The company is going to introduce an alternative model of content monetization — direct payments to authors. If a word is followed by a deed, SoundCloud will change the entire streaming niche.
In the market of streaming services, everything is complicated. They expand the audience and help musicians earn money while there are no concerts or demand for merch. But the latter are not happy with the payments. Even well-known indie authors receive no more than 20-25 thousand dollars a year and almost completely spend these funds on the preparation and recording of new compositions.
The situation is complicated and applies to almost all online platforms, including SoundCloud. However, its management is not afraid to take risks, makes difficult decisions and takes the initiative into their own hands-they are preparing to launch a new monetization system as soon as possible. According to Billboard, with its help, listeners will be able to support musicians directly.
An example with the Chinese QQ Music, where “donates” have been working for a long time, was announced in Slate last year, hinting at the potential of this model for Spotify and its analogues. But, Western platforms continued to operate in the old-fashioned way: transfer income from streaming to labels, and those-to redistribute them between musicians depending on the terms of the contract.
However, this approach raised questions even before the launch of streaming services. Over a decade of growth, audience expansion, and financial well-being, they have been unable or unwilling to present a solution and balance the situation. As a result, the stratification in the industry has become even more acute, and now this problem is being discussed at the level of government agencies.
For the past three years, SoundCloud has been operating in a similar way to other streamers: it provides listeners with access not only to the open library, but also to the Go+ service with 135 million tracks for $ 10 a month, and distributes revenue among authors depending on the number of streams of their songs. Hence the corresponding criticism, as in some cases with Spotify.
To minimize risks, the team analyzes several ways to support musicians at once and promises to report on the results by the end of the first quarter of this year. Even if it stops at “donates”, this step will most likely have to be coordinated with labels — to convince them that the level of payments will remain, and the discontent of musicians will subside.
The new monetization system can be integrated with the Repost service, which the company launched a couple of years ago. It is aimed at an audience of independent musicians and helps them work with streaming platforms like Apple Music, Spotify and the showcase of SoundCloud itself. In the latter case, there is no Commission.for other platforms, it is 20%.
Recently, SoundCloud announced a collaboration with Twitch. on February 18, the platforms will hold a Fortnite championship, in which eight selected musicians will participate. It would seem that why share your audience with another platform? But the fact is that almost half of SoundCloud users are video game enthusiasts and professional gamers who are very familiar with the capabilities of Twitch. Therefore, the collaboration does not pose a threat to the parties and the audience, and the championship is highly likely to become a regular event.
Partnerships and integrations with other platforms cannot be excluded. Today, this tactic looks promising and can give the development of SoundCloud an additional boost.