We have been hearing about the problems with making money from music for several years now and will probably hear about it for the next few years. However, there are startups that are doing well in this market. One of them is SoundCloud, whose business model has proven to be very effective.
SoundCloud is a German music startup founded by sound designer Alexander Ljung and artist Erik Wahlforss. Work on it began in August 2007 in Stockholm. Only later the headquarters of the company was moved to Berlin. SoundCloud was originally meant for sharing music between artists and has evolved into a social network where music is the link between artists and their fans. The SoundCloud platform was launched less than a year after conceptual work began.
The streaming service pays 55% of its revenue to artists, keeping the rest at 45%. This is the largest share that artists can get in today’s music streaming market. For example, its leader, the Swedish music streaming service Spotify, gives artists only 30% of the profits.
Artists who submit their tracks to the platform will be able to receive payments through their PayPal account. This requires that this account be linked to a Repost by SoundCloud account.
You can withdraw funds from the balance immediately if there is five dollars on it. The balance is updated at the end of each calendar month. You also need to be aware that there is a certain period for which royalty payments are delayed. This delay is 60 days.
The reason for such a long delay is that labels and record companies pay royalties to the streaming service a month or a month and a half after the placement of a particular composition, calculating according to the results of a certain period of time.
There can be several reasons why an artist did not receive royalties by the due date:
1. The Contractor has not completed tax documents in the application for payment of royalties.
2. The minimum threshold of five dollars has not been crossed.
3. The payment was sent via email to an address not associated with a PayPal account.
If an artist has not received a royalty payment in a timely manner, they may contact the streaming service’s technical support. To do this, you should use the email address associated with the user’s account. The answer will be received within a day.
There may be no payment if the author did not indicate the co-authors of the composition in the application form. You can specify them when applying. If the co-authors present their claims for co-authorship, the service may temporarily suspend payments.
It should be noted that it would take millions of streams to generate an acceptable income on SoundCloud. Only about five percent of artists can get a more or less good income from music streaming, which will become a full-fledged source of livelihood for them. And only one percent of artists can claim truly large royalties.
And I must say that a similar situation is observed on most world-class music streaming services.