The Berlin-based music streaming service SoundCloud is being sued by the Performing Rights Society for Music (PRS). They are a group that represents musicians and publishers in the UK. PRS claims that SoundCloud has failed to obtain the proper license to host the music of PRS members. PRS claims that without the license, SoundCloud is not properly compensating PRS artists for their work. After PRS sent SoundCloud a list of 4,500 songs that constitute copyright infringement, SoundCloud removed just 250 of them. SoundCloud claims to have 175 million active monthly users, in addition to 10 million content creators.
The crux of any copyright lawsuit against SoundCloud would be whether hosting copyrighted music is enough to hold them liable. Unlike other music streaming like Pandora and Spotify, SoundCloud’s content is generated by users. They post audio to the web site. SoundCloud is famous for hosting remixes of songs created by DJs or aspiring DJs. They rarely secure the rights to the songs that they use. Although SoundCloud warns users against uploading infringing music, it inevitably occurs. Consequently, SoundCloud, not the uploaders and not the copyright-holding artists, is the one who profits.
According to PRS’s letter of claim, “Our aim is always to license services when they use our members’ music. It has been a difficult decision to begin legal action against SoundCloud but one we firmly believe is in the best, long-term interests of our membership. This is because it is important we establish the principle that a license is required when services make available music to users. We have asked SoundCloud numerous times to recognise [sic] their responsibilities to take a license to stop the infringement of our members’ copyrights but so far our requests have not been met. Therefore we now have no choice but to pursue the issue through the courts.”
This is not the first dispute SoundCloud has been involved in this year. Universal Music Group and Sony Music Entertainment also failed to reach an agreement with SoundCloud, and decided this past June to take legal action against SoundCloud for copyright infringement. The disagreement has to do with SoundCloud’s business model, which is to offer free music supported by ads. The record companies believe that a subscription-type service would be more lucrative for themselves.
SoundCloud has released a statement criticizing PRS’s decision to sue. SoundCloud believes that continued negotiations would have eventually solved any outstanding issues between the two parties. A SoundCloud spokesperson said, “It is regrettable that PRS appears to be following this course of action in the midst of an active commercial negotiation with SoundCloud. We believe this approach does not serve the best interests of any of the parties involved, in particular the members of the PRS, many of whom are active users of our platform and who rely on it to share their work and communicate with their fanbase.”
