SoundCloud announced Tuesday it would become the first streaming service to link subscriber payments directly to the independent artists they support, a move welcomed by musicians campaigning for fairer pay- SoundCloud to be first music app with artist payments.
Streaming services like Spotify, Deezer and Apple put royalty payments into one big pot and dish them out based on which artists have the most global plays.
Many artists and unions argue this system is grossly unfair, giving a huge slice of the pie to mega-stars like Drake and Ariana Grande while leaving almost nothing for lesser-known musicians.
From April 1, SoundCloud will start using a new system in which the royalties taken from each individual subscriber will only go to artists they stream.
However, this will only apply for the roughly 100,000 independent artists who monetize directly through the site. Musicians licensed from major labels will continue to be paid via the traditional pooled method.
How Will It Affect The Music Industry?
SoundCloud said the new payment system — known as “fan-powered royalties” or a “user-centric model” — would empower listeners and encourage greater diversity in musical styles.
“Artists are now better equipped to grow their careers by forging deeper connections with their most dedicated fans,” the statement said. “Fans can directly influence how their favorite artists are paid.”
SoundCloud said its positive data may be linked to the particular nature of its users, who tend to be “younger and much more active”.