SoundCloud is trying something new for a major music streaming service: paying independent artists a share of their listeners’ actual subscription fees. The company call that âFan-generated royalties,â and that means a SoundCloud subscriber’s subscription fees or advertising revenue will be split among the artists they actually listen to, rather than going into a big pot and being distributed among the most popular artists of the platform.
This is a major change for the industry and one of the independent artists insisted. Currently, most music streaming platforms award the world’s biggest stars with the most royalties. At Spotify, for example, the company calculates the number of feeds shown on its platform in a given country, and then calculates what portion of those feeds went to a specific artist. The result is that the smaller artists, who may not have massive reach but also have a dedicated and loyal following, end up not making a lot of money because they make up a smaller portion of the overall stream.
SoundCloud says today that its new system will change that. This specifically cites a musician with 124,000 followers. With the old model, this artist was making $ 120 per month, but with fan-generated royalties he makes $ 600.
So far, SoundCloud has not made deals with the three major record companies – Warner, Sony or Universal – but it is able to implement this model with independent artists that it monetizes directly through its SoundCloud Premier, Repost by SoundCloud, and Repost Select Levels. (These services make SoundCloud the distributor of music, whether only on SoundCloud or other music streaming services.) The nearly 100,000 artists who participate in these programs will be the first to receive royalties based on the fans. They will receive their first payments after April 30 of this year.
It’s unclear how SoundCloud will balance royalties with its payments to major music labels or how it will distribute a listener’s income. But for now, it seems experimental. If this is successful, artists could advocate for more platforms to adopt this model on, and if not, streaming platforms can continue with the status quo, perhaps to the detriment of the smaller ones. artists.