PRS for Music Files Legal Paperwork Against SoundCloud

Earlier this month, Digital Music News pointed to major label legal threats against SoundCloud, with filings possible by Thanksgiving.  What we forgot to mention that publishers – and publishing societies – were also threatening, and might beat that date.

Like, right now.  Early this morning, UK-based collection society PRS for Music confirmed that it had filed legal action against SoundCloud for refusal to pay performance royalties.

“After careful consideration, and following five years of unsuccessful negotiations, we now find ourselves in a situation where we have no alternative but to commence legal proceedings,” the organization confirmed.

The exact nature of the complaint remains forthcoming, though it is likely focused on non-payment of publishing performance royalties, with mechanical licenses potentially also included.  Those details are actually spread across a few different organizations in the US, all of whom could potentially strike next.

The action comes on rumors of a momentous agreement between SoundCloud and Universal Music Group, easily the largest label group in the music industry.  But that deal still needs to be signed (and announced), and UMG is only one gorilla in the jungle.

It is now unclear if Universal Music Group will move forward with final signatures and announcements given the PRS development, if only to preserve solidarity.

PRS for Music administers rights across a large number of delivery platforms, both offline and on, including on-demand streaming services like SoundCloud.  Here’s the complete letter to members, emailed this morning.

“When a writer or publisher becomes a member of the Performing Right Society, they assign certain rights to their works over for us to administer, so it’s our job to ensure we collect and distribute royalties due to them. SoundCloud actively promotes and shares music. Launched in 2008, the service now has more than 175m unique listeners per month. Unfortunately, the organisation continues to deny it needs a PRS For Music licence for its existing service available in the UK and Europe, meaning it is not remunerating our members when their music is streamed by the SoundCloud platform.

“Our aim is always to license services when they use our members’ music. It has been a difficult decision to begin legal action against SoundCloud but one we firmly believe is in the best, long-term interests of our membership. This is because it is important we establish the principle that a licence is required when services make available music to users. We have asked SoundCloud numerous times to recognise their responsibilities to take a licence to stop the infringement of our members’ copyrights but so far our requests have not been met. Therefore we now have no choice but to pursue the issue through the courts.

“We understand SoundCloud has taken down some of our members’ works from their service. With our letter of claim, we sent SoundCloud a list of 4,500 musical works which are being made available on the service, as a sample of our repertoire being used, so that they understood the scale of our members’ repertoire and its use on the service. We asked them to take a licence to cover the use of all our members’ repertoire or otherwise stop infringing.

“SoundCloud decided to respond to our claim by informing us that it had removed 250 posts. Unfortunately, we have no visibility or clarity on SoundCloud’s approach to removing works, so it is not currently clear why these particular posts have been selected by them given the wider issue of infringement that is occurring. Ultimately, it is SoundCloud’s decision as to whether it starts paying for the ongoing use of our members’ music or stops using these works entirely.

“If the streaming market is to reach its true potential and offer a fair return for our members, organisations such as SoundCloud must pay for their use of our members’ music.”

Turkey image from the US Department of Agriculture, licensed under Creative Commons Attribution 2.0 (CC by 2.0).  Middle image supplied by Next Big Sound.