In April 2021, SoundCloud launched the industry’s first ‘Fan Supported Royalties’ platform – its own brand of user-centric online payment model.
This monetization method sees royalties from each individual subscriber’s monthly payment distributed only to the artists they listen to.
That’s in contrast to the more typical ‘big pot’ or ‘proportional’ streaming royalty model – liked by people Spotify – where all the royalty revenue paid/generated by users by a service is centralized by a service, before being shared on the basis of artist market share across the entire platform.
It’s now been a year since SoundCloud’s fan-powered Royalties for indie artists upload/monetize their music directly through SoundCloud. And today (April 25), SoundCloud has revealed a bunch of updated statistics on the progress of its payments system.
These statistics include the fact that 135,000 won Independent artists are currently paid through Fan Supported Royalties (FPR). This marks a 30% growth in the number of registered artists monetizing their music through FPR on the platform as of March 2021.
SoundCloud also claims that, on average, independent artists are currently earning 60% more through fan-supported Royalties than they would be stuck with the traditional scale model.
As mentioned, the pro-rated model sees royalties paid to recorded music copyright owners based on their respective market share of total plays on the music streaming service.
SoundCloud claims that the system considers it “the megastar getting the most out of it”.
SoundCloud also reports that, as of March 2021, 97% Fans on SoundCloud have individually contributed more than $5 to “a single artist they love” through Fan-Supported Royalties.
Artists eligible for Fan-Supported Royalties are independent artists who earn money directly with SoundCloud, including Pro Unlimited subscribers in Senior Program, Reposted by SoundCloud Subscribers and members of Select Repost.
To celebrate the one year anniversary of the fan-supported Royalties platform, SoundCloud is launching what it calls ‘Fan Support Friday’, this coming Friday (April 29). ).
On that day, SoundCloud said that it “invited fans to stream music from their favorite indie artists throughout the day”. In return, SoundCloud commits to doubling those artists’ royalty payments – corresponding to 100% of their revenue earned that day.
SoundCloud has previously cited two independent artists as successful case studies for a fan-supported royalty system.
By moving those artists, Chevy and Vincent, to a “fan-powered” model and not using a ‘scale’, based on their play count at the time, the service estimated that money Chevy’s monthly license will increase by 217%, while Vincent’s will multiply by five, increasing from $120 to $600.
In July, influential British band Portishead released a cover of ABBA’s SOS exclusive on SoundCloud, cites a fan-supported payment model as the reason behind their decision to release exclusively on SoundCloud.
The release marks the first time the track has been made commercially available on a major streaming platform (outside of YouTubevideo currently has more than 3.5 million views).
SoundCloud say at the end of the year that the song earned 500% more under the fan-provided payment model compared to the proportional scale model.
“The model is working. Artists with genuine and loyal fan bases are being rewarded – and that’s just the first step. ”
SoundCloud
In a statement announcing the new stats, SoundCloud said: “The model is working. Artists with genuine and loyal fan bases are being rewarded – and that’s just the first step.
“Fan-supported royalties are powering the fan economy, where there is more interaction between artists and their fans; foster the creation of an integrated, innovative ecosystem to foster artist-fan relationships across multiple SoundCloud touchpoints. ”
Worldwide music business
