It included provisions which directly contracted their pre-launch announcements (such as regular monthly payments; instead, artists would have to reach a $100 threshold to trigger any payment at all). The contract also included a covenant waiving the artist or rights-holder’s right to sue SoundCloud.
What’s worse: the 17 page contract was not downloadable, and by sheer length seemed to encourage artists to click through in the manner most internet users do when agreeing to Terms & Conditions on random websites without agreeing to clauses that directly contracted their published claims.
I strongly encourage everyone to read The Verge’s updated story, which is devastating. If I had to speculate, it appears SoundCloud’s legal department and C-level executives are at war, and legal screwed them hard.
“SoundCloud did not contest the authenticity of the document,” Deahl and Patel note. “Instead, the company emphasized that the agreement was easily accessible to anyone participating in the program…
“But these bullet points do not include the covenant not to sue, or other contentious clauses like the flexible payment percentage and shortened statement challenge period.”
Later in the day, SoundCloud issued a statement to The Verge, reiterating their pre-launch claims but not explaining why the contract contradicts them. “We are always looking for ways to simplify our agreements for the benefit of our creator community,” it read, “and will take the opportunity here to avoid future confusion.”
Now SoundCloud has just released a third statement directly to the public on their blog. In response to “feedback that some language in the original program agreement was too broad,” their “team” reviewed the agreement and “clarified or removed elements that may be unclear or not relevant.”
Rather than publish the contract publicly, SoundCloud again requires “eligible creators” to sign up for Premier and view the updated agreement here.
This has been a critical stumble for SoundCloud, which under its highly caffeinated CEO Kerry Trainor has attempted to wedge the service into a more “artist friendly” niche between Spotify, Pandora and Apple Music. Part of this has been through insisting on transparency. Keeping contracts (and not itemizing changes to them) is pretty much the opposite of transparency, not to mention stupid: anything that tens of thousands of artists and representatives are going to have to sign is going to be leaked anyway, as The Verge just showed.