Sony, UMG, RIAA suing SoundCloud for copyright infringement?
Universal Music Group, Sony Music Entertainment, and the Recording Industry Association of America (RIAA) are allegedly readying a major lawsuit against SoundCloud for copyright infringement.
According to Digital Music News, “multipleexecutives close to the situation” have said the suits are related to the audio streaming platform’s forthcoming subscription streaming service, which, much to the aforementioned companies’ apparent distate, will include a free tier.
“I’m not saying this is another ‘legal jihad,’ butlawsuits will be filed,” one source told DMN.
Notably omitted from the alleged companies prepping lawsuits is Warner Music Group; the smallest of the majors has inked a licensing deal with SoundCloud in November, centered around its ad-supported, creator partner program, 'On SoundCloud' as well as the premium subscription launch.
The deal, deemed a ‘one-off’, gave WMG a reported 5% equity in SoundCloud. It’s now unclear how WMG have responded to the fact SoundCloud will include a free tier in addition to its premium subscription service.
Interestingly, many reports suggest Sony wanted an equity stake in the company and following unfavourable licensing negotiations pulled many of its major artists’ catalogues from the site.
It’s not the first time the major labels have taken issue with streaming’s ad-funded ‘freemium’ model either, execs from all three labels have previously spoken out against the Spotify-created model.
Sony Music chairman and CEODoug Morris has been quoted saying: “Basically, I equate ‘free’ with the decline of the music business. Why should anyone pay for anything if they can get it for free?”
A question remains about where the independent sector stands;earlier this month an unsigned contract between SoundCloud and US trade association for the publishing industry,the National Music Publishers’ Association (NMPA), leaked. The 19-page contract wasn’t signed but revealed SoundCloud would pay 10.5% of its revenue including from ads or approximately 22% of its sound recording rights revenue, whichever is greater, to the publishers.
Following the leak, SoundCloud announced its partnership with global rights agency Merlin, offering its more than 20,000 labels and distributors worldwide royalty payments for streams and access to a range of reporting and content management tools.
While SoundCloud can't begin the rollout of its subscription service without reaching licensing agreements with all labels, another move toward its launch was its decision this weekto change the way it processes and accommodates play requests in their API. Starting July 1, third-party apps like CD Baby, tumblr and BandPage are going to be limited to 15,000 play requests every 24 hours.
When it does launch, SoundCloud’s subscription service will have a greater reach than Spotify off the bat, it has 175 million users, outstripping Spotify's 75 million,of which 20 million are signed up to the paid tier.