RumorFact(ory): Amazon and SoundCloud

Some rumors are quickly borne out as fact. Others are just residue of the speculation factory. This week, Amazon and SoundCloud are in the news.

The Amazon rumor mill is in full production, following the company’s invitation to a press event on Wednesday of next week. speculation is driven by Amazon’s existing streaming business, a recent price increase for that business, its hardware device unit (Kindle), and reports of recent discussions with music labels and video-content owners.

Something will be announced Wednesday, that much is certain. The company has squashed speculation of free movie streaming. But the Wall Street Journal thinks that ad-supported video streaming might be imminent. that would neatly complement Amazon Prime, a subscription service that includes ad-free movie/TV streaming. Amazon recently announced a 25% price hike for Prime.

Music plays into Amazon rumors in the form of videos (again, supported by ads) that could become part of Amazon’s music-product sales (CDs and MP3s).

Soundcloud is in the news in the licensing arena. Digital Music News reports inside sources saying that the upload/streaming platform is talking with labels about licensing terms for label content which is put on the site by users. Currently, SoundCloud is protected by the Digital Millennium Copyright Act (DMCA), which provides “safe harbor” to user-upload content platforms. the platforms themselves are not liable when users infringe copyrights, as long as the companies provide a take-down mechanism.

SoundCloud is at an interesting inflection point in three ways: audience growth, type of content, and positioning by its investors.

• Audience: Originally launched as a collaborative site for music producers, SoundCloud is now a popular listening service with at least 250-million users per month.
• Content: The content has become infested with unauthorized music sharing of label content.
• Positioning: SoundCloud’s investors have proclaimed it to be “YouTube for audio.” that declamation is bound to get the attention of content owners, as SoundCloud becomes a bigger target for takedown demands.

Authorizing user uploads of label content would be more expensive for SoundCloud, which is currently ad-free, but would also reduce operational expense of taking down infringements, and lead the way to audio-only parity with YouTube.