SoundCloud becomes first streaming platform to distribute subscribers’ fees only to artists they listen to
2 min readSoundCloud will become the first music streaming service to start redistributing its subscribers’ fees only to the artists they listen to, the company has confirmed.
The Berlin-based company will start its new fan-powered royalties model from 1 April, which it says will even the playing field for independent artists.
Spotify, Deezer, Apple Music and other major music streaming platforms currently pool royalty payments and pay artists based on their share of total streams, an approach that favours the world’s biggest artists but penalises smaller acts
Many musicians have criticised the way that streaming platforms fail to generate revenue for many artists, despite exposing them to millions of listeners across the globe.
A survey of members of songwriters’ body The Ivors Academy and the Musicians’ Union published in December last year found that eight out of 10 music creators earn less than £200 a year from streaming, despite major record labels reporting streaming revenues of £3.3bn throughout 2020.
This included members with thousands, hundreds of thousands, and millions of streams, with 92 per cent saying that less than 5 per cent of their earnings came from streaming in 2019.
“Many in the industry have wanted this for years,” said Michael Weissman, SoundCloud’s chief executive officer.
“We are excited to be the ones to bring this to market to better support independent artists.
SoundCloud said an artist with 124,000 followers on its platform who previously made $120 (£83) a month under the old model would make $600 thanks to its new approach
Another artist with 12,700 followers could increase her monthly payout by 217 per cent, it added.
“Fan-powered royalties are a more equitable and transparent way for independent artists to get paid. With fan-powered royalties, each listener’s subscription or advertising revenue is distributed among the artists they actually listen to, rather than being pooled.
“This new model benefits independent artists and empowers fans to play a larger role in the success of their favourite artists. It also encourages the growth of local scenes and the rise of new genres.”
