SoundCloud Rightsholder Discussions Hit Impasse, Labels Question Site’s Future

Social music platform SoundCloud's efforts to find a sustainable business model have hit a major roadblock. Talks with the three major label groups have stalled, according to new reports, because rightsholders are not satisfied with the royalties that SoundCloud is offering. Communications with Universal were reportedly cut off more than two weeks ago. 

The Pressure Mounts

The rumor mill had these deals virtually signed just a month a ago. But now the delay stops SoundCloud from much need monetization of licensed content on the site. “The clock is ticking on how long they can continue operating as a service that’s unmonetized,” an unnamed source at a major label told The Financial Times.

But the startup's pockets appear deep enough to hold out awhile longer. To date SounCloud has received $123.3 million in funding over 5 Rounds from 9  major investors.