It seems like Soundcloud is under fire AGAIN, only this time they are the ones in the crosshairs. After a recent string of licensing issues that saw the removal of thousands of tracks, PRS has decided to take action against the streaming service. But the endgame of this case will actually result in more songs being removed.
Yep, you read that correctly: MORE songs will be removed. PRS is suing Soundcloud after 5 years of “failed negotiations,” and for a good reason. Officials at PRS have been trying to secure royalties for their artists on their songs that get streamed on Soundcloud’s massive servers. Soundcloud feels that this is not a necessary expense on their end, and have refused to accept PRS’s terms. As you can imagine, PRS did not take this well. They issued a statement to their members, which can be read in full below:
Dear Member, 
PRS for Music begins legal action against SoundCloud
After careful consideration, and following five years of unsuccessful negotiations, we now find ourselves in a situation where we have no alternative but to commence legal proceedings against the online music service SoundCloud.
When a writer or publisher becomes a member of the Performing Right Society, they assign certain rights to their works over for us to administer, so it’s our job to ensure we collect and distribute royalties due to them. SoundCloud actively promotes and shares music. Launched in 2008, the service now has more than 175m unique listeners per month.
Unfortunately, the organisation continues to deny it needs a PRS for Music licence for its existing service available in the UK and Europe, meaning it is not remunerating our members when their music is streamed by the SoundCloud platform.
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 licence is required when services make available music to users.
We have asked SoundCloud numerous times to recognise their responsibilities to take a licence 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.
We understand SoundCloud has taken down some of our members’ works from their service.
With our letter of claim, we sent SoundCloud a list of 4,500 musical works which are being made available on the service, as a sample of our repertoire being used, so that they understood the scale of our members’ repertoire and its use on the service. We asked them to take a licence to cover the use of all our members’ repertoire or otherwise stop infringing.
SoundCloud decided to respond to our claim by informing us that it had removed 250 posts. Unfortunately, we have no visibility or clarity on SoundCloud’s approach to removing works, so it is not currently clear why these particular posts have been selected by them given the wider issue of infringement that is occurring.
Ultimately, it is SoundCloud’s decision as to whether it starts paying for the ongoing use of our members’ music or stops using these works entirely.
If the streaming market is to reach its true potential and offer a fair return for our members, organisations such as SoundCloud must pay for their use of our members’ music.
We launched our Streamfair campaign in June to raise awareness of this issue and highlight how music creators need to be properly remunerated from streaming. We believe that all digital services should obtain a licence which grants them permission to use our members’ music and repertoire, in this case the works of songwriters, publishers and composers.
The streaming market cannot fairly develop unless this happens. We have always been pro-licensing and pro-actively work with organisations in order to propose an appropriate licensing solution for the use of our members’ works.
We remain hopeful that this matter can be resolved without the need for extended litigation. Members will appreciate that this is now a legal matter and our ability to communicate around it is therefore limited by the legal process. However, we will try to share information and updates whenever we can.
However, looking at it from a different perspective, how will this apply to artists who upload their own songs to Soundcloud voluntarily and sign their music to PRS? Hopefully there will be some sort of ‘get out’ clause in the final agreement, but for now, it seems like PRS is throwing the baby out with the bathwater as many artists use Soundcloud for the bulk of their promotional activity.
