The old ‘pro rata’ system is replaced with one that pays royalties based on fans’ listening time.
SoundCloud has announced it’s introducing user-centric royalties for the artists who share their music on the platform.
Previously, Soundcloud was like Spotify and other streaming companies, where a portion of someone’s subscription fee is divided out amongst all the artists on the website, so users could be paying money to artists they have never even heard of, let alone listened to.
In the words of the company: “Under the old model, money from your dedicated fans goes into a giant pool that’s paid out to artists based on their share of total streams.
“With this move, each listener’s subscription or advertising revenue is distributed among the artists they listen to, rather than their plays being pooled – benefiting rising independent artists with loyal fans.”
This is great news for independent record labels, plus underground artists who have a loyal base of fans, but don’t get the streaming numbers of the megastar artists like Ed Sheeran or Beyoncé, who under the old system would be taking a big slice of SoundCloud’s overall royalties.
Soundcloud has given some real-world examples of how the new royalty system benefits people. In it, they explain that Vincent, with 124,000 followers, had made $120 a month, but with the new system would now makes $600 in the same time period. The same examples show how some people’s royalties could rise by 217%, if not way more.
The new royalty system will come into effect on the 1st of April, and you can find out more HERE
H/T: DJ Mag