Image Credit: SoundCloud
Music sharing platform SoundCloud are reportedly exploring a fan-to-artist direct payment system, to be implemented within the next couple of months.
Reported by Billboard, SoundCloud may announce a user-centric payment system before the end of March. According to “multiple sources” close to the streaming company, SoundCloud are looking into “several alternative streaming payout models” allowing fans to pay artists directly, with plans to be announced before the end of 2021’s first quarter.
Much like most of the competition, SoundCloud give users three basic listening options. Free users can listen to a limited amount of ad-supported, online-only music on the platform. A SoundCloud Go subscription gives listeners access to unlimited ad-free tracks and offline listening for $4.99 per month. SoundCloud Go+ offers the same advantages, plus access to full catalogues and high quality audio for $9.99 per month. However, these dollars aren’t distributed among the artists you personally listen to.
Currently, most streaming platforms including SoundCloud, Spotify and Apple Music operate on a pro-rata model. These models pool all subscriber and ad-revenues, then dole out earnings to artists based on total number of streams over the past month. Pro-rate streaming models have often been criticized for benefitting major labels, while leaving smaller artists with pennies.
The alternative models are said to be similar to those implemented by Tencent’s QQ Music and non-streaming platforms such as Patreon and OnlyFans. User-centric models allows fans to funnel subcription revenue to the artists they actually listen to. In 2019, Deezer announced plans to test a user-centric payment system (UCPS) on their streaming platform.
Image Credit: Deezer
These potential changes come as the CEOs of the UK divisions of Sony Music, Warner Music and Universal Music dodge MP questions on the economics of music streaming. These major labels insisted that pro-rata models are not weighed in favour of major labels, as Parliament discussed the potential benefits of a user-centric payment model.
SoundCloud may also introduce some form of a tipping options. In April last year, Spotify introduced the option to add a custom fundraising button to your artist page. As gigs around the world were cancelled last year, this allowed artists to share links to personal or charity donation boxes.
These changes will be the first move from the company since Michael Weissman took over as CEO, after the departure of Kerry Trainor earlier this year. SoundCloud are yet to make any official statement and have declined to comment to Billboard on the situation.