SoundCloud Will Now Pay Streaming Royalties Directly to Indie Artists

SoundCloud CEO Michael Weissman released a statement on the new changes.

On Tuesday, SoundCloud announced a new "fan-powered" royalty system designed to directly benefit independent artists. The new model will ensure that the money made from dedicated listeners will go directly to the artists they listen to, as opposed to the current industry standard.

As of now, artists receive a portion of subscriber and ad income from streaming services. The amount of money received reflects the percent of streams they earned across the entire platform. This model overwhelmingly benefits artists who already have massive followings.

The new model monetizes streams from artists who use SoundCloud's Premier, Repost, and Repost Select programs. If a fan spends an entire month listening to an artist, that artist would receive the entire amount of streaming revenue after the company's cut from fees and ad revenue.

"Many in the industry have wanted this for years," SoundCloud CEO Michael Weissman said in a statement. "We are excited to be the ones to bring this to market to better support independent artists. SoundCloud is uniquely positioned to offer this transformative new model due to the powerful connection between artists and fans that takes place on our platform. As the only direct-to-consumer music streaming platform and next generation artist services company, the launch of fan-powered royalties represents a significant move in SoundCloud’s strategic direction to elevate, grow and create new opportunities directly with independent artists."

The new royalty system goes into effect on April 1. Stay tuned for further updates on SoundCloud's new royalty model.