SoundCloud’s Repost Network Called Out By Artists for Past ‘Predatory’ Practices

In May 2019, the streaming service SoundCloud — where stars like Post Malone and Billie Eilish uploaded breakout singles early in their careers — announced that it was buying a company called Repost Network. The acquisition was part of an effort to “build the most comprehensive set of tools to help creators,” according to SoundCloud CEO Michael Weissman at the time, and since then Repost has been central to SoundCloud’s aggressive push into distribution and artist services. But Repost’s success was built in part on terms that could exploit young musicians, according to a dozen acts who worked with the company before the acquisition.

Related

SoundCloud Steps Up Distribution Services With Acquisition of Repost Network

Soundcloud originated as a service that was free to use for both listeners and artists — a place for aspiring acts to gain exposure, “the largest audio discovery platform in the world,” but not a place to rake in cash. Repost started in 2015 with the goal of helping artists on the platform make money and soon added the ability to distribute songs to other streaming platforms and provide some marketing services. By 2018, Repost co-founder Jeff Ponchick said the company was “the largest indie rightsholder on Soundcloud,” with “a $6–8 million gross revenue run rate,” and the following year, Repost was absorbed by the mothership in a $15 million cash and equity deal.

While Repost says it wants to help artists make a living off their music, several acts described the platform as “predatory” because it buried contractual details — previously a two-year exclusive license, a 30% cut of all revenue, and an auto-renewal — in terms of service. A 2017 study by Deloitte found that 97% of people between the ages of 18–34 do not read terms of service before agreeing to them. Many of the artists who shared their stories with Billboard were teenagers when they signed up with Repost — the youngest was 15 at the time — while a couple were in their early 20s; all but one of those acts said they had no idea that, by clicking a button, they had locked themselves into a stringent licensing deal.

One manager whose client was frustrated by his experience with Repost accused the company of “IP trolling.” “They are taking advantage of young artists at a stage in their career when they often don’t have any representation or counsel,” he added. (Everyone spoke on the condition of anonymity — even though several artists have gone on to achieve commercial success — due to fear of reprisal from Repost or SoundCloud; Repost user agreements viewed by Billboard also contain confidentiality and non-disparagement clauses.)

What’s more, Billboard confirmed that several artists under the age of 18 signed up for Repost services — despite the fact that minors do not have the knowledge and expertise required to vet contracts, and lawyers say they are not even able to enter into legally binding agreements in California and many other states without going through a ratification process in the courts. Peter Scoolidge, a partner in Scoolidge Peters Russotti & Fox, LLP, who looked over a 2019 Repost agreement obtained by Billboard, notes that “someone who is just clicking through a website to post their music online so they can make some money, even if they carefully read the terms, probably would not understand the consequences of signing something like this.”

At a time when numerous companies from TikTok to Tencent are diving into music distribution and fighting for market share, these artists’ experiences with Repost serve as a cautionary tale — and a reminder to always dig into the fine print.

SoundCloud declined to answer specific questions about Repost’s practices. In a statement, a spokesperson noted that “Repost has introduced a better revenue share while increasing its offerings, made terms and conditions more easily accessible, further developed parental consent protocol for artists under 18, added dedicated customer service and more” in the wake of the SoundCloud acquisition. “Importantly, we believe in artists building careers on their own terms,” the spokesperson added, “so Repost obtains limited term distribution rights on a track-by-track basis and ensures artists always own and control their intellectual property — both master recording and publishing.”

“You Needed Repost”

Repost was started by Jeff Ponchick and Joey Mason. Ponchick, now an executive at SoundCloud, had a background in editing TV and YouTube content before pivoting into the music industry. SoundCloud, which said it had 175 million listeners in 2015, was starting to place ads in front of songs as a way to generate revenue. Ponchick told LA Startups in 2020 that he “was just blown away by how much money was slipping through the cracks.” In an interview with Indie Hackers four years ago, he said this was an issue he was suited to address: “I… understood the hurdles YouTube had gone through to make monetization better, and had a bit of a product background.”

Ponchick and Mason built their own product to help artists capture revenue from SoundCloud and YouTube plays. The interviews Ponchick has given are light on details about the tech behind his breakthrough, but it was good enough to get SoundCloud’s attention. “Once upon a time, to monetize SoundCloud, you needed Repost,” according to one manager whose clients worked with the company.

The company also added the ability to distribute music to other streaming services. This was a savvy move at a time when many artists started their career by uploading songs to SoundCloud, believing, as Lil Peep once texted, that it was “the most brilliant site on the internet.” Repost could help expand the reach of the acts who used SoundCloud as a launching pad by putting their tracks on Spotify or Apple Music — and collect royalties from those platforms as well. On top of that, like many distributors do, Repost offered some marketing services, including SoundCloud playlisting, which managers say could impact a track’s exposure.

Ponchick initially convinced SoundCloud acts to sign up for his product by sending cold emails “all day every day.” He said in the Indie Hackers interview that Repost later “completely exploded” in popularity, and hundreds of artists started to apply to join daily. Ponchick told Indie Hackers that his company accounted for “5–10% of the entire platform’s earnings.” (SoundCloud’s revenue that year was around $127 million.)

Since the SoundCloud acquisition, Repost has split into two tiers. One is accessible to all for $30 a year. It asks for artists to enter their age when they attempt to sign up; while acts still don’t have to read the terms of service to agree to them, the license now lasts one year with an auto-renewal clause, and Repost takes 20% of revenue from platforms other than SoundCloud. This offering is more in line with industry standards, probably because SoundCloud is now attempting to compete in a crowded music distribution landscape. Repost’s other tier, Repost Select, is application only, so the terms aren’t public. (Acts can still upload to SoundCloud without using Repost.)

“I Found Out Later You Couldn’t Leave”

Before Repost was purchased, the company was “not up front about what you’re signing and agreeing to,” says one singer who regrets working with Repost because she believes it’s not “creator friendly.” Another rapper who spoke on condition of anonymity described a first encounter with the company that was echoed by more than half a dozen of his peers. “I wanted SoundCloud monetization,” he explains, so he signed up to work with Repost in 2016. “They sent me an email saying I was approved,” he recalls. “That was it.” He says he was not aware that he was entering into a binding two-year deal that automatically renewed.

The rapper said that he hoped that aligning himself with Repost would serve as a springboard for his nascent career. But, he adds, it actually ended up feeling more like a trap: “I found out later you couldn’t leave [for two years], and they were taking 30% of everything.”

This artist, like all those who spoke for this story, didn’t have a manager or lawyer when he signed up for Repost. Four music industry attorneys told Billboard that if prospective clients had asked them to review Repost’s 2019 terms of service before signing up, they would have advised those artists against agreeing to those terms: The cost was high, the value proposition was vague, and there was no advance payment.

Managers and lawyers say that distributors which take a 30% cut typically provide an artist with an advance and commit additional money for marketing and promotion. When it comes to deals that involve no upfront money, several distributors allow artists to sign up for a flat fee, but revenue deals typically take 10% to 20%. “Taking 30% on a basic distribution tier with no initial funding and no guaranteed label services behind it is double what I’m usually comfortable with,” says Matt Buser, an L.A.-based entertainment attorney. (Now that SoundCloud owns Repost, the company offers advances to select artists in exchange for distribution rights.)

In addition, the lack of flexibility in Repost’s deals gave music lawyers pause — it’s easy for artists to break ties with distributors like Distrokid or Tunecore if they want to go elsewhere. Acts “use distributors like Repost as stepping stones to get some momentum going on tracks, and then hope that they can step up to a major label,” explains Larry Katz, a veteran L.A.-based entertainment attorney who reviewed a 2019 Repost agreement. “If tied to Repost for distribution for two years, the ability to step up is thwarted, unless the artist can negotiate an early termination, which would likely result in them having to make a payment to Repost which they may not be able to make — or the major label/next level distributor may not be willing to make.”

Sure enough, a​rtists and managers say the deals they had unwittingly entered into with Repost hampered them when their music started to perform well and prominent labels took interest. This was the moment when several acts discovered they had signed away their rights to Repost for a two-year term — they wanted to transfer their music over to a new partner, only to find out that they were locked in by an old one.

One manager who found himself in this situation was relieved when the label agreed to pay to get his artist out of the Repost deal. But some artists had to adjust deals to accept less favorable terms because they couldn’t hand over some of their songs until their deal with Repost expired. “If you get a little label interest and they find out someone has 30% of you, it’s not great,” says a senior label executive who spoke on the condition of anonymity.

“What Are You Supposed to Do if You’re a 16-Year-Old?”

More concerning is Repost’s apparent willingness in the past to enter into deals with minors — the youngest act Billboard found was 15 — who were unaware they were signing an agreement and did not have the experience necessary to properly vet a deal. Managers who reviewed Repost’s early user agreements said it did not mention anything about the age of the artist signing up. A 2019 agreement viewed by Billboard included a clause saying an act must be 18 or older to use Repost, or have a parent or legal guardian review the terms of service.

Again, almost every artist who spoke for this story did not read the terms of service. But even if they had, and had then arranged for a parent to read the terms as well, lawyers say parental review is not enough to enter into a legally binding contract with someone under the age of 18 in many states.

Two attorneys who spoke for this story say that the artists who started working with Repost as minors should have been able to extract themselves from their deals because they were not formally ratified by the court. But this requires contractual expertise, deep pockets, and the resolve to slog through a legal battle. Not many teens have all three.

“What are you supposed to do if you’re an inarticulate 16-year-old kid [in one of these deals]?” asks one manager who unsuccessfully fought to extract an artist from a Repost deal that he wasn’t aware he had entered into. “You can hold labels and publishers accountable — there’s oversight.”

“I don’t know who the oversight is for Repost,” he adds, “unless you’re ready and able to litigate.”