Leaked Contract Confirms SoundCloud Is Plotting A Subscription Service
A leaked contract has confirmed that SoundCloud will indeed jump on the subscription bandwagon. The Fader reports that the streaming service, which has been looking for more ways to monetize the site, sent out a contract to independent music publishers that outlined the tentative deal. We’ve speculated a bit about what this new deal would mean for casual SoundCloud users, and now we’ve got a better idea of the legal underpinnings. The contract suggests that SoundCloud would create a tiered system that would make some tracks exclusive to subscribers; the three levels of membership are as follows:
- The Full Catalog Subscription Service: the most expensive level of membership that would give users the most music.
- Additional Services: Less expensive than the full catalog, and would provide users with an ad-free experience.
- Free: Limited catalog, ads.
Labels would then be payed royalties based on the percentage of streaming revenue acquired from members: 18 cents a month for each individual with a “Full Catalog” account, and 80 cents per month for each individual signed up with an “Additional Services” membership. SoundCloud would pay each label or independent publisher $350,000 in advance, and each one would received a “Most Favored Nation” clause, which allows labels to match the highest rate SoundCloud offers their competitors. Some of this contract is vaguely reminiscent of the Spotify/Sony contract that leaked back in May. Check it out below.