Major labels unhappy with SoundCloud’s terms, negotiations halt

Back in July we reported on rumors that SoundCloud had begun active negotiations with three major labels for equity in the Berlin-based company. Since then we have seen numerous high profile bans on the platform, countless takedown notices, and an insurmountable amount of public backlash towards the once revered platform.

Things continue to get even more grim for SoundCloud as it struggles to develop a sustainable business model. According to the Financial Times, previous negotiations with the big three have halted due to the lackluster terms of SoundCloud’s proposal to license their music. According to people close to the talks, Universal is no longer actively negotiating with SoundCloud.

After receiving a $700 million dollar valuation early this year, SoundCloud began to roll out advertising in an attempt to generate positive revenue for their investors – the sticking point however is that without major label backing, monetizing plays on content they do not hold the rights to remains highly illegal.

Even independent artists are beginning to abandon the service after takedowns and ban notices have permeated even the most popular channels.

Could this be SoundCloud’s death knell? If they fail to garner major label support it very may well be.

Via: Financial Times

Categories: News