Music Streaming: a new system of remuneration for artists planned on Soundcloud

The music streaming group SoundCloud, which is preferred by independent labels and artists, announced on Tuesday, March 2, 2021 that it will change the calculation of the remuneration of artists broadcast on this streaming platform.

In order to better measure the compensation that should be paid to some of the independent artists present on its platform, the music streaming platform Soundcloud will implement on April 1st a new compensation model: “fanpowered royalties”.

While the current remuneration model is based on the volume of music listened to by all users, i.e. remuneration on a pro rata basis (market centric’system), this new model will works on the basis of each listener’s subscription (SoundCloud Premier, Repost by SoundCloud or Repost Select) or advertising revenue, distributed onely among the independent artists listened to by this publisher, i.e. on the basis of the number of listenings.

Concretely, the current remuneration model, favored by the distributors, consists in the fact that the subscription paid by the user each month is used to remunerate the most listened to artists of the platform, without necessarily relying on the precise listening of the latter. With the new remuneration model, = independents artists can be more equitably remunerated, even if they are less listened to. According to SoundCloud, this system is much more advantageous for independent artists : the new remuneration could be on average 25% higher than with the previous model.

If this change in remuneration calculation seems important for the music market, it is taking into account that music streaming represents almost half of the turnover of the global music market. However, this change in the remuneration system for artists remains reserved for artists who can claim monetization of their productions on SoundCloud, i.e. those who own 100% of the rights to the music they broadcast: cover versions, remixes or DJ sets would be excluded.

Our UGGC Law Firm and its team of Lawyers specialized in music law are at your disposal to assist you in the protection of your legal and economic interests.

By the IP/IT team of UGGC Law Firm

Source: Les Echos, No. 23402, Wednesday, March 3, 2021, page 23