After Heavy Threats, SoundCloud Agrees to Label Licensing Talks…

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When it comes to music licensing, SoundCloud has been getting away with legal murder.  But maybe that’s a party that can’t last forever.

According to a pair of sources now speaking with Digital Music News, SoundCloud is now engaged in serious licensing discussions with major labels and publishers.  The sources will remain confidential.


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SoundCloud has been a major force in the music world for years, and it’s unclear why these licensing discussions are starting now (or, why they weren’t concluded earlier).  Currently, SoundCloud operates under the Digital Millennium Copyright Act (DMCA) loophole, which basically grants immunity to sites with third-party, user-uploaded content.

(here’s the detailed legalese on SoundCloud’s site)

The rules are pretty simple: as long as a process exists to eliminate content that is flagged by the content owner, SoundCloud steers clear of any legal entanglements.  The only problem is that rights owners are responsible for notifying SoundCloud each and every time an infraction occurs, which is essentially impossible.

But sources insist there are serious steps that labels can take, and according to one of the sources, major labels are not at all comfortable with the “DMCA funny business” arrangement anymore.  “Their [catalog] is all over SoundCloud, and it’s essentially too hard to police but that doesn’t mean they won’t start,” the source relayed.  “If you look at what’s happening over at Google and YouTube, you have [groups like] the [British recording trade group] BPI flooding Google and YouTube with takedown notices.”

“SoundCloud doesn’t want to start that because they could get completely flooded [with DMCA takedown demands].  And that’s just one way [the major labels] will start a war.”

Critical to the discussion is that Google has the massive legal and staffing resources to keep labels at bay, ensure legal compliance, and essentially create a separate copyright system that benefits Google.  But Soundcloud isn’t as big, despite a massive tranche of funding (of several hundred million).  “They aren’t pulling from a pile of billions, which means everything in legal terms” the source continued.

“Unlike Google and YouTube, they can be touched.”


More as more information becomes available.

Written while listening to Metallica, Modest Mouse, Eminem, and Nate Ruess.

32 Responses

  1. Anonymous

    But isn’t Google rumored to give legal support/advice to services like Grooveshark and Soundcloud to prevent any decisions that could potentially affect Youtube?

  2. john

    i’m sure they do and i think they even filed amicus briefs on behalf of several small copyright related companies in the past to protect their own precedent that was achieved in the viacom v youtube rulings.

  3. Nissl

    I looked up some of those albums on Youtube. Roughly 10x the amount of piracy in the last year via Youtube compared to Soundcloud.

  4. Anonymous

    ““Unlike Google and YouTube, they can be touched.””

    Um, remember what happened to the untouchable MegaUpload?

    Google is just another portal to organized copyright crime — which means it could be gone tomorrow.

    Don’t forget that Google is at war with every single content provider and literature/movie/art/music organization in the world, and there’s no doubt that one — or several — are going to take Google to court again.

    Lawsuits are the only way you can communicate with Google.

    YouTube would’ve been sued to death years ago without ContentID. And ContentID only exists because of the Viacom case.

    • TuneHunter

      Google will keep winning, they are the best partner of federal government in our drift to East Germany.

      The only way to succeed is convert Google from religion of advertising to religion of monetization.
      If we can clearly show to Google greener grass on the other side they will quickly make few key acquisitions and then flip up side down lobby efforts, “fair use doctrine” and business model.

      100 billion dollar industry with 50B YouTube would be unavoidable.

  5. Dan

    ”If you look at what’s happening over at Google and YouTube, you have [groups like] the [British recording trade group] BPI flooding Google and YouTube with takedown notices.”

    Or put in non pirate garbage speak – you have companies who are protecting their members rights and asking for sites which make a fortune from the sale / streaming of music without giving a penny back to the people who actually made it to actually pay the rights holders

  6. Yep

    About time. The article doesn’t make any sense though. Soundcloud pay nothing to labels but YT pay millions, clearly compared to Soundcloud YT and definitely the good guys. Soundcloud need to sort it out.

  7. Anonymous

    “Or put in non pirate garbage speak”

    Yeah, we need a Pirate —> English translation service here.

    I ran Paul’s favorite pro-pirate euphemism file swapper through Google Translate the other day, but it didn’t speak Pirate. Yet.

    Now I know what it means in Russian, though: подкачки файла

  8. hippydog

    I hope it gets worked out without too much of a kerfuffle..

    I’m of two minds about it..
    Soundcloud is one of the few services that I 100% agree it needs to pay its fairshare,
    its also a very useful tool used by artists and fans, and i truly think does more good then harm..
    IE: its one of those things that I think SHOULD get a little bit of leeway and be allowed to grow, because in the long run it will be good for the artists..

    my 2 cents

  9. DUDE

    Eh… Soundcloud wasnt really designed to be a streaming service a la Spotify, it was designed for people to host their own sound files and share them with the understanding that it was royalty-free

    Id almost rather see them crack down on people posting copyrighted content and continue serving that purpose, I feel like trying to strike licensing deals and pay royalties could cripple them just as easily as a flood of DMCA takedown notices or a lawsuit

  10. Rehdh

    I’m sick of all of this copyright infringement overextension.If a person is uploading exactly the same material than it’s infringement,but if it’s a remix they should leave it alone.If they start taking down remixes I’m through with soundcloud.And don’t start with that get permission bs either!Major labels will never even respond to ordinairy people!If this continues the internet gradually becomes useless!Watch all of the stupid responses I get.

    • Ya

      Ya, I agree with Rehdih. We should be able to take people’s intellectual property and ‘remix’ it a little and call it our own, without any consideration being paid to the original creator. This idea that when you when you write a song, you should have some copyright protection is obscene. Nobody should be able to profit off of what they write or record. If someone wants to remix it, so be it. I should be able to change 1 note and then be free of any complainers. The entire regime of copyright should be scrapped. Song writers, sound recording engineers, backup singers, owners of the master recording, and everyone else should be made to live in a world where none of them get paid if I change the song a little bit and profit off of their genius. Seriously. This is 2014. Nobody should be allowed to make money from the music they create, period. 🙂

      • hippydog

        You are correct, as per the copyright laws..

        Where i agree is the “profit” part..
        if some DJ remixes or does a mashup, the “profit” should stay with the original artist..
        Most of the soundcloud users are people doing covers or mixes, and are not LOOKING TO MAKE A PROFIT.
        I also believe an artist should have the right to not allow people to make changes to the original.. (opt out)

        “Rehdh” makes a good point though.. without something like soundcloud there is no viable option for people to do this .. (besides youtube).. There is NO ‘clearinghouse’ for stuff like this..

      • Destydan

        Remember numbskulls, its not just people “remixing” other (famous) peoples tunes that are being taken down, it’s predominantly people who post mixes and radio shows, which is an astronomical amount of people, actually bordering on ridiculous, especially considering such mixes are always free.. It gets even more ridiculous when people who are legit and even thriving producers/bands can be sued for infringement for merely accidentally having the same name or releasing the same named tune.. It happened to a major New Zealand live dnb band Shapeshifter who despite 2 previous albums and tours of EU/Uk had to change their name in 2007 to Shapeshifter NZ after some EU douchebag one hit house prod who had a track called “Shapeshifter” filed a suit & just happened to have the money to win.. The simple truth is that the major labels don’t give a fuck about protecting artists intellectual property and they dont care about music or art, just the labels “product” and bottom line, they have always screwed the artists over paying them about 1% of a discs worth, and so many artists big and small have had to fight just to be paid.. The labels are fighting Soundcloud because it competes with their failing distribution model and they have succeeded in that war, Soundcloud is dead, djs aren’t posting mixes anymore and more and more prod/bands hate it by the day.. Once Soundcloud has been turned into a less functional Pandora then it will disappear altogether, after that Bandcamp will be the next “Copyright Infringement” target, and so on.. It’s got nothing to do with protecting the artists, it’s all to do with protecting corporate music product and control of creativity.. Get with it.. The only solution is to fight it.. Do it for the love of music..

    • Versus

      The Internet becomes useless if you cannot post bootleg remixes?
      Now there’s hyperbole!
      Except you forgot the obligatory “Nazi” reference.

  11. Custus

    Copyrights are a joke and people who succumb are suckers. How many country and western songs use the same chord progression C-F-G?……Billions and nobody “owns” those chords. How many rock and roll songs use A-G-D? Billions again. Does anybody “own” these chord progressions? NO! How about the major or minor scale? Free to the public. Words used in vocals? All free to the public.

    My point is that professional musicians “steal” all kinds of material from previous artist and tweek it just enough to be covered by some BS copyright laws to be considered “original”. How much a song or melody gets tweeked to be considered “original” should also be extended to say DJ’s who do a remix. Let’s not be hypocritical you pos lawyers!

    • Randy

      You obviously have no idea what copyright infringement is. You don’t copyright the order of chords. You copyright the chord progression+rhythm (that includes the length of each chord or note, which can obviously vary to infinite degrees). Also a melody.

      There is such a huge difference between the simple “order of chords” and the hooks, the grooves, the melodies, the essence of the song. Showing an example of how VASTLY different one song that uses the C-F-G progression can be from another that uses the C-F-G progression couldn’t get your head out of the shallow thought process you employed. If you don’t understand enough about music to get that, refrain from blurting out in anger until you do. You don’t even show an understanding of what a song is. How could you not understand the difference between an original composition and a remix?? Jesus. Think harder next time. It’s this kind of brain dead thinking that gets us no where in these discussions.

    • Versus

      By your logic, anybody can write a great song. It’s a matter of using those same chords; no other talent or skill required.
      We all eagerly await hearing the masterpieces resulting from this method.

  12. publisher

    Once again, Paul, you have not done any homework. The company I have handling my YT searches is now handling my Soundcloud and can reports lists of uses to me. But its not Jeff Price so your probably not interested in reporting it.

  13. Versus

    As with any hosting service, SoundCloud should enforce a ban on infringing material, with penalties to users and downloaders, and pay-outs to infringees. If tech companies cannot operate with respect for the law, then they should cease and desist their entire services.

  14. adrech

    Soundcloud copyright infringement should apply to people uploading exact copies of other artist’s material, remixes should continue to be allowed. However I sometimes wonder how much more creative the world of musicians would be forced to become if all remixes/mash ups were taken down leaving only original material to flourish. Though I will admit, mashups/remixes offer a sort of free promotion for the original songs they include. Also mashups/remixes have never and will never act as a substitute for the originals in which they include. Soundcloud should do what YouTube did and include links to the originals that are identified to be a part of a remix/mashup. And lastly, the artist in me can’t help but observe that people who start their journey as “musician” with mashups/remixes tend to be people who started out as DJs before they began to actually write music. These people somehow always end up with a significant disadvantage as compared to the musicians who produced and actually used midi to write songs from day one. I can within about 5 seconds of hearing a producer’s original track whether or not they were a producer or a DJ first 🙂