Soundcloud and fan-powered royalties

I just got a pretty exciting email from SoundCloud. After a decade of being a love it or hate it platform and bringing us mumble rap - they made one of the BOLDEST moves which in their own words is for once a real genuine game changer. The text was as follows:

“Today we're introducing fan-powered royalties — a fairer and more transparent way for artists to earn money on SoundCloud. Under this game-changing model, we are levelling the playing field for independent artists and allowing fans' dedicated listenership to directly support the artists they love. 

With fan-powered royalties, money made from listeners goes directly to the artists they listen to. This equitable payout model is what independent artists across the industry have been asking for, and as an artist-first platform, we're excited to be the first music company to roll it out.” 

This is awesome, and a step in the right direction that we can only hope the rest of the industry follows. One of the most controversial and unfortunate aspects of Spotify is the way the royalties are distributed. Part of your subscription is going to go to the biggest played commercial artists even if you have been playing your favourite underground artist 24/7. The payout is based on SHARE of total streams, which means the people you want to support don't really get the slice of the pie they should. Your slice. Obviously this doesn’t bother the majors that are shareholders themselves, but it sure bothers a lot of the artistic community, like me and you!

Independent artists who monetize directly with SoundCloud will get these new fan-powered royalties. These artists include Pro Unlimited subscribers in the Premier Program, Repost by SoundCloud subscribers and members of Repost Select. Hopefully we'll see the digital distributors get on top of this ASAP as well. 

This model rewards the artist directly. The user base is already pretty large - they claim to reach 175 million users a month with over 200 million songs available, so obviously the sticking point will be whether the paying subscription base grows enough to provide serious support and people head to Soundcloud rather than away. 

Bandcamp is viewed as the most artist friendly platform and everyone can learn from it, but I am not sure files really have a future. Whoever provides the best, most convenient streaming platform experience AND nails artist compensation will win the love and respect of our community, and perhaps the battle.

if you enjoyed this article please feel free to check out the other articles for artists on the site.

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