Warner Music joins SoundCloud’s user-generated royalties experiment
Warner Music Group (WMG) has become the first major label group to sign on to SoundCloud’s ‘Fan-Powered’ user-centric royalty payment system.
This new deal allows every artist on WMG’s roster to be paid based on fan listening behavior on SoundCloud.
User-centric royalties are paid based on fan listening behavior. With SoundCloud’s Fan Powered Royalties, each fan’s subscription or advertising revenue is distributed among the artists they listen to, rather than being pooled under the traditional pro-rata model used by Spotify and most other music streamers.
TIDAL and Deezer have also experimented with user-generated royalties.
Analysts have been unable to agree on whether user-centric royalties would ultimately benefit established or emerging artists. So WMG signing on to Soundcloud’s Fan Powered Royalties could eventually provide some important answers.
“Today’s deal is a major milestone because, under Fan-Powered Royalties, more artists get paid more money. But even more importantly, Fan-Powered paves the way for artists to create even more opportunities to monetize their art beyond streaming and create more value, driven by engagement with their fans,” said Eliah Seton, President, SoundCloud. “Warner Music Group is known for developing some of today’s biggest superstars and helping them build long-term careers by investing in technologies and models which grow and support their fan communities. This makes them an ideal partner for SoundCloud and we’re excited to bring our game-changing fan-driven product to their incredible roster of artists.”
“This first-of-its-kind deal will create opportunities for artists across all genres, from emerging to superstars, to own the engagement with their fans for the first time,” said Troy Carter, Member of SoundCloud Board of Directors and founder and CEO of Venice Music.
Bruce Houghton is Founder and Editor of Hypebot and MusicThinkTank and serves as a Senior Advisor to Bandsintown which acquired both publications in 2019. He is the Founder and President of the Skyline Artists Agency and a professor for the Berklee College Of Music.
