soundcloud payouts

The guiding principle of user-centric royalties is that the winners don’t take it all; that the money, money, money is shared out more fairly; that the name of the game is to pay more to artists as a thank you for the music that their keenest fans have stre…

Okay, enough Abba puns. But Portishead have released a cover of ‘SOS’ to test out SoundCloud’s user-centric ‘fan-powered royalties’, so we couldn’t help ourselves. The track was recorded for the soundtrack of a film in 2015, but this is the first time it’s been made available to stream anywhere. British mental health charity Mind will be getting a slice of the revenues too.

Royalties for the track will be paid out using SoundCloud’s new user-centric system, which launched earlier this year. The system calculates royalties by how much fans listen to artists “relative to all of their listening time in a given month” as well as how many ads they consume, and whether they have a paid subscription.

SoundCloud takes a 45% cut, but as the company explained in March, it pays mechanical and performance publishing royalties out of that, as well as other costs. Portishead are one of the biggest artists to test out the system so far, which may in itself provide some useful data on what happens within a user-centric system if a big name drops a track exclusively on a streaming service.

Talking of the data: SoundCloud has yet to publish any details about the impact that fan-powered royalties are having, which isn’t surprising so early in its rollout.

But rival streaming services, artists and their managers, labels and everyone else in the industry will be hoping that the company is as open as possible a few months down the line, amid continuing debate over whether user-centric should be seen as a gimme, gimme, gimme (sorry, so sorry!) for DSPs in the wider search for as fair a streaming royalties system as possible.

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