Aug 22, 2017 • Are Record Labels to Blame for SoundCloud's Financial Troubles?
From Crunchbase Daily:
SoundCloud erred chasing big labels
SoundCloud’s recent financial troubles can be blamed to a large degree on its decision a couple years ago to offer more music from major labels, according to a Crunchbase News analysis. Previously, the music streaming service primarily subsisted on independent music and user-generated content, currently fast-growing segments.
It appears the deal between SoundCloud and major labels like Universal Music Group (UMG) and Sony Music Entertainment isn't working out so well. UMG and Sony both arguably got the better end of the deal in their purchase of relevance and sales from the music platform in 2016. But has SoundCloud turned its back on the indie music scene in this deal with record label giants? The deal they struck just last year not only gives UMG and Sony the ability to put their signed artists behind a "pay wall" (making it so that only paying subscribers can listen to certain artists on SoundCloud), but it also gives UMG the ability to remove content from any artist who may be a creative threat to an already established artist. Further, UMG can actually ban anyone on SoundCloud, for any reason, or for no reason, regardless of privacy or copyright concern, and regardless of whether or not the user violated any terms. In essence, SoundCloud gave UMG the sole ability to stifle or prevent entirely the visibility of indie artists on SoundCloud, while at the same time increasing visibility to already mainstream artists. Here are the details of the deal that SoundCloud is now regretting:
In January and March 2016, SoundCloud reached respective deals with Universal Music Group and Sony Music Entertainment. A UMG spokesperson told The New York Times that the deal would give the company an option to require certain content to be restricted to paid subscribers.
Universal Music Group has the right to take down any files on SoundCloud. Uploads can be taken down directly by Universal Music Group outside of SoundCloud's anti-piracy policy. Other than uploads, the company has the ability to take down accounts, both premium and free.
Ouch. If that's not a slap in the face of indie musicians and podcasters everywhere trying to get their word out, I don't know what is. Why would SoundCloud agree to this?
When I created Peach Player, I knew it wasn't going to be just another music feed – it had to extend protections and offer incentive to the independent artists, and it had to help them gain visibility, and help them make money off their content. I knew that it had to be free for listeners too, forever, and I knew that there should never be any ads, because ads ruin music.
Because Peach is a platform for musicians and podcasters, we want our service to reflect our commitment to the artist. There will never be advertising on Peach Player, we will never use algorithms to limit the visibility of lesser-known or controversial artists, we will never compress your audio files below 320kbps, we offer a flexible, pay-as-you-go pricing model, and we will never let anyone censor or flag your content because they don't like your message, whether it's a big record label trying to take you down, or anyone else. Your freedom of speech, your spoken word, your music – your message – is an art worth celebrating. This is what we mean when we say Internet broadcasting for everyone.
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