From April 1st, SoundCloud will be rolling out a new “fan-powered” royalty distribution system with the goal to increase equity in streaming revenue. Currently, streaming royalties from dedicated fans go into a giant pool that’s paid out to artists based on their share of total streams. As illustrated below, this model model mostly benefits the biggest names in music.
Rather than being pooled, SoundCloud’s new system will mean artists get paid based on their dedicated fans’ actual listening habits. The more that fans listen to an artist’s music on SoundCloud, the more they will get paid – illustrated below:
In a statement, SoundCloud’s CEO Michael Weissman explained: “many in the industry have wanted this for years. We are excited to be the ones to bring this to market to better support independent artists. SoundCloud is uniquely positioned to offer this transformative new model due to the powerful connection between artists and fans that takes place on our platform. As the only direct-to-consumer music streaming platform and next generation artist services company, the launch of fan-powered royalties represents a significant move in SoundCloud’s strategic direction to elevate, grow and create new opportunities directly with independent artists.”
