There's much less of a culture of posting other peoples work on soundcloud, it's much more focused on letting artists share their own work.

You might be right in terms of proportions, I don't know but there is plenty of copyrighted material on Soundcloud not belonging to the poster.

This only really matters in the context of such postings not being helpful to the artists.

Having a track sampled in a remix or mashup might seem good for the original artist, but that doesn't mean their record label won't try to shake SoundCloud down for cash. Especially if soundcloud start making money (and why else would VCs have invested?).

This is certainly true; at some stage soundcloud though has the potential to be the label, though. Or in other words, to be the distrtibution channel as there is no/limited physical need to press records, when DJs are downloading the tracks. With this in mind, your point still stands, but the role of the label being more of a marketer is its highest value added service. And in that role, it would seem they would want to encourage promotion of the tracks. The open issue is the monetization of that scale by the two parties, who gets what cut. And that is going to continue to be fought over...regardless of who owns/controls the copyright...as that will also be in flux going fwd imho. But we shall see....

Quick search yielded numerous copyright infringements. Not even remixes, plain pirate material. So I am wondering how does it work on business side, how do you defend from it? Same question would be appropriate for imgur too. How can you shield yourself from it if you're a small startup with no cash? You wait for legal papers to flow your general direction and hope for a deal?

There's a copyright infringement form if you are interested. Soundcloud is not usually used as a free music service, (although most creators allow free downloads), it's mostly about discovering and collaborating. Even if they removed all infringing content, my feed would be barely less interesting.

DMCA safe harbor is usually enough to protect you http://en.wikipedia.org/wiki/Digital_Millennium_Copyright_Ac....

To add to what others have said, there's no real point in posting copyrighted content. No ad revenue, it's hard to search for, and the free tier has limited storage space to do so.

The people who pay for SoundCloud pay for it because it makes them money, and the only way to make money like that is to have something worth selling (your own stuff).

They've got fairly aggressive automated systems for identifying and flagging material that's registered with rights-management agencies. It works for both individual tracks and material featured in mixes. I've even had my own music taken down preemptively before since the label had already registered the forthcoming track. I was able to fill out a form with some personal info and they put it back up pretty quickly, but it was still annoying (though I completely understand why they have it set up that way).

Not sure how other people are confounding the detection algorithms. They're even resilient to changes in pitch. As a result, a lot of DJs I know can no longer post mixes to soundcloud and have to use other means.