SoundCloud earlier this year in May, citing a lack of "monetization opportunities". The new deal with UMG, plus the confirmation of future subscription tiers, should help to change Sony's mind.