Friday, September 4, 2015

SoundCloud Sued for Copyright Infringement by PRS for Music

Written by Ben Sisario — SoundCloud, a popular music-streaming website that has previously clashed with the music industry, has been sued in connection with copyright infringement by a British agency that represents songwriters.

The agency, PRS for Music, said on Thursday that it had begun legal proceedings against SoundCloud in Britain, claiming the streaming service was infringing on PRS members’ copyrights by not obtaining licenses or paying royalties. PRS, which represents more than 100,000 songwriters and publishers, did not specify what it was seeking in its suit and said its court papers were not yet public.

“If the streaming market is to reach its true potential and offer a fair return for our members, organizations such as SoundCloud must pay for their use of our members’ music,” Karen Buse, executive director of membership and international for PRS, wrote in a letter to the group’s members, who include Paul McCartney and Adele.

SoundCloud declined to comment on the details of the suit, but said in a statement, “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.”

SoundCloud, which is based in Berlin, has been embraced by musicians and fans for its sleek design, but has also run into problems with record labels and others about rights issues. The site lets anyone upload tracks that can be linked to easily through social media, and with 175 million users each month, it has gained a reputation as an influential outlet for new music.

SoundCloud began as a free service, operating without the copyright licenses on which most other digital music services rely and paying no royalties. Last year, the site began introducing a new model that included advertising that would generate royalties from music, but labels have been slow to adopt it.

Warner Music and Merlin, an agency that represents small record companies, have signed licensing deals with SoundCloud, but Universal and Sony, the two largest labels, have not. Sony has removed songs by many of its artists — sometimes to those artists’ annoyance — and lately, many artists and labels have complained of content’s being removed over copyright claims.

SoundCloud, which is privately owned, has been valued by its investors at $700 million. Yet its income has been minimal. In 2013, the most recent year for which its finances had been made publicly available, it had $14 million in revenue and $29 million in losses. Those figures predate its introduction of advertising. In May, the company said it had distributed only $2 million in royalties.

In its statement, PRS said that it had been in talks with SoundCloud for five years, but that the service had maintained that it was protected by the “safe harbor” provisions that apply to Internet service providers that host content from third parties.

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