SoundCloud

September 5, 2024 All About Music Stores Partners

Here’s an expanded breakdown of how SoundCloud supports artists, their payout system, and other relevant details:

Services for Artists:

SoundCloud provides various services through its SoundCloud for Artists program. This includes tools for music distribution and monetization across major streaming platforms like Spotify, Apple Music, and others. Key offerings include:

  1. Monetization through Fan-powered Royalties (FPR): Instead of pooling all the revenue from streams, SoundCloud distributes royalties based on the actual engagement of fans with an artist’s music. This fan-centric model benefits smaller, independent artists with a loyal following. The more dedicated the listeners, the more the artist earns​(SoundCloud Help).
  2. Direct-to-fan support: SoundCloud offers services like Next Pro and Next Plus, giving artists access to features like advanced audience insights, promotional tools, and the ability to upload more music​.
  3. Music Distribution: Artists can distribute their music to various streaming platforms and have full control over their content with the ability to update tracks, manage playlists, and access audience data.

Payout System & Royalties:

SoundCloud’s Fan-powered Royalties (FPR) model ensures that royalties are distributed based on how much each fan listens to an artist’s music. This contrasts with the traditional model, where all revenue is pooled and distributed by total streams (which favors larger artists). Here’s how it works:

  1. Listener engagement: Artists are paid based on the total number of streams from listeners, with more focus on dedicated fans. This model allows smaller artists with fewer but more engaged fans to earn higher payouts​(SoundCloud Help)​(SoundCloud Playbook).
  2. Subscription & Ad Revenue: The more time a fan spends listening to an artist’s music, and the number of ads consumed during this period, directly impacts the artist’s revenue. If a listener subscribes to SoundCloud Go+, artists may receive more revenue since subscription fees are included in the payout calculation​.

Pay Rate (How Much SoundCloud Pays You):

SoundCloud’s pay rate per stream is generally between $0.0025 and $0.004, meaning artists can earn $2.50 to $4 per 1,000 plays. The rate can vary based on the listener’s location and whether they are a paid subscriber (which leads to higher payouts) or free users consuming ads​.

The revenue distribution is structured as a 55% share to the artist, while SoundCloud retains the remaining percentage. Artists can also maximize their revenue by releasing more content and promoting it on the platform​.

Go Live Time:

Once an artist uploads their music, it takes a few days (2 – 3) for the track to be approved and go live. During this period, SoundCloud reviews the content to ensure it complies with platform guidelines. After the approval process, the music becomes available to fans on SoundCloud and other platforms if distributed through SoundCloud for Artists​

(SoundCloud Help).

How SoundCloud Sells Your Music:

SoundCloud provides artists with tools to sell and promote their music by distributing it across various platforms, including Spotify, Apple Music, and other major streaming services. Artists have access to analytics, promotional tools, and detailed reports on fan interactions to help them engage better and promote their work​.

  1. Direct engagement: Artists can promote their tracks on social media, use analytics to better understand their audience, and receive feedback through comments and reposts, driving more traffic and increasing visibility on the platform.
  2. Monetization via Ads: Free users on SoundCloud encounter ads before streaming music, which adds to the artist’s revenue stream. Artists participating in the monetization program benefit from ad revenue in addition to subscription income​.

SoundCloud Territories (Where Music Sells):

Music sold and streamed on SoundCloud is available in a range of territories, though earnings can vary based on regional economic conditions, advertising revenue, and subscription prices. Countries with higher premium subscriptions and ad revenues tend to offer higher payouts to artists. SoundCloud has agreements with major music labels and rights holders across different territories, further impacting the per-stream payout based on location​.

Warnings & Restrictions:

SoundCloud has a strict policy against artificial streaming, which includes bot-generated streams, click farms, or any attempt to manipulate streaming numbers. Artists found guilty of engaging in fraudulent streaming practices risk having their content removed and losing revenue. SoundCloud also cooperates with other platforms like Spotify to detect fraudulent activity, and artists may face penalties or the removal of their entire catalog if violations are detected​

(SoundCloud Help).

  1. Tax Compliance: For artists outside the U.S., SoundCloud withholds taxes in compliance with U.S. tax laws. The platform advises artists to complete tax forms to ensure proper payouts.

SoundCloud provides a robust ecosystem for artists, from monetization through fan-powered royalties to comprehensive music distribution services. It offers a fairer payout system for emerging and independent musicians while keeping a focus on organic growth and audience engagement. However, artists need to be cautious about fraudulent streaming practices, as SoundCloud is vigilant about maintaining the integrity of its platform.