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SoundCloud settles with PRS for Music. What next?


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The boundaries of European safe-harbour legislation won’t be tested in court just yet, after SoundCloud reached a settlement with collecting society PRS for Music that ends the latter’s copyright-infringement lawsuit.

The deal followed five years of licensing negotiations that ended in acrimony this August when PRS for Music filed its lawsuit.

Key points? “The licence covers the use of PRS for Music repertoire since SoundCloud’s launch” – previously a key sticking point in the negotiations, with PRS having argued that SoundCloud’s existing free service required a licence, and SoundCloud maintaining that as a user-generated platform it qualified for safe harbour protection.

The deal is a step towards SoundCloud finally launching its premium subscription tier, in Europe at least – although “2016” is as specific as any spokespeople are getting on a likely launch date.

“We’re going to continue to work to put the other deals in place that will need to be able to turn on monetization in as many places as possible,” SoundCloud SVP Stephen Bryant told the Financial Times.

Attention now shifts to SoundCloud’s talks with Universal Music and Sony Music, with its deals with Warner Music and Merlin already in place. But also to SoundCloud’s finances: its latest financial results were due to be filed by 30 September with Companies House in the UK, but are overdue. We’ll be watching to see if they sneak out before the end of this year.

What about safe harbour though? The settlement means no court judgement on whether SoundCloud’s service – and by extension YouTube – qualifies for safe harbour protection or not.

PRS boss Robert Ashcroft claimed the settlement is “a pointer on the road to clarifying the situation for other distributors of music”, so while SoundCloud prepares its premium launch, PRS and other rightsholder bodies will focus their attention on lobbying European politicians for a clarification of safe harbour in 2016.

Arguably fighting this battle on one front rather than two may boost their chances of the outcome they are hoping for – in PRS’ case, in time for its next set of licensing negotiations with YouTube.

Stuart Dredge

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