When SoundCloud announced plans to launch user-centric (or in its terms, ‘fan-powered’) payouts recently, it didn’t say how the system would affect its share of revenues. Now the company has revealed that data point, in an interview with Vice.
“While SoundCloud made no mention of this publicly, they’ll take 45 percent of what an artist earns from their listeners through fan-powered royalties,” it reported, with the source being SoundCloud’s head of rights administration and strategy. That compares to the 30%-ish share for streaming services under existing pro-rata models.
As outlined in its launch materials, SoundCloud still believes that independent artists will see a boost in their payouts under the new model.
Separately, the company answered one of Music Ally’s questions about how fan-powered royalties will work side-by-side with the pro-rata model. We wondered how it will work for listeners who pay for a SoundCloud subscription and listen to both independent artists who are part of the fan-powered royalties program, and label-signed artists who are not. SoundCloud confirmed that “the same revenues are run through both parallel calculators” – so the royalties for their streams of the independent artists will be divided under the new fan-powered methodology, while the royalties for their streams of other artists will go into the wider pro-rata pool as before.
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