Soundcloud, Getty Partner For Licensing: Musicians Lose 100% Control, Paid 35-50% Of $’s
SoundCloud has partnered with leading licensing company Getty Images to simplify music licencing. The new SoundCloud feature allows users to make selected tracks
available for sync licensing directly within the SoundCloud player, and commercial users to request a license by
clicking a "license" button on the player. But the opportunity comes at what some will see a high price to artists.
If a Soundcloud artist chooses to participate, flat fees begin at $99 for web site use to $200 for a one time podcast play on up to $1500 for wider corporate usage. If licensors want a track for an ad or film, they must to call Getty for a quote.
Artists Must Relinquish Control
To be eligible for placement, artists must give up 100% control of how their music is used. "Your agreement with Getty Images Music allows us to license your music to any client who is willing to pay money for its use," reads the company's FAQ. "The agreement you sign pre-clears all of your music for potential licensing."
The company's justification for taking full control: "Pre-clearance is a strong selling point for our clients who are more likely to use music that causes them less hassle."
If the music is licensed, the artist receives just 35% of the upfront licensee fee plus
50% of Getty Images' share, as publisher, of any backend performance
royalties. Fair or not, 50% fees to companies that place songs and generate licenses are common in the music industry. But usually those companies (often publishers and song placement experts) actively solicit the usage. Getty's placements from SoundCloud's artists are at their core passive, with the potential licensor discovering the track on their own and requesting the license.
What do you think? Will you make your music available view the new Soundcloud / Getty Images music licening platform?
While they’re absolutely correct that pre-clearance is vital for their clients, such liberal allowances are much more understandable in an exclusive licensing model where there’s a significant long-term relationship established between the content creator and the licensing agent.
In the typical non-exclusive model (such as Getty, Pump, Jingle Punks), such relationships aren’t a part of the business model on either side of the licensing transaction. These “publishing” houses are more akin to large grab-bags or catch-alls for gobs of music that comes to them with zero cost (think iStockphoto for music), while the corporations keep the lion’s share of the resulting income AND the value of the individual piece of music is diminished since such companies are now simply competing on price… if users can get the same piece of music across the street (or the virtual/internet equivalent) then how can content creators expect such companies to hold their ground for the maximum value of the music? It is in the non-exclusive’s best interest to acquire as many tracks as possible (again: for free), and license as many as possible (quantity over quality)… not to develop and curate a catalog that has long-term meaning/usefulness for the licensed music clients and long-term value for the content creators.
Content creators who sign up with these massive non-exclusive companies should also be quite wary of the fine print regarding so-called “blanket licensing” deals, whereby these companies are able to sign up major clients (such as tv networks and syndicated shows) for a single large fee, often upwards of 7 figures, while not sharing that revenue proportionately with the content creators… or, if they do offer a share of such revenue to their music suppliers, it is such a teensy sliver of the whole pie so as to not be worth the associated cost of jumping on the non-exclusive train.
Non-exclusive music libraries are, in my opinion, doing a significant disservice to the production music industry. While they provide an avalanche of choice and Dollar Store pricing, they do so at the expense of the very thing that should matter… supporting great music and the creators of great music. When a company’s priority is solely their own bottom line and increasing their annual profit margins, music is no longer a priority. That’s a long-term problem. Or, I suppose, a long-term opportunity for those of us who still love this industry. 🙂
Tough deal to swallow…very aggressive
And don’t forget that you are giving Getty the rights to re-name (sometimes called “re-titling”) your songs. My advice to artists would be to read-up about this practice a bit before you make your decision.
hahaha.. Soundcloud is getting more ridiculous with every update. Goodbye Cloud!
I kinda agree with Daniel (last post) – hope greed (or other reasons) will not ruin everything good so far
I think . . . not.
The last thing I want in the world is Exxon mobile using my songs but sadly most artists couldn’t care less. This is really a lame deal though.
Soundcloud is perhaps getting a bit too big for its britches. Its a great platform, but not sure how many people are even going opt in for this. Its a better deal to just submit to a library, which by the way will rename your song. That’s standard practice now since no one is dumb enough to give away publishing rights anymore.
@ Katy: what’s being addressed with the “re-title” concept here is not the mere act of a library which will “rename your song.” The problem is when multiple libraries (non-exclusive) have the means and authority to provide PROs multiple names for the exact same piece of audio. This is proving to be a significant problem with new technologies for tracking the use of these songs digitally, through audio fingerprinting and the like… a scan of the broadcast might return a unique sonic fingerprint, but which of the multiple (“non-exclusive,” remember) publishers making a claim for that airing/placement should get paid? It’s a hassle that many (if not all) major broadcasters and production companies don’t want to deal with, and it leads to messy reporting, multiple claims, collection chaos, and potential legal issues.
I’ve seen some pretty bad splits in my time, but 35% royalty rate for the artist is terrible. Unless you are writing jingles specifically to license to ad companies, or ambient music for background film or tv use – then i would avoid this.
SoundCloud is getting desperate for revenue growth because they invited new expectations from the VCs that gave the $50Million (they didn’t need that much in order to grow at a natural rate for what they do, imo). If I were an artist, I would expect even more pressure to pay, higher prices, or more pressure to give up rights like this scheme. It seems inevitable. I could be wrong, but stay tuned for the next few ‘announcements’ from them.
What makes you think this a sign of SoundCloud’s desperation?
At least this is an ‘opt in’ situation and not an automatic in that you have to jump through fire to ‘opt out’ of…
Artists are desperate and will fall for anything.
its a shame that soundcloud dont understand they alienating the audience that provides them with a business, musicians
Don’t relinquish control, and get 35% for your music. What a ripoff. I am building a site where Authors will have the same functionality and more that SoundCloud has to offer its called: http://www.theaudiobox.com. Its in early stages but I have plans for an overhaul on the design, composers will have their own homepages, or portals rather with only a small powered by The Audio Box at the bottom. They can use their own domains or a free subdomain. You will be able to upload an manage all of your authored music. The author gets 75% and we keep 25% which is spent on the servers and marketing. Currently we offer Royalty Free Music which you can start using today. We are working on Auctions and Licensed music options.
It’s just sad how companies rob composers.
I just think SoundCloud, while novel in their business model and technology is nothing on Holding Pattern which at least turns this model on its head…providing artists a non threatening platform to make money. Check it out. I love the fact that it is attempting to champion the undiscovered. I think that is really cool!
I don’t understand the shade being thrown at SoundCloud about this new deal. My main issue (and, I believe, what people should be focusing on) is the downstream hassle posed by non-exclusive licensing companies… and the, um, less-than-lucrative (unfair?) composer deal being offered by Getty.
SoundCloud is merely providing a portal to the Getty system. I’ve got zero issue with this part of the equation, since as a delivery system for music it seems SoundCloud would be right to provide as many options and outlets for their users’ music as possible.
Was with Pump for years, generated a fair bit of income, and had a relationship with a nice lady in their offices in NYC (email relationship,) where I felt like a useful contributor. Got took over by Getty and within around 1 year you had to sign up to a new deal 65/35 split. Told them of course to go fuck themselves; since then I still receive some ok royalty payments from the music they already had, and at 50/50. Needless to say I will not be signing up thru soundcloud. Artists: don’t. Never accept less than 50/50, never give up your rights, and moral rights are important: while i’d be happy for certain of my tracks to be used in hardcore anal or lesbian pornography, i’d draw the line at British Gas or Nike. Will check Holding Pattern, thanks for the heads up.
Keep Away!!!
This is not a favorable deal for artists, bands, musicians or composers. I work as A&R Director for MusicSupervisor.com We don’t get paid until we place a song and our share at that point is 50% of upfront placement fee’s (master use and publishing license otherwise known as the all-in agreement). Furthermore, we keep NO publishing. Getty (Pump Audio) is taking half of publishing and keeping more than 50% of upfront licenses, 65% to be exact. This is horrible for musicians.
I would presume their business plan is quantity of licenses rather than quality. All-in-all not a favorable deal and I am very surprised Sound Cloud has entertained this. For artists, bands, composers and musicians that want to earn money for their placements in a fair artist friendly environment visit musicsupervisor.com and save your rights and money/publishing share.
Also, be aware that with Getty taking half of your publishing, they will be able to sell your music to another company at some point, in which case you could completely loose track of where you music is housed and/or and what company has control of your publishing.
Your better off pitching on your own and/or finding a more favorable deal.
Wow they take 65% of master and 50% of the composition. So lame!
This article is very inspiring and a great reminder that music and music appreciation is more than notes played on instruments, recorded and mass duplicated for consumption. Music is about ideas, feelings and expression and even identity. It can support existing ideas, or spark new ones. It’s about communication and it’s about us as humans on this rock we call earth. Music is a lot of things in a lot of ways and the future of the industry (I loathe calling it an industry) should be just as many things as well.
For every artist that I have had an appreciation for, I wish they had a simple PayPal donate button on a website so I could give money directly. But the old model made this next to impossible. With the rockstar facade keeping fans well away from the person behind the music while the corporate handlers funnel fan support through their plastic disc sales. Buying the disc/tape/record was the only way to show your support and maybe attend concerts or order a t-shirt but the only parties seeing real profits in that model are the record execs. Most artists see very very little of the $10 to $20 per recorded media sale.
The artists that succeed with services like kickstarter, making hundreds of thousands within a few days are essentially getting what a major label will advance loan an artist for recording. It has to be paid back out of each unit sold, coming out of the artist’s royalties which are typically the lowest percentage of all parties involved. A lot of artists are buried under the debt of their first release.
Now, fans can decide if they like an artist enough to make an impact and how much of an impact, which is just awesome. It helps artists avoid accepting exploitation by a label loan shark. What used to be labeled begging or a devaluing of the artists work is now proving to be quite the opposite. If I can give just $20 to an artist that I like for a new album, that album becomes even more valuable to me, because I helped make it. Even if its just a little and never mind the added value the artists usually offer. And it goes to the artist, not some greasy exec.
Is this the new business model to reshape the music industry? I don’t know, but it certainly has it’s place among the other outlets such as streaming radio, youtube videos, live performances, merchandise, physical media, digital downloads, limited edition box sets, posters, site subscriptions, corporate sponsorships, product endorsements… *breath*… Im sure there are many more greater or lesser ideas to come and thats very exciting too.
haha woops wrong article! NaRf
I found this to be very insightful. Thank you! I’ve also been getting a lot out of drummer Brian Doherty’s website as well. He has some interesting views on music and the music industry at briandoherty.net
that’s only on the sync fee! you still get 100% of your royalty pay.
Helpp… I pressed Opt in.. I want out, how can I do that??
Daniel, can you recommend another option for musicians who are looking to make the jump into the licencing world?
While I’m thankful that Pumpaudio/GettyImages got my music into some major network placements, I was disappointed that GettyImages integration with Soundcloud did not seem to go anywhere; in other words, when I synced many soundcloud items to GettyImages licensing, it never even showed up along with my previous (I’ve since removed my content from GettyImages due to a new licensing deal with a different company) catalog that was listed on GettyImages web site.