"It's similar to the way it works with YouTube: you send in a request, and the content could come down immediately, or be reposted, if there's a question as to the legitimacy of the takedown request," our source said last July. That ran counter to an email from SoundCloud sent to one of its users who had complained that their account had been frozen. SoundCloud wrote at the time that "Universal had removed the content directly," which struck many as odd and left users of the service confused. It seemed as though Universal had access to remove songs as they wished. They didn't. A source familiar with the situation tells Billboard today (June 3) that the case is the same as it was last summer: Universal (and Sony Music, since that major also has not signed up for the On SoundCloud program) is required to submit a takedown request to a SoundCloud administrator, who then processes it and removes that song.
Only those who have signed contracts with SoundCloud are given access to Deck, according to a source with intimate knowledge of SoundCloud's internal policies.
SoundCloud must tread carefully in areas of copyright -- the company relies upon the protections of the Safe Harbor provision of the Digital Millennium Copyright Act, which protects services like it from liability for the (possibly illegal) uploads of its users, as long as rights holders are given clear recourse for the removal of content they own but don't want posted. This may explain the inaccurate wording on the part of SoundCloud in that confusing email last year, since it can't accede to having any foreknowledge of uninvited music. That, even though the company offers rights holders a takedown system almost exactly like that of YouTube, which has to deal with a similar problem on a much larger scale, and doesn't get sued (that much, though many may want to).
Remember also, the company is looking to launch a subscription service this year, and no doubt wants (and needs) Sony Music and Universal Music Group to be a part of that service. Those are relationships that need to be protected, as does its own reputation as these negotiations are carried through. "There's a lot of players making big bets at the moment and lot of opinions on where things should land. I think that's on the industry level. I think we're also at a point where there's more creativity than before and a desire to accept that creativity especially around derivative content," CEO Alexander Ljung said last week. Ljung is referencing a pain point for the company in the current moment, as it garners criticism from its large userbase of DJs, who often upload mixes containing the works of others. "Copyright is about safeguarding creativity and creating a protection from artists and for people to be creative. It's not a strict set of rules of you can do this or you can't do that. In general it's a principle that says, how do we foster creativity?"
The criticism directed at the company by its users, however, is clear; SoundCloud wants its underground and mainstream cake layered equally. Essentially, the company wants to offer a fully licensed place for DJs' myriad mixes and samples. Before that can come true, however, it needs to keep its oven mitts on.