Audio streaming and distribution platform SoundCloud has announced ‘Fan Powered Royalties’ to help independent artists earn more money.
The traditional payment system which is also used by other music streaming services including Spotify, Apple and Deezer transfers the money earned from dedicated listeners to a big pool which is then paid to artists based on their shares of global plays, mostly benefiting mega stars rather than emerging and independent artists.
However, with SoundCloud’s new Fan Powered Royalties, the revenue generated from dedicated fans will directly go to independent artists that they listen to.
With fan-powered royalties, the money made from dedicated listeners goes directly to the artists they listen to, so it benefits rising independent artists (3/5)— SoundCloud (@SoundCloud) March 2, 2021
“Many in the industry have wanted this for years. We are excited to be the ones to bring this to market to better support independent artists,’’ said Michael Weissman, Chief Executive Officer of SoundCloud, in an official statement. “As the only direct-to-consumer music streaming platform and next generation artist services company, 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.”
On the new web page created for Fan Powered Royalties, the company gives 2 examples to better explain how the new system will benefit independent artists.
The company says that while Canadian artist Vincent who has 124k followers on the platform earns $120 per month under the old payment system, his revenue will reach $600 per month with the new system.
The company also says that Australian artist Chevy’s (13K followers) revenue will increase by 217% with Fan Powered Royalties.
The new system will roll out on April 1, 2021 and 100,000 artists will benefit from it, SoundCloud announced.