We’ve known for a long time that music streaming royalties are fundamentally broken. As revenue moved away from physical music sales, it became increasingly difficult for many independent artists to make a living from recorded music. But it all came to a head as the pandemic completely took live music out of the equation.
Some services have sought to reverse the trend. The immensely popular Bandcamp Fridays are a notable example of this, offering all revenue to artists and labels one day a month. And now SoundCloud is looking to shake up the way it pays its own independent creators — a move that could prove a big boon for musicians on a service that has lent its name to at least one popular music subgenre.
The site will institute a new revenue structure early next month. Soundcloud breaks down “fan-powered” royalties this way,
Fan-fed royalties are a fairer and more transparent way for independent artists who monetize directly with SoundCloud to get paid. The more fans who listen on SoundCloud and listen to your music, the more you get paid.
Under the old model, the money from your dedicated fans goes into a giant pool that is paid out to artists based on their share of total streams. This model mainly benefits mega stars.
In fan-fed royalties, you get paid based on the actual viewing habits of your fans. The more time your dedicated fans spend listening to your music, the more you get paid. This model benefits independent artists.
The service is available to independent artists who monetize their pages through certain Pro accounts. There are a number of factors that go into the final payout (the first of which will arrive in May), including whether listeners have a subscription, how much they’ve listened to an artist versus others, and the ads they’re listening to. they listened. The fine print is available here.
Musicians are increasingly vocal about their inability to live off streaming income as the pandemic has cut off major sources of income over the past year. Spotify, in particular, has drawn heavy criticism as the company has spent hundreds of millions on podcast acquisitions while retaining old revenue models for musicians.