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5 Things to Know About SoundCloud’s New Fan-Powered Royalties

Digital mixer to highlight fan-powered royalties

In an industry first, SoundCloud is introducing fan-powered royalties. The new royalties system will benefit independent artists by allowing fans to play a bigger role in an artist’s success.

Under SoundCloud’s existing system, fans’ money goes into a giant pool. Royalties are based on an artist’s share of total streams. That model mostly benefits mega stars. Fan-powered royalties level the playing field for independent artists by tying payouts to fandom.

Significant Move

“Many in the industry have wanted this for years,” said SoundCloud CEO Michael Weissman. “We are excited to be the ones to bring this to market to better support independent artists. 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.”

Artist recording music in studio

Here are 5 things to know…

  • Through fan-powered royalties, independent artists who monetize directly with SoundCloud will be paid more equitably. Fans’ listening habits will translate into how much artists receive. The more time fans listen to an artist’s music, the more the artist is paid.
  • Independent artists who monetize directly with SoundCloud are eligible for fan-powered royalties. These artists include Pro Unlimited subscribers in the Premier Program, Repost by SoundCloud subscribers and members of Repost Select.
  • Fan-powered royalties come into effect on 1st April. Premier artists will receive their first statement in May 2021 in line with Premier’s 45-day payment cycle. Repost artists will receive their first statement in June 2021 in line with Repost’s 60-day payment cycle.
  • Listeners’ subscription or advertising revenue will be distributed between artists they actually listen to, rather than pooled. This new model benefits independent artists and empowers fans to play a larger role in the success of their favourite artists.
  • The portion of a fan’s time spent on each artist will determine the royalties. The amount of money generated by a fan for the artists they listen to is based on a three factors. i) How much the fan listens to a particular artist relative to all of their listening time in a given month. ii) How many advertisements the fan consumes. iii) Whether the fan has a paying subscription to SoundCloud Go+.

Photos: freepik

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