Fresh from inking partnerships with Tidal and Deezer to explore new ‘artist-centric’ streaming payout models, Universal Music Group is reportedly in talks with SoundCloud too.
Bloomberg reported the talks, saying that the companies are “discussing changes to the standard industry royalty structure” and would “like to reach a conclusion before the end of the year”. Neither commented officially on the report though.
One key question is what this would mean for SoundCloud’s existing ‘fan-powered royalties’ system.
Launched in March 2021, it enabled artists who uploaded directly to its service to be paid on a ‘user-centric’ basis, where the royalties from each user are only divided between the music they actually listen to.
135,000 artists signed up for it by April 2022, while Warner Music Group and Merlin have also opted in to the system.
When Tidal struck its artist-centric deal with UMG, it included shelving that streaming service’s existing experiments around user-centric payouts – a model UMG is not backing.
SoundCloud’s community may be hoping any deal with the major label will not see its ‘fan-powered’ system follow suit.
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