SoundCloud may not be your typical music-streaming site, but that doesn’t mean it’s immune to disgruntled rights-holders withdrawing their music from the platform. The rights-holder in this case is Sony Music Entertainment and the disgruntlement reportedly stems from what SoundCloud is (or apparently isn’t) doing on the monetization front.
According to Billboard, Sony has pulled some of its music from the popular music-sharing site. The works withdrawn from the platform belong to Adele, Hozier, Miguel, Kelly Clarkson, Passion Pit, Leon Bridges, and MS MR. Head over to their respective SoundCloud pages and, in most cases, you will be greeted by an eerie silence—a large number of followers but no music. MS MR and Passion Pit’s are the only pages that still have some music.
The music magazine says talks between Sony and SoundCloud over the licensing of the former’s music have broken down. An unnamed executive it talked to blamed the takedowns on “a lack of monetization opportunities” on the site.
The story behind the story: As you may recall, last year the Berlin-based music-sharing platform finally began serving ads after having refrained from doing so for seven long years. At the time, the move was seen as an attempt at mollifying record labels and assuring investors. The company even said that the majority of revenues would go to creators. Although the site says it has paid out over $2 million since then, it is clearly not enough.
This is not the first instance of negotiations breaking down between SoundCloud and the so-called big three—Universal Music, Sony and Warner Music Group. In October, the Financial Times reported licensing talks between the three major labels had come to a screeching halt over terms, with Universal withdrawing altogether. A month later, however, SoundCloud was able to hammer out a licensing agreement with Warner, the smallest of the three.
These takedowns appear to be aimed at bringing SoundCloud to terms, whatever they may be. It is going to be mighty difficult for SoundCloud to resist for very long, what with Sony and Universal together being responsible for over half the music sold around the world.
Despite being valued by artists of all sizes for being a powerful promotional tool with an immense reach (more than 350 million users), SoundCloud continues to operate in the red. A confrontation with the big two is the last thing it needs at this stage.