A contract recently leaked online detailing SoundCloud's plans of a subscription service. The company has been looking for ways to monetize their service by negotiating with labels and publishers. The unsigned contract details three possible levels of SoundCloud membership 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.
The contract delves into deeper detail, outlining a plan where labels would be paid based on a percentage of streaming revenue, a percentage of royalties, or a per-user fee: 18 cents a month for each person who signs up for “Additional Services” and 80 cents a month for each “Full Catalog” user. Similarly to the contract between Spotify and Sony that leaked last month, this ensures profits for the labels even if the streaming numbers are poor.
Independent publishers would receive a $350,000 in advance from SoundCloud in addition to a “Most Favored Nation Clause" that once again follows the Spotify/Sony deal to ensure the publishers get favoirable terms even if SoundCloud enters into a better deal with major labels. You can check out the full contract below.