Complaints about paltry payouts from streaming services are as old as streaming itself. Thousands of artists are wondering if there’s a better way for them to be compensated. SoundCloud has an option.
They call it a user-centric system, something that was launched earlier this year. Unlike the way Spotify, Apple Music, et al calculate streaming royalties, payouts under this system looks at how much fans listen to artists “relative to all of their listening time in a given month.” Also factored in: the number of ads that they listen to and whether they have a paid subscription. SoundCloud’s cut is 45% a slice from which is used to pay out performance fees, mechanical royalties, and a few other costs.
This is in contrast to the “pool model” used by the other platforms. That works by dumping all revenue (subscription and advertising) into a single pool that’s then divided up and then paid out to the artists with the most streams. If you have X% of the streams in a given month, you get X% of the money. If you dig into this model, you’ll see that this favours superstars like Drake and The Weeknd and deprives niche artists of any revenue that might be coming their way.
In other words, when you listen to a non-superstar artist on, say, Spotify, there’s no way to make sure a piece of your subscription revenue goes to that artist. SoundCloud wants to change that by making sure the artist you’re listening to gets your money.
Portishead is one of the first big acts to try things out. They recorded this version of ABBA’s “SOS” for a movie soundtrack in 2015. This, however, is the first time it’s been available to stream.
Read more here.