SoundCloud sees up to 500% increase in royalty payments from its new model
SoundCloud introduced the new “fan-powered” royalty model earlier this year
SoundCloud has said that artists have received up to a 500% increase in royalty payments from its new “fan-powered” royalty rate it introduced earlier this year. The new model, As SoundCloud describe it, “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.” That means, just like Spotify and other streaming platforms, a portion of your subscription fee or ad revenue will end up in the pockets of artists you have never listened to.
Those in favour of the user-centric model, rather than rates being distributed based on market share, have long argued that it would lead to fairer payouts for independent artists whose market share is small but have dedicated fans who listen regularly.
That appears to be the case, with SoundCloud profiling UK band Portishead, claiming the band’s royalty payments are up 500% since the new model was introduced in March 2021.
A SoundCloud representative said in a statement to Pitchfork that “full aggregation of market-live payout data is pending over the coming months,” as the company is still launching its system. “The model is tracking as expected and the Portishead stat is a strong confirmation of the model’s design – fan engagement is driving meaningful revenue.”
They based their comments around Portishead’s haunting cover of ABBA’s track ‘SOS’. Geoff Barrow of the band said: “I didn’t expect huge amounts of people to listen to [SOS]. It was more about getting the idea out that you could stream music and it could make money.... It’s the difference between being able to order a pizza and someone actually paying the rent.” Any revenue from the cover was redirected to charity.
