SoundCloud, the digital audio distribution platform based in Berlin, is to become the first service of its kind to switch to a user-centric royalty model for 100,000 of its indie artists.
Under this system, the amounts paid to artists are closely linked to the number of streams their songs have amassed. It differs radically to the incumbent pro-rata model where all streaming income is gather into a central pool before being shared out according to market share.
The initiative has been launched under the name “Fan Powered Royalties”, and SoundCloud has published a new microsite that gives examples of the difference this change can make for rising artists.
While the reach of this initiative will be limited at first, it will provide the entire industry with invaluable insight into the effect such a dramatic change has on income, royalty distribution and equality.
(This article was written for and originally published at Fair Trade Music International.)