Date: April 25th, 2025

Dear Creators,

We're sharing some important and unexpected news regarding recent changes by YouTube that affect how music is paid for on Shorts. We know changes like this are significant, and we want to explain the situation as clearly as possible, especially given what we understood and communicated previously.

What Happened & Our Understanding Until Recently

As you may know, YouTube recently introduced a new, industry-wide policy for Shorts music payments, effective March 2025. This policy has significantly reduced the revenue generated from music used in Shorts, marking a strategic shift in how YouTube allocates funds for music licensing, redirecting them away from Shorts and toward products like YouTube Music and long-form video content.

Soundvio operates under a special licensing agreement with YouTube – the kind usually reserved for only a handful of top global music companies. When YouTube's policy changes first surfaced in March, discussions were initiated to clarify how our specific agreement would be treated.

Based on those initial discussions and, crucially, an analysis of a large data sample presented to us back in March, everything indicated that our agreement was holding firm and that we were shielded from these widespread reductions. This was the information we had, and it formed the basis of our understanding and communications with you. We genuinely believed Soundvio was unaffected and that our operations would remain unchanged moving forward.

Crucially, late last week, we were informed of an unexpected policy change; that YouTube has overridden our existing licensing agreement.

This licensing agreement, which was in place to protect rights-holders from broader market shifts, has now unexpectedly been rendered void by YouTube. In this update, we've been told YouTube's policy now applies universally for all music rightsholders throughout the entire music industry, including those with bespoke licensing terms, such as Soundvio. As a result, starting March 1st, revenue from music licensing via YouTube Shorts is expected to decline by approximately 70%.

We've disputed YouTube’s decision, and discussions are ongoing in an effort to restore terms aligned with our original agreement. Unfortunately, we believe it's unlikely YouTube will reverse this policy in the near term. We understand this is both disappointing and abrupt, especially given that it directly contradicts the assurances previously communicated to us, and in turn, to you.

Why the Discrepancy and Delay?

We acknowledge this differs significantly from our previous communications, and you may be wondering why this wasn't known sooner. To help give you context, we've provided a condensed version of our efforts:

• In early March, we analyzed a large data sample together with our data team. The conclusion was that YouTube had kept consistent with our licensing agreement and that we were unaffected. We’ve openly shared screenshots with creators who’ve asked, and this early picture gave us confidence at the time.

• Despite drawing these conclusions on the initial data sample, we've been requesting a comprehensive assessment as far back as early March to conduct a full, independent analysis. However, accessing this data proved to be a slow process, largely due to added security restrictions that come with being a YouTube CMS owner. Access is limited to a small group of specially certified personnel, which created significant bottlenecks and delayed our ability to independently verify the situation in a timely manner.

• The complete assessment, coupled with news that YouTube has overridden our agreement, came to us late last week. We have been in internal discussions to validate the full scope and to confirm if a reversal is expected anytime soon, which we now believe is unlikely to happen in the near term.

In short, we acted on initial positive indicators while simultaneously working to get the full, detailed data, which faced delays due to access limitations. The arrival of the complete assessment last week, coupled with the news of YouTube having overridden the deal terms, means that our position and the revenue outlook have shifted significantly.

Given this sudden change, we sincerely apologize and understand the frustration and confusion this shift causes. We’ve shared all the information we've had throughout this period in good faith, but we recognize this new information contradicts what we’ve communicated earlier. To better act on these types of events in the future, we are taking steps to improve our internal processes for verifying revenue data more rapidly and keeping you closer in the loop on ongoing events. Naturally, we are committed to rebuilding any confidence affected by this.

Our Response & Changes

We share your disappointment in this industry-wide shift by YouTube. In response, and to support you through this change, we are making the following adjustments effective immediately:

1. Increased Revenue Split: All creators currently signed with Soundvio will be moved from 50/50 to a 70/30 revenue split (you receive 70% of the net revenue Soundvio receives). This is the maximum split we’re able to offer while ensuring fair compensation to the artists whose music powers your content, as well as covering the operational costs required to run Soundvio. This updated split will only be limited to creators who’ve signed on or with whom we’ve been in active discussions before April 25th, 2025.

2. Option for Immediate Termination: We recognize that this development represents a significant departure from our earlier communications. As such, effective immediately, we will honor any requests to terminate your Soundvio agreement should you wish to explore alternative options. To initiate this process, please get in touch with us at support@soundvio.com.

This revenue adjustment applies to earnings generated from March 1st, 2025, onwards. Consequently, the upcoming payout processed at the end of April (covering March earnings) will reflect these new YouTube Shorts rates received from YouTube. For creators who onboarded towards the very end of March, the full reflection of these rates might potentially spill over into the May payout, depending on YouTube's reporting and payment timelines.

Looking Ahead Together

Despite this unexpected setback stemming from YouTube’s policy change, we remain confident that Soundvio continues to deliver meaningful value. Why? Because our core offering hasn’t changed: access to a vast, curated library of music from real, established artists, often of tracks your audience already knows and loves.

Experienced creators know that using viral music is a key strategy for boosting views and engagement, especially as algorithms often boost content using trending sounds. Accessing Soundvio's library, consisting of the largest collection of viral music available through music rev-sharing, helps you easily use this strategy, giving your content a significant advantage in getting discovered compared to using less-known or generic stock music.

As far as we know, Soundvio remains uniquely positioned in offering one of the largest selections of pre-cleared, monetizable music from well-known artists. For that reason, we believe Soundvio remains a valuable creative and strategic tool to help your content succeed, and we are committed to continuously expanding our music catalog for you to keep up with the latest trends.

Alongside your new 70/30 split, we are dedicating ourselves to helping answer any questions you might have about these new industry changes and providing you with the best possible support to guide you through this period. We know many of you are eager for the analytics dashboard, and we're happy to report we've tested an early preview and are working on refining it, and are aiming to release a version that meets your needs as soon as possible.

We value your partnership and your trust and remain committed to transparency and will update you immediately if the ongoing discussions with YouTube lead to any further developments or policy changes.

Please reach out to support@soundvio.com if you have any questions or want to discuss this further.

Sincerely,

The Soundvio Team