Cooperate music heavyweights, Universal Music Group and online streaming giant, SoundCloud are only ‘days away’ from finalizing a huge negotiation that not only grants UMG a substantial percentage stake in the streaming service, but will also offer a large upfront payment to Soundcloud in exchange for ensuring that all of Universal’s artists’s collect their due digital royalties. Allegedly, Universal could have sued Soundcloud for copyright issues, but they chose to partner with the streaming service instead, and thus, gaining more control while simultaneously continuing Soundcloud’s lifespan. However, imbedded within the agreement is an 18 months window implemented by UMG that demands that the streaming service enacts a system that instantly recognizes and identifies songs in order to appropriately pay the rights holders. As a favorable consequence of solidifying this deal, both parties will earn profit and Soundcloud will continue to survive financially (seeing as many of Soundcloud’s investors became wary of continuing to support them after Sony Music pulled some of its biggest artists from the site).

Soundcloud has faced similar obstacles Sony, as well as Warner Music Group, as they have both sought to retrieve untapped royalties from copy written material found within mixes, mashups and remixes uploaded to the site. Being a company now worth more than $123 million in capital investment, Soundcloud has been given a lot of attention from these major music labels lately, as it has felt intense pressure from all three of them to meet their licensing terms as quickly as possible in order to avoid missing out on royalties. As a consequence of Soundcloud’s free streaming feature, Sony has pulled and is continuing to remove an enormous amount of content from the streaming service until a deal has been reached. Similarly, WMG, who has a stake of up to 5 percent in the music site, as well as a publishing pact with Warner/Chappell Music Publishing has their eye focused on removing ‘derivative works’ from Soundcloud, which refers to samples and snippets of copyrighted songs that are found in copious amounts of mixes, bootlegs, mashups and remixes.

What seems to be going over these labels’ heads is the crux of what matters the most in all this (and, no, it’s not money). It’s the consequences felt by music lovers on both ends of this mess; those who listen to and follow their favorite artists and those who produce, upload and promote themselves through the convenient, gigantic and easily accessible online music platform. And both parties are equally frustrated by the potential of completely wiping out priceless content from Soundcloud. Skrillex explained in a recent interview that uploading music to Soundcloud is a huge asset to the overall business of how people listen to his music. He described that

“recently all the major labels” “made it so all the full songs on SoundCloud are being taken down and limited to clips, and shorter previews.” “And there’s kids that only go on SoundCloud and will never buy at iTunes and even never go to Spotify, and that’s how they listen to music. And what that does is it eliminates a huge asset and is cutting off our music to an audience that could potentially come to our shows and be fans.”

He concluded “So there’s definitely a lot of controversy in all these things, but I almost wish that it was up to the person that owns the art, the way they want it to be heard.” Need we say more?

Sources: Tech Times, Business Insider