"Music start-ups have been a money incinerator for a long time, but that doesn’t stop investors from trying again. Here’s the latest example, which I first wrote about back in October: SoundCloud, a German-based file-sharing service, has raised $10 million in a funding round led by Index Ventures and Union Square Ventures.
While lots of music services are still trying to figure out how to make money by distributing copyrighted music you’ve heard of, SoundCloud is taking a different tack. As I wrote last fall:
It’s designed to let professional and amateur musicians share their own music with each other and the public, via cloud-based files that the company hosts.
Once the tunes are on SoundCloud’s servers, the service makes it easy to move the stuff around the Web, via its own widget and an API that’s showing up on lots of interesting sites, apps, services and devices, including Facebook and Apple’s iPad. You can load SoundCloud files into Spotify, the streaming music company that Index has also invested in.
The service uses the freemium model, offering most of its capabilities for free, and charging up to $700 a year for more storage and extra features.
You can also use SoundCloud for less enlightened purposes, like sharing music you don’t own. But the company has recently implemented an audible “fingerprinting” service, like the ones Google’s YouTube uses, which allows copyright owners to take down files they don’t want on the Web. And that should give the company legal cover, unless the YouTube/Viacom case takes a very different turn.
In a blog post announcing the funding, SoundCloud says it will use the money to scale faster and “be more present in the US.” It also posts short clips, using its service, from its new investors–Index’s Mike Volpi and Union Square’s Fred Wilson."
(media memo)
Comment by techdirt:
" As we’ve discussed before, copyright law is effectively broken when it sets up fair use as a defense, rather than a proactive right. Fair use should be seen as the default until proven otherwise, if fair use is really (as is claimed) designed to be a pressure valve on copyright law to allow free speech.
Unfortunately, the industry has pushed back on this notion to a huge level. The very crux of the YouTube-Viacom legal fight is really over this issue. As many have noted, in the specifics of the lawsuit, Viacom basically notes that it has no problem with YouTube starting with the exact date that it implemented its ContentID program. In Viacom’s (and much of the entertainment industry’s) interpretation, the DMCA requires such filters. The likely reason that smaller companies like SoundCloud are now implementing filters as well is that they know there’s a half decent chance that the eventual outcome of lawsuits like the Viacom/YouTube fight will mean that a company is required by law to have such things in place."
via neumusik
BYEBYE SOUNDCLOUD?
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