SoundCloud’s Major Label Negotiations Crumble…

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SoundCloud recently announced that they were going to start paying artists. To do this, they announced a partner program that would allow the most popular artists to put advertisements on their tracks. The artists generate money from these ads and everyone is happy, right?

Well no… Not really.

The major labels say that SoundCloud needs to strike up deals with them. The platform was originally meant for smaller artists to have a tool to promote themselves, but has moved beyond that. Many users upload tracks they don’t own the copyright to. SoundCloud automatically detects and removes many violations, but there are still a lot of tracks that go undetected.

It was previously reported that SoundCloud was close to making deals with the majors, but the Financial Times says this is not the case.

Negotiations have reportedly come to a halt because the labels are unhappy with SoundCloud’s terms. They say Universal has stopped negotiating altogether.

An anonymous person at one of the major labels said: “The clock is ticking on how long they can continue operating as a service that’s unmonetised.”

SoundCloud raised $60 million this year, valuing them at about $700 million.

 

Nina Ulloa covers breaking news, tech, and more. Follow her on Twitter: @nine_u

9 Responses

  1. ja

    good. when they took away the dropbox they sent a clear message indies were no longer welcome since they were courting the big boys. now they roll out this pitiful “monetization” scheme to try and lure them back, really? being a third rate youtube, that’s the plan to “make amends”? i hope they sell it for $1, as much as their integrity is worth.

    Reply
  2. yummy

    curious how their payouts compare to Spotify. Artists love using Soundcloud but never complain about them

    Reply
    • Anonymous

      Their offer was something more akin to Youtube’s rates… roughly 5-10x less per stream than Spotify pays for usage.

      Reply
  3. Stephen King

    This sucks. I like Soundcloud. Ja — I’m an indie, I think they *do* a good job of supporting Indies, and Soundcloud is a great tool and I’ve found soooo many interesting artists on it https://soundcloud.com/stebankag. I’d happily pay a low subscription to stay on it. I pay e-Chords $2.99 a month, for example (less than a latte). I’m also a business and techie guy http://www.stephdokin.com They have 175 million users. They lost $29 million last year. Let’s say they decided to charge the same $2.99 / month. They would need 808,249 users to pay that monthly charge in order to make $29 millin. That is only 0.46% of their entire user base. Anyway, pretty easy problem to fix for Soundcloud to stay a viable business, IMHO.

    Reply
    • JTVDigital

      Agree.
      And when it comes to right holders, it should not be that difficult for Soundcloud to offer them a ContentID-like solution where their copyrighted content could be monetized with ads, while the non-copyrighted content would stay ads-free for the users.

      Reply
  4. Remi Swierczek

    Another purpose less music mutant with no idea where is the money or monetization.

    I can see them as a pay out bank and supplier of coded tunes to Radio and streaming converted to music store operating under Discovery Moment Monetization. Otherwise they have no purpose, or should have no right to exist!

    Reply

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