“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,” begins a letter that has been sent to all PRS members, signed by PRS executive director, membership and international Karen Buse.
Buse goes on to say that the “difficult decision” to begin litigation has been taken because SoundCloud “continues to deny it needs a PRS for Music licence” for its streaming service in the United Kingdom and Europe, therefore rejecting the payment of members’ royalties.
“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,” continues the letter, which has been circulated on social media, but not officially sent to the press. When contacted by Billboard, a spokesperson for PRS would only confirm that the organisation has “commenced legal proceedings against SoundCloud,” but refused to comment further.
SoundCloud has responded, writing: “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.
“SoundCloud is a platform by creators, for creators. No one in the world is doing more to enable creators to build and connect with their audience while protecting the rights of creators, including PRS members. We are 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, including record labels, publishers and independent artists.”
Buse’s leaked letter states that alongside its legal claim, the London-based organization sent a sample list of 4,500 of its members’ works which are currently available on the streaming service without license. In response SoundCloud removed 250 posts, but provided no clarity on its approach or methodology to removing copyright protected works and seemingly ignored the “wider infringement that is occurring.”
She concludes by saying that “we remain hopeful that this matter can be resolved without the need for extended litigation.”
PRS’ legal action follows on the heels of Sony Music removing its music fro the platform following a breakdown in licensing negotiations. Tracks by Adele, Hozier, Miguel, Kelly Clarkson and MS MR were among those taken down by the music major in May, with the “lack of monetization opportunities” cited by one anonymous executive as a contributing reason.
So far, Warner Music is the only major to sign a formal licensing deal with SoundCloud, although an agreement was reached in June with independent label organization Merlin (representing over 20,000 independent labels) for it to join the platform’s On SoundCloud monetization program. The Berlin-based company, which was formed in 2007 and has more than 175 million unique listeners per month, has also inked a rights agreement with the National Music Publishers’ Association. Talks between SoundCloud and Universal Music and Sony Music are said to be ongoing.
Since launching its On SoundCloud monetization strategy in August 2014, the company claims to have paid out more than $2 million in advertising revenue to more than 100 partners.
Updated, 12:44PM ET, Aug. 28 with a statement from SoundCloud.