SoundCloud’s Plan For Survival Outlined In Bleak Leaked Document

06.02.15 2 years ago 8 Comments

In the gangster flicks, watching until the end almost guarantees that the bad guy meets their death. In the streaming business, sticking around long enough guarantees that the constant C&D letters force you to try and go legal. A leaked contract for indie publishers outlines the reported future of SoundCloud as a tiered system without the answers to the record industry’s problems.

Thankfully for SoundCloud, their cash reserves have been beefed up with private investments that helped WSJ peg their worth at a staggering $1.2 billion. Then again they also came with the onus of figuring out how to monetize their platform.

We saw the implications of this already when DJs’ mixes got taken down for having copyrighted songs. The platform that grew to staggering numbers on their strength of those remixes bowed to the hand of venture capitalists instead of the DJs at the pulpit. The message was clear – change gon’ come.

The new system is exactly the same as the competitors who already dominate the streaming world. The first tier starts at no cost, gains support by banners and advertisements and limits the amount of music users can consume. The second tier, called “Additional Services,” charges an unknown amount for more, yet not quite unlimited, spins.

Their fishscale offering’s currently known as the SoundCloud Full Catalog Subscription Service. There’s no word yet on whether the once-innovative brand has any plans to offer anything new to the streaming game. Yet, given their rich past in helping artists reach audiences globally on a new platform, we’ve got our fingers crossed.

If and when innovation occurs, the platform has made sure to present some ripe terms for early partners. The “Most Favored Nation” clause is essentially golf’s “Best Ball” of entertainment where the supplier gets upgraded to whatever the current best-rate is. If this doesn’t sound like SoundCloud’s in a position of power for these negotiations, it’s because they no longer are.

That said, the leaked contract is not signed, sealed or delivered. It did indicate, however, what many suspected would occur this year. Moreover, with its aim at indie publishers, the document made lots of sense given the last few months. Sony pulled out of negotiations recently with the platform, and as noted when the Beyhive rumor spread about Tidal losing all of Sony’s songs, it would be a difficult blow to recover from.

SoundCloud works with so many artists who have come to love the platform. Although, their evolution may just be a sign of the slippery slope we saw with MySpace and Megaupload’s legal transgressions. Facebook is dealing with said growing pains, and one day, the Snapchats and Periscopes of the game should follow suit. As technologies mature, they hit a critical mass that exempt them from their carefree, hack-a-thon beginnings and bring them smack dab into boardrooms from N.Y. to L.A.

Don’t be worried for the sake of future musicians, as this serpent only grows more heads as the original ones get chopped off. That process takes years, and in the interim, usually allows for some funny memes and retrospective pieces. Besides, remember what they call an inventor with only one good idea? That’s right – a thief.

Check out the leaked contract below.

SoundClound Licensing Contract With National Music Publishers’ Association

(Via Fader)

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