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Soundcloud to Get Hit by Massive Piracy Lawsuits?

soundcloudThere’s a story going around this week that the music hosting service Soundcloud is about to be the target of multiple copyright infringement lawsuits.

DMN and MusicSnake are independently reporting that:

The rumors are true, and indie music producers are bracing for the worst. Several executives representing all the major industry giants, like Sony Music Entertainment, Universal Music Group, and the Recording Industry Association of America (RIAA), have disclosed that they will soon be filing lawsuits against SoundCloud for “massive copyright infringement.”

This move comes just before SoundCloud’s plan to switch from a free user platform to a subscription-based one. SoundCloud’s CEO, Alexander Ljung has earned a reputation for being a Robin Hood of sorts in the music industry, primarily because of his insistence on maintaining a free tier for his users. The site also pays advertising revenue to its contributors.

As with any unverified rumor, we should take this with a grain of salt. And in this case, that grain should be about the size of Death Valley.

When this story first crossed my desk I was surprised and confused. So far as I know Soundcloud complies with the DMCA, making them effectively immune to direct lawsuits.

What’s more, Soundcloud doesn’t just comply with US copyright law; it bends over backwards to work with record labels. Soundcloud has a ContentID-like bot which searches for infringement, and last year Universal was given the ability to delete any content it thought infringed on its IP (that did not end well).

But even though Soundcloud goes above and beyond, they’re still going to be sued?

Something doesn’t add up here. If and when those lawsuits are filed, I’d suggest that we not take them at face value and instead look for what is really going on.

Is the lawsuit intended to crush a service that the labels don’t like, or is this just an example of labels bullying Soundcloud as a contract negotiating tactic?

The labels might even have valid grounds for this lawsuit, but in any case there’s a lot more to this story than meets the eye.

Any ideas?

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