SoundCloud have today unveiled a new ‘fan-powered’ royalty distribution model that aims to pay the money of its users directly into the pockets of the independent artists they choose to support. Whereas big streamers, such as Apple Music, Spotify and Deezer,  pool all of the money and divide it across their platform, the new SoundCloud program aims to pay the artists that a subscriber streamed, and nobody else.

Under the new Soundcloud ‘fan-powered’ system, which goes into effect on April 1, money from a listener’s subscription as well as advertising revenue will go directly to the artists they listen to “rather than their plays being pooled,” according to a press release. This is a move that has been welcomed by musicians campaigning for fairer pay.

It is believed that the major record labels have resisted such a move, in part because the current system allows them to generate massive profits through a relatively small number of huge stars. For example, according to an article in The Express Tribune, a study by France’s Centre National de la Musique earlier this year found that 10 percent of all revenues from Spotify and Deezer go to just 10 top artists.

That has allowed the major labels to accrue record revenues over the past year, despite most musicians being thrown into crisis by the cancellation of live tours due to the COVID-19 pandemic.

Michael Weissman, SoundCloud CEO, said in a statement: “Many in the industry have wanted this for years. 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.

Do you agree that this is a fairer practice – particularly for the independent music producers – and that the other streaming services should follow? Why do you feel so? Please leave your comments below.