Soundcloud has announced a new system for “Fan Powered Royalties,” which will provide artists with direct payments tied to the number of streams they receive. Under most prominent streaming models, like Spotify, most revenue gets pooled together and paid out based on the performer’s share of streams. Under this model it typically benefits popular artists on a platform, such as Ed Sheeran or Taylor Swift, but does not benefit smaller groups with large followings.
This new model will be based on fan’s listening habits, the more they listen to a specific artist’s work on the platform, the more it will financially benefit the artists. These are based on fans’ overall listening times, which will be made transparent to the artists on Soundcloud.
This new system was praised by the independent group Portishead, who has been critical of streaming royalties and services such as Spotify in the past. The group’s Geoff Barrow criticized Spotify’s CEO Daniel Ek last year, after the executive suggested that music artists not getting paid enough through streaming royalties was a “narrative fallacy.” In their statement they praised Soundcloud’s new direction, stating that this user-centric system will help up-and-coming musicians outside of popular genres.
“We were pleased to hear the announcement today from our friends at Soundcloud that from April 1st 2021 they will switch to the user-centric monetisation system (unlike other streaming services). This is great news for up and coming musicians and artist working outside popular music genres,” Portishead wrote in a statement on Facebook.