The Performing Rights Society for Music (PRS) has announced that it will be pursuing popular music streaming site SoundCloud through the courts, to obtain unpaid royalties. SoundCloud claim that the legal notice is:
"entirely devoid of merit and foundation, and it is our intention to vigorously defend and contest the claim"
The issue at hand is that it is possible for copyrighted material to be unlawfully hosted on the website. Without SoundCloud holding a PRS licence, it is claimed that members are being deprived of royalties for the use of their work. SoundCloud deny that they require a PRS licence for their site.
This comes as a deal between several major record labels and SoundCloud nears, as reported by Bloomberg magazine. This deal would see record labels obtaining a stake in SoundCloud Ltd. in return for an agreement not to sue for copyright violations. The list of record labels includes Universal Music Group, Sony Music Entertainment and Warner Music Group.
In a statement:
"It is regrettable that PRS appears to be following this course of action in the midst of an active commercial negotiation with SoundCloud.
"We believe this approach does not serve the best interests of any of the parties involved, in particular the members of the PRS, many of whom are active users of our platform and who rely on it to share their work and communicate with their fan base.
"SoundCloud is a platform by creators, for creators. 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."
Personally, I believe the issue is not as simple as either side posits. The Independent article below makes a good point - the way in which content creators operate seems to be at odds with how copyright law actually functions. Using a real-world analogy, many artists play covers of popular songs created by other artists at gigs, in order to build and maintain a fanbase. Once that fanbase is established, original material can more easily be distributed and digested, and the odds of scoring a record deal/achieving commercial success become higher.
In my opinion, this is an age-old phenomenon that has simply been transferred to the digital online world. There has always been a disjoint between business and art, and cases like this serve to demonstrate that difference in a most practical manner.
PRS for Music, which represents the rights of over 111,000 musicians in the UK and distributes royalties owed to them for their music, has decided to sue SoundCloud after negotiations stagnated. “After careful consideration, and following five years of unsuccessful negotiations, we now find ourselves in a situation where we have no alternative but to commence legal proceedings against the online music service SoundCloud,” it said in a letter to members. The organisation said it had made the “difficult decision” to begin litigation because SoundCloud “continues to deny it needs a PRS for Music licence” despite being asked “numerous times to recognise their responsibilities”.