SoundCloud introduced an innovation that experts in this market have long predicted. Now royalty payments to the authors will be based on the rating of musicians and singers. At the same time, the management of the music streaming service as a whole criticized the business model of streaming music as inefficient and leading to an uneven and unfair distribution of royalties.
From April 1, 2021, SoundCloud will begin to send fees that are received by paid subscribers only to those artists who are currently broadcasting. Also, subscribers will evaluate musical compositions. These estimates will be taken into account when compiling the ratings.
It should be said that many representatives of streaming music content have long wanted such innovations and initiated them themselves. In their opinion, this will help support independent artists and give development to novice representatives of the music industry.
The world’s leading streaming services, such as Spotify and Apple Music, today operate on a system in which royalties are distributed according to which artists have the most musical compositions on the service.
The new business model, which involves the direct material support of artists by their fans, met fierce resistance from the owners and top managers of large record labels.