SoundCloud’s New NMPA Deal Is Irrelevant for Independents

Adam Marx
Adam Marx
May 6, 2015 · 3 min read

News broke today that SoundCloud has reached a deal with the National Music Publishers’ Association (NMPA) to secure publishing rights for the artists who use the service as a content publishing site. In the byline of the piece is the notation that as a result of the deal, independent publishers will now be able to receive royalties from their content one the service. Yet while the news sounds groundbreaking as a headline, it nonetheless fails to address the problem that I identified earlier — namely, that SoundCloud is fast becoming an obsolete option for independents.

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The NMPA and SoundCloud logos

As the streaming service has worked hard to monetize in the last few years, it has begun a move away from the independent arena in which it started. On the heels of a licensing deal with Warner Music Group (attained last November), SC has been attempting to lock up similar deals with Universal and Sony as the major labels try (but fail) to reestablish their dominance in the musical landscape. Yet despite the fact that only Warner has signed on for now (not really a good sign for SoundCloud’s major label ambitions), it’s still clear that SC’s priorities are shifting in favor of a major label paradigm.

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Major Label Percentage Ownerships of (some) Streaming Services

As a result, the news of SoundCloud’s deal with the NMPA today is essentially irrelevant for independents because it doesn’t address the real problem of independent artists: the problem of competition and exposure. Inasmuch as the deal sounds good for independent publishers, it’s unlikely that it will give them any edge over their major label counterparts. Actually that’s a misleading statement — the major label publishes already have a massive edge over the independents, so what this deal will really fail to do is make the two equal.

NMPA CEO David Israelite is quoted as saying, “This agreement ensures that when SoundCloud succeeds financially, so do the songwriters whose content draws [users to the site].” However, I feel that though Israelite’s intentions are good, his notions of the dynamics below the surface are misguided. The royalties that independent artists and publishers will supposedly earn exist essentially in theory, and this doesn’t even take into account the minuscule amounts of each royalty payment.

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What the major label industry really looks like; The Big Three

In the end, the royalties “earned by the independent publishers” are essentially nondescript because in order for any real money to be made through royalties, the artist is required to have a massively large and engaged fanbase to drive those royalty-dyanmics. Independents by nature rarely (but not never) have these sorts of powers behind them. Thus the resultant playing field is still the same: the major label artists (and labels) more or less control the spotlight while the independents are left in the large swaths of shadow. This is a good publicity piece for SoundCloud; but for the independent artists and publishers, it’s more or less irrelevant in the grand scheme.

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Originally published at adammarxsmind.wordpress.com on May 6, 2015.

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