Soundcloud tries something new for a major music streaming service: paying indie artists a share of their actual listeners’ subscription fees. The company names this as “fan-powered royalties” which means SoundCloud subscriber’s subscription fee or advertising revenue will be divvied up among the artists they actually listen to.
This is a major change for the industry and one indie artists have been pushing for. Presently, most streaming platforms reward the world’s biggest stars with the most royalties. For example, Spotify figures out how many streams happened on its platform in a specific country and then calculates which portion of those streams went to a specific artist. This results in smaller artists not being able to make much money because they represent a smaller portion of overall streams despite having a dedicated, loyal audience.
Soundcloud disclosed that its new system will change that. It cites one musician who has 124,000 followers who made $120 a month with the old model, but with fan-powered royalties makes $600.
How SoundCloud will balance the royalties or how it will divvy up a listener’s revenue still remains to be seen. If it becomes successful, artists could advocate for more platforms to take on this model.
