The daringest startups break all the rules, and people start music companies to shake things up.
But sooner or later, growing music startups find themselves bowing to the music industry’s maze of complicated rules. Everyone needs to get paid, but from the perspective of the entrepreneur and music fan, this can be such a buzzkill. And, it’s rarely factored into ambitious models and ideas.
And so it is with Soundcloud, a seriously grown-up destination that can no longer evade detection from large rights owners. Just recently, the group tapped Audible Magic to scan its collections for copyrighted works, and that has introduced a lot more DMCA takedowns and copyright policing.
And how will that affect the delicate ecosystem? “SoundCloud’s decision to use Audible Magic points to a larger question: How big can a music-hosting service get while still supporting DJs and remixers?” Miles Raymer posed in a great piece for the Chicago Reader. “Is it possible for a site large enough to show up on the radar of the major labels to avoid accepting the majors’ strict-constructionist views of copyright?”
The problem is that DJs oftentimes embed small, altered clips of copyrighted content into a mix, perhaps with some notion of fair use in mind. Lawyers and labels sometimes laugh at those interpretations, and the stretch that fair use definitions get. But Soundcloud appears to be letting rightsholders call the shots on what constitutes a violation, instead of getting into a sticky referee position. Whether that alienates DJs and producers – the first-moving backbone of SoundCloud – remains the next question.