SoundCloud’s big differentiator is its offering of unofficial, user-uploaded content that the major labels don’t release and that isn’t on Spotify or Apple Music. Or at least they weren’t. The first unofficial single-track remixes just went live on Spotify and Apple Music thanks to their partnerships with music rights management service Dubset.
We’ve reached out to Spotify and Apple for comment. [Update: Spotify confirms that short-form mixes are now available. This is apparently just a small part of its integration with Dubset. It says the bigger part is when long-form mixed content becomes available, but there’s no definite timing on that.]
Still missing are the multi-song mixsets DJs often share from their gigs. But Dubset is also equipped to distribute royalties from those and its deals permit them. Dubset CEO Stephen White tells me “Mixes are coming next!”
Dubset works by scanning an entire mix and matching every part of the track to its Mixbank of snippets of official songs based on Gracenote’s audio fingerprinting database. Dubset matches the samples in a mix to these snippets, then distributes royalties for the play evenly to the original rights holders. In this case, Anderson .Paak’s rights holders would get paid because his music is the basis of Jazzy Jeff’s remix.
White says 700 million people a month listen to mixed content, making it a big opportunity. But record labels have historically fought against unofficial mixes because they considered them piracy since they weren’t getting paid. Dubset gives them a fair share, so they’ll permit remixes and mix sets to stream on the major platforms. Royalty revenue from the platform is shared with rights holders while Dubset gets a cut.
“Content owners have been very supportive. The publishing and label deals we have under license provides a large catalog to work with,” White tells me. This “allows some of the content that until now has only been on YouTube and SoundCloud to come to these great paid services where content owners will get paid!”
The fact that unofficial content is now going live on Spotify and Apple Music could reduce the acquisition potential for SoundCloud, which the Financial Times says is in late-stage negotiations to be bought by Spotify. TechCrunch’s sources confirm the two have recently been talking about M&A. But if Spotify can get the best of SoundCloud’s content without coughing up a ton of money for a broken company that’s been struggling for years…
Without the legal grey area of music as a differentiator, Spotify and Apple Music will end up competing on product features like Spotify’s Discover Weekly playlist and Apple’s Beats 1 live radio station, as well as on exclusives and early access to big releases from top artists.
The real winners here, though, are the artists and listeners. Original rights owners will get paid, remix producers and mixset DJs can share their creativity without being pirates and listeners can hear the music they want no matter how it got made.