Winter is coming… wait, no… Summer is coming and the Game of Tones continues with the war between SoundCloud and the three great (major) labels. Sony has taken the most recent swing at negotiations by pulling their catalog from the free streaming site with so-called inside sources blaming the breakdown on a “lack of monetization opportunities.” This could be a major impasse for SoundCloud which, despite several very successful rounds of funding, will eventually need to secure the ability to host bigger artists’ material or face the potentially crippling copyright dilemmas not unlike those YouTube faced in its earlier days. Though SoundCloud has begun rolling out ad-powered monetization plans, this now confirms that 2 out of the 3 major labels are unhappy with SoundCloud’s terms in comparison to their current deals with Spotify.
Record labels are being forced to come to terms with the fact that people don’t value the ability to listen to music the way they used to; now most people expect to have that for free. Artists are coming to terms with this by selling out– remember when that was a bad thing? After a few decades of abuse at the hands of the record labels, licensing has become the revenue stream for music makers of all varieties. Unfortunately, this creates a toxic environment for SoundCloud which relies on users to own the rights to the content they upload… When record labels smell blood (aka money) in the water, they won’t won’t hesitate to shift daily operations from “promote music” to “sue the living **** out of SoundCloud.” These people have lawyers on retention and are desperate to find any new revenue stream they can… patent trolling has been wildly successful in the tech industry, why not sue over intellectual property in the music industry? (Case and point, Gaye vs. Thicke)
This makes SoundCloud’s partnership with Zefr even more critical moving forward as the two sides prepare for war. Regardless of how you feel about SoundCloud, the outcome of this war will likely have a huge impact on how we consume music.
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