I know that it took a long time for YouTube to figure out the licensing stuff. As I said, tremendously difficult, yes, but not impossible.
Yes it does. Youtube is not about music, their focus lies somewhere else, music complements their product but they are not dependent on it and besides, it's a just one rev stream compared to their main rev channels. Another example: Apple has Apple Music to strengthen the network effect of their products, not because they want to enter the music business. So, both used labels to complement their core products. Both would survive without deals to the labels. SoundCloud would not survive without those deals because then SoundCloud wouldn't have any product.
> As I said, tremendously difficult, yes, but not impossible.
I disagree, 10 years negotiations sounds like something impossible for a company which core solely relies on music, who wants to fund a company for 10 years with an unclear outcome?? For Youtube it was a different story: In this ten years Youtube severely damaged GEMA's reputation by displaying billion times that it's GEMA's fault that user can't listen to music. So, it's questionable if any other company with less power would have been able to strike a deal with the GEMA. Anyways, Youtube could have negotiated 100 years, they still would make revs through other channels.
As the article mentions, SoundCloud eventually did reach an agreement with the music companies, showing that it didn't have to take 10 years, but took longer still than they expected.
So my theory is that the business model is not broken by design as you claim, but that SoundCloud got into the trouble it is now in by poor strategy and decision making.
If the solution is that they just charge $80/mo, then "well duh," but there are other, non-licensing, forces involved at that point. The labels would love their slice of that model, but good luck selling it.
I'd say "yes." The PROs don't have as much leverage over YouTube as they do over music sites. YT can tell the industry, "fine, we'll just continue the way we've been going and you'll get nothing." Google has scads more money and lawyers than the record industry; Google makes the entire record industry's annual revenue every two months. UMG ain't shutting them down.
You'll notice that Google Play Music is not the same situation as YT, and is more like Spotify et al. The issue with pure audio streaming is that the music is a primary use of the service, so it's easier for the PROs to beat them down, legally. GPM could be prevented from operating just as other subscription streamers have been (threatened).
Put another way, YT still has a bazillion unlicensed items and the licensed streaming services have none. UGC audio sites are somewhere in the middle, but my contention is that they would have to let the PROs crawl up their buttholes just to unlock the doors every morning in order to settle the business model.