SoundCloud is changing the way it pays creators

SoundCloud is breaking ranks and switching to an artist-friendly payments model.

From April 1, the streaming platform will switch to what it describes as a “user-centric” system, where its royalty payments to independent artists are calculated on the number of fans streaming you, not the number of streams.

It’s a novel approach that rewards artists who build dedicated fanbases, and who stream their music frequently.

In making the change, SoundCloud becomes the first major streaming service to embrace so-called “fan powered royalties,” which the company claims is a “more equitable and transparent way” for its artist community to earn a living.

The logic is simple: The more time your fans log in and listen to your music, the more you get paid.

“This model benefits independent artists,” reads a statement issued overnight.

Based on SoundCloud’s new model, if a user paying $10 a month only listens to five artists, those five artists will get an equal split of that cash — after SoundCloud’s fee — no matter how many times the user listens to each of them, reports Billboard, which broke the news last month.

The development, announced Tuesday in the United States, will be welcomed as a step in the right direction for the wider streaming sector.

And it comes amid a chorus of complaints from artists recording artists who argue the current streaming model, operated by the likes of Spotify and Apple Music, is broken.

Writing in The Guardian, The Charlatans’ Tim Burgess called for change. “If a whole generation of musicians goes to the wall, no one wins,” he wrote.

In the U.K., parliament examined what economic impact music streaming is having on artists, record labels and “the sustainability of the wider music industry,” as part of a landmark probe into the “Economics of music streaming”. 

Read more on SoundCloud's plans here.