User-centric payments for artists on streaming has just received a big boost. Warner Music has become the first major to sign up to SoundCloud’s Fan-Powered Royalties system.
The streaming platform won in the Consumer Innovation category at the Music Week Awards for Fan-Powered Royalties, which pays out to artists based on individual users’ streaming habits.
Fan-Powered Royalties was previously limited within the independent and emerging artist ecosystem. But SoundCloud has now extended that with its global licensing deal with Warner Music Group.
It marks another significant digital development at the major led by Oana Ruxandra (pictured right), who recently spoke to Music Week about opportunities for music with both new and emerging platforms.
Launched in 2021, FPR is described as a “first-to-market payout model driven by fandom and built to power the fan economy”. It comes at a time of intense scrutiny into the economics of streaming, and a debate about user-centric alternatives for artists.
“Designed to maximise SoundCloud’s unique position as the only streaming service that enables and empowers artists to engage directly with fans, the model lays the foundation to give artists more control and opens up new products and fan monetisation opportunities,” said a statement. “FPR provides equitable and transparent ways for all artists, from indie darlings to international superstars, to earn money directly from their fans.”’
The new deal allows every artist across Warner Music’s roster to be paid based on fan listening behaviour on SoundCloud. Under FPR, 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 the music industry has been using for over a decade.
Deepening our relationship with SoundCloud will allow us both to proactively build for the future
Oana Ruxandra
“Today's deal is a major milestone because, under Fan-Powered Royalties, more artists get paid more money,” said Eliah Seton, president, SoundCloud (pictured left). “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.
“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. SoundCloud is known for our community of music-loving fans and this partnership aligns with our commitment to a fan-powered, artist-centric business.”
Oana Ruxandra, chief digital officer & EVP, business development, WMG, said: “The evolution of the music industry brings new ways to create, consume and monetise. As the ecosystem expands, WMG is focused on advancing and experimenting with new economic models to ensure the opportunities for our artists and their communities are maximised. SoundCloud has been an amazing partner in connecting artists and fans, deepening our relationship will allow us both to proactively build for the future.”
“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,” added Troy Carter, member, SoundCloud board of directors and founder and CEO of Venice Music. “I’m thrilled to be part of a group of dynamic leaders committed to bringing us one step closer to an artist-centric music industry.”
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