Skip to main content

SoundCloud pulls controversial contract terms after Verge report

SoundCloud pulls controversial contract terms after Verge report


The Verge has obtained a copy of the new agreement

Share this story

Photo by Amelia Holowaty Krales / The Verge

SoundCloud has rewritten the contract for its self-monetization program, called SoundCloud Premier, following The Verge’s report that the deal was unfair to artists. The new contract is currently being served to artists signing up for Premier, and it will be emailed to those who have already joined Premier at an unspecified future time. The Verge has obtained a copy of the new agreement from artist and DJ duo Golf Clap and embedded it below.

SoundCloud announced the changes in a blog post titled “Clarifying the SoundCloud Premier agreement,” which states that SoundCloud has “seen feedback that some language in the original program agreement was too broad, and we want to avoid any doubt around your rights and how we run the program.”

The broad language regarding the covenant not to sue has been removed

The company has revised every major contentious point listed in The Verge’s original report. In particular, SoundCloud says the broad language regarding the covenant not to sue has been removed. “Our team reviewed the agreement,” SoundCloud’s post reads, “and we’ve clarified or removed elements that may be unclear or not relevant to the open service we have now—this includes the removal of the outdated covenant not to sue language that was part of our previous invite-only agreement.” The Verge reviewed SoundCloud’s new contract and found this to be correct. In addition, all mention of mandatory arbitration has also been removed.

SoundCloud’s revised contract no longer stipulates an artist must reach $100 in accrued revenue in order to be paid out, and it has replaced language about its variable payment schedule. The company now commits to a regular accounting period and will “calculate Your Revenues on a calendar month accounting period basis.” Furthermore, because there is a defined accounting schedule, SoundCloud’s promise of delivering statements “within 45 days after the end of each calendar month accounting period during the Term” now has weight.

The new contract says the company commits to notifying artists of any changes to these terms with two weeks notice via the email on record with their account. Previously, SoundCloud’s agreement did not require it to provide any notice, saying, “It is Your responsibility to check these Terms and Conditions on the Platform from time to time for updates.”

The new contract also extends the statement challenge window from six months to the industry standard of two years. There are also some additions that further detail portions of the deal, such as an expanded Territories section, which states the countries songs will monetize in.

There is still no clarification on revenue calculations by tier or country within the revised document, and it remains to be seen how transparent SoundCloud Premier statements will be on this point.

Artists can now count on all these terms to be firm, including their pro rata share of 55 percent of advertising and subscription revenues, as SoundCloud has eliminated this line from the original contract: “We may, at any time and without liability, modify or discontinue all or part of the SoundCloud Premier monetization program.”

Revised SoundCloud Premier ... by on Scribd