Soundcloud announced it would become the first-ever streaming service to adopt the fan-powered payment method.
The method would allow users to make payment directly into the wallet of the artist.
The announcement was made on Tuesday after musicians campaigned for a fair payment system for artists.
Over the years, artists and organisations had complained.
They argued that most of the funds were going to the major label artists on streaming platforms, while unknown artists had little or no funds.
According to research by France’s National Music Centre, it was discovered that 10% of revenue on Spotify and Deever goes to 10 artists at the very top; meaning each of them took 1%.
Hence, the adoption of a fan-powered system, also known as a user-centric system.
Soundcloud said the payment system would allow subscribers link directly to the independent artist account they support, in which they get paid by their dedicated fans.
Simplifying the idea, RAC, musician and producer said in a post that;
“It’s such a simple idea. Your monthly fees get split up between the songs you actually listen to.”
However, Soundcloud would start using the system from the 1st of April; it would be for about 100,000 artists who had been monetising the platform earlier.
Although, artists who have been licensed from major labels would continue to pay through the traditional.
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Streaming sites like Spotify, Youtube Music, Deezer, Apple, and many others, still use the older payment system.
The users on the platforms pay into a general purse, and resources are distributed among the artists.
What would Fan-powered royalties mean for Soundcloud?
Using the fan-powered payout system would mean different things for Soundcloud.
As a result of the payment system, independent artists would need to work harder for their money and compete on a Plainfield with one another.
Also, it would create a transparent system in which the artists would be able to view their fans’ overall listening time through an insight board, as it determines the amount they would earn.
It forges a form of connection between the fan and the artiste; and helps to know who is a real fan or not.
Soundcloud said Artists would be able to take control of their career through the new payment system, while fans would play a bigger role in its success.
Another platform considering to adopt the fan-powered royalties asides from Soundcloud is Deezer.
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