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· Posted on
February 21, 2024

SoundCloud's turning the music streaming biz model on its head and Warner Music wants in!

SoundCloud's always been huge for independent musicians... but now it has a new 'fan-powered royalties' model.

What's the key learning?

  • SoundCloud has grown to become one of the world's biggest music streaming services where anyone can upload music
  • The platform started out offering the new 'fan-powered royalties' model exclusively to independent artists, but now it's made a deal with Warner Music Group to loop in their artists
  • Artists on SoundCloud will now get paid directly according to how their fans listen

👉 Background: SoundCloud got started back in the LimeWire days of 2007. While LimeWire went down, SoundCloud has grown to become one of the world’s biggest music streaming services.

👉 What happened: Its main point of difference is that anyone can upload music. Yep, your mate trying to become a rapper is probably on there. SoundCloud has also been huge for independent musicians... and now it's taking things a step further with a new 'fan-powered royalties' model.

👉 What else: The platform started out offering this new model exclusively to independent artists, but now it has made a deal with Warner Music Group to loop in their artists too!

What's the key learning?

💡The business model of the music streaming industry was due for a shake up and SoundCloud is bringing the heat. This new fan-powered royalties model has turned the traditional streaming revenue method on its head.

💡Spotify has copped tonnes of criticism over the years for paying artists an average of only $0.007 cents per stream. And all the money from all the streams gets pooled together, then paid out based on each artists' proportion of total streams.

💡Now artists on Soundcloud (like your rappin' mate) will get paid directly according to how their fans listen. It’s meant to be more fair and transparent, and it looks like this new model will benefit all kinds of artists on SoundCloud.

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