Sony Music has removed original recordings from the SoundCloud pages of more than a half-dozen artists — including Adele, Hozier, Miguel, Kelly Clarkson, Passion Pit, Leon Bridges and MS MR — as part of a breakdown in negotiations between the major music group and the Berlin-headquartered streaming-audio platform. Spokespeople for Sony Music and Columbia Records, the label with the most impacted artists, declined comment, but an executive familiar with negotiations says the recent takedowns are due to “a lack of monetization opportunities” on the platform.
The Sony impasse comes at a transitional time for SoundCloud, which until recently was a completely free service to more than 350 million monthly users. Though its content was unlicensed, the platform has played an influential role in helping developing artists like Lorde and, ironically, Bridges get discovered and ultimately signed by major labels – as well as a destination for established acts like Beyonce, Miguel and Drake to debut new material. “[It’s] been a good place for exposure,” says one notable artist manager. “At the same time, artists and labels need to get paid for music. Until that can be worked out, we’re going to have situations that are incompatible with artist development.”
The company debuted its first monetization strategy last August, the ad-supported tier On SoundCloud, and in November announced Warner Music Group as the first of the three majors to ink a formal licensing agreement with the service. A spokesperson for Universal Music Group, the third major, declined comment on the status of its talks with SoundCloud.
A SoundCloud spokesperson tells Billboard in a statement, “We are in ongoing conversations with major and independent labels and will continue to add partners to the program,” noting that the company has already paid out more than $2 million in advertising revenue to more than 100 partners since On SoundCloud’s establishment in late 2014. “We’ve always put control in the hands of creators, and anyone who makes music and audio can decide when and how they want to share it with fans, allowing artists to essentially broadcast out to the world the availability of new content.”
One organization SoundCloud has made nice with, however, is the National Music Pubslihers’ Association, which on Wednesday (May 6) announced the completion of a rights agreement with SoundCloud with a focus on the NMPA’s independent publishers. The improved negotiations follow NMPA CEO David Israelite’s comments to Billboard last October, in which he compared SoundCloud’s un-licensed content to the organization’s 2007 lawsuit against YouTube over similar un-monetized consumption. “We may still look to sue them, but we’re in a conversation and looking for a win-win situation,” Israelite said at the time.
But in announcing the new deal, Israelite added in a May 6 statement, “This agreement ensures that when SoundCloud succeeds financially, so do the songwriters whose content draws so many users to their site. I am thrilled that we could agree on terms that will benefit both creators and the SoundCloud platform that has brought online music access and creativity to a new level.”
SoundCloud, which previously made money entirely through subscriptions to artists and labels, announced a $29 million loss on $14 million revenues in 2013.