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SoundCloud’s New Monetization Option Doesn’t Look Good For Independent Musicians [UPDATE]

In the wake of the recent announcement that Spotify would start allowing independent artists to upload their music to the platform directly, rather than through a third-party service, SoundCloud began publicizing a similar monetization program designed to help independent artists get paid. The program, known as SoundCloud Premier, was initially unveiled in 2014, but was limited to an invite-only beta until earlier this month when it was rolled out to all users meeting the monetization criteria.

While self-monetization options like these can seem like a welcome alternative to the numerous predatory deals already plaguing the record industry, SoundCloud Premier doesn’t look all that much better for independent artists. According to a new report from The Verge, SoundCloud Premier “pushes artists into restrictive terms, with ambiguous payment dates and payout percentages that can change at any time.” The program also forces artists to sign away their right to sue the company, leaving them with no real option for contesting the deal.

In response, a spokesperson for SoundCloud later added that SoundCloud Premier “operates on a fixed net revenue share of 55% and monthly royalty payments paid net 45 days to creators” and that “the creator always retains all their content rights, and reserves the right to exit the agreement at any time.”

As The Verge also points out, this response is inconsistent with the language of the SoundCloud Premier contract, which states that the company “may, at any time and without liability, modify or discontinue all or part of the SoundCloud Premier monetization program,” and ultimately “change, modify or wave any fees in connection with the program; or offer opportunities to some or all program participants.”

Though the contract does state that the company will pay creators “within 45 days after the end of each accounting period during the term,” SoundCloud won’t pay artists until they accumulate at least $100 in revenue, as The Verge also notes. “SoundCloud will calculate Your Net Revenues on a monthly, quarterly, or another accounting period basis SoundCloud elects to use,” the contract continues.

It’s clear that striking direct-deals with artists is a huge opportunity for digital platforms. But as more and more similar options arise from services across the web, the burden increasingly falls on the artist themselves to be aware of potentially predatory deals from the start, especially as record contracts are increasingly woven into the terms of service of digital platforms. Read The Verge’s full report here and check out SoundCloud Premier’s Terms and Conditions below.

Update (10/29): SoundCloud has rewritten the contract for its SoundCloud Premier service, which changes a number of key details pointed out in The Verge’s original report. In a new blog post titled “Clarifying the SoundCould Premier Agreement,” the company notes that they’ve “seen feedback that some language in the original program was too broad, and we want to avoid any doubt around your rights and how we run the program.”

In particular, the new version of the agreement removes language regarding a creator’s covenant not to sue. “Our team reviewed the agreement and we’ve clarified or removed elements that may be unclear or not relevant to the open service we have now—this includes the removal of the outdated covenant not to sue language that was part of our previous invite-only agreement.” An updated version of the contract also obtained by The Verge reflects this change.

The current version of the contract also removes all mention of mandatory arbitration, as well as previous stipulations stating that an artist must reach $100 in accrued revenue in order to be paid out. This payment stipulation has now been replaced with a commitment to a regular accounting period, one which “[calculates] Your Revenues on a calendar month accounting period basis.”

Artist will be notified of these changes within two weeks via the email address associated with their account. Read the company’s full update here and check out their revised Terms and Conditions, via The Verge, below.

Revised SoundCloud Premier … by on Scribd

Tags: soundcloud