SoundCloud agrees legal settlement with PRS in time for Christmas

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SoundCloud and PRS For Music have signed a settlement, bringing to an end their legal battle in time for Christmas – and even agreed a new multi-territory licence.

The licence covers the use of PRS for Music repertoire since SoundCloud’s launch and further supports SoundCloud in its plans to introduce subscription and advertising across Europe in 2016, meaning that creators can start to make money from their tracks.

The news comes four months after UK CMO PRS announced it was suing SoundCloud following years of unsuccessful negotiations over a European license.

Today’s announcement throws up some big questions, including but not limited to:

  • How much has SoundCloud agreed to pay for past usage of music as part of the settlement?
  • How will this money be divided amongst publishers and songwriters? Some have suggested that a market share-based allocation won’t go down well amongst smaller players – especially those in the world of dance music, who have been particularly regular users of SoundCloud;
  • What are the terms of the new multi-territory licence?

Robert Ashcroft, Chief Executive of PRS for Music said: “On behalf of our members, I am pleased that we have been able to reach a settlement with SoundCloud without extended legal proceedings. This ends over five years of discussions on the licensing requirements for the platform, resulting in a licence under which our members are fairly rewarded for the use of their music.

“The safe harbours in current legislation still present ambiguity, and obstruct the efficient licensing of online services, but our agreement with SoundCloud is a step in the right direction towards a more level playing field for the online marketplace.”

He added: “Many of our members love the SoundCloud service and I greatly appreciate their management’s willingness to work with us in the way they have”.

Alexander Ljung, founder and CEO of SoundCloud, said: “SoundCloud is a platform by creators, for creators; we’re working hard to create a platform where all creators can be paid for their work, and already have deals in place with thousands of copyright owners.

“PRS for Music is also fully committed to creators, and we’re pleased to have reached an agreement that will expand revenue opportunities, improve the accuracy of royalty distributions, and launch new services for our 175 million monthly active listeners on SoundCloud in 2016.”Music Business Worldwide

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  • john truelove

    Regarding your second Big Question, having seen the action through to this happy resolution (congratulations to both sides for making it happen), it is now crucial that the pressure remains on all parties to ensure that:
    a) Soundcloud spends some real effort in sorting out its (by all accounts appalling) data, and
    b) that the resulting data is shared and analysed to ensure a fair and transparent distribution, properly based on historical usage, and not anyone’s guess (including mine) at what market share or analogy might be appropriate.

    War may be over, but the, er … battle goes on.

    #GetPlayedGetPaid
    Merry Xmas!

    • first time moaner long time r

      I think this is a bigger result for the “smaller” creators of music, the home grown talent that have always debated their need for their PRS membership and now gives a great avenue for their exposure and earnings!!

  • Its a brilliant result. Those who are glad to download free music by the bucketload work in jobs in which they get paid a fair wage, and they would never work for free. For a musician, it’s more than a job….its a lifelong passion : a career, and its a career which contributes to an entire industry with everyone from roadies and lighting technicians to commercial radio DJs, cleaners and canteen staff all receiving a fair wage because they work as part of an industry called the “music business”, and without musicians doing what they do, they wouldn’t have a job in the music industry.
    No-one would expect to go to a plumber, electrician, bricklayer, joiner, taxi driver, barber, baker, delivery man, etc….etc….and expect their product for free, so why musicians who spend a lot of time crafting melodies, learning about mastering, psycho-accoustics, limiting, compression, music theory, EQ, synthesis, drum programming, and now online marketing, graphic design, promotion, html and websites ??

    Very few people could live in a world without music, yet are reluctant to pay for it.

    Im glad to see the free lunch is over for soundcloud, and now pandora too. Its high time musicians get paid a fair wage just like every other sector of society.