SoundCloud's relationship with major labels has been rocky, despite efforts to monetize its streaming of major label owned content. While the music sharing site introduced ads on some content last August as a way to raise money to pay major label licenses for hosting this music, SoundCloud has yet to reach iTunes or Spotify levels of cooperation with major labels. This is due to the openness of the system. Anyone can upload to Soundcloud, which make it more akin to YouTube than a streaming service like Spotify. SoundCloud's friction with major labels increased recently as Sony began taking down tracks from artists like Adele, Passion Pit, Miguel, and Hozier, citing “a lack of monetization opportunities,” according to sources close to the negotiations. But with SoundCloud's dominance as the top website for music sharing, as well as a new round of $150 million in fundraising, this is hardly a fatal blow. Expect more negotiations and a new deal to be reached between the two parties soon.
Written by Grant Fox.