(Hypebot) – In an attempt to throw their hat in the already rather full on-demand streaming ring, SoundCloud has launched the service SoundCloud Go and, although the service has interesting potential, there remain several unanswered questions regarding things like how artists will get paid, or how royalties are being calculated.
Guest Post by Nicole Daley, Policy Intern at the Future Of Music Coalition
Last week, SoundCloud launched their new paid subscription service—yes, another on-demand streaming site. SoundCloud Go, as they’ve named it, promises many things such as a larger catalogue and maintaining the user-friendly interface they’re popular for, but when it comes to the details of artist compensation, it leaves much to the imagination. In other words they’ve decided not to disclose much information or have not yet figured everything out yet.
This is the latest step in SoundCloud’s move from an unlicensed service to a licensed service, and a corresponding shift in Soundcloud’s business model. Over time, deals have been struck with sound recording owners, as well as with the National Music Publishers Association (NMPA). After reviewing SoundCloud’s blog announcement and reviewing their website, there are still some big questions. Most importantly: How is SoundCloud actually paying artists? Well, that depends on whether you’re one of the artists already set up to be paid. Prior to the launch of this service, only “premier partners” earned revenue from sound recordings on SoundCloud; becoming a premier partner is invite only. Current Premier Partners include: Universal Music Group, Sony Music Entertainment, Warner Music Group,Merlin, digital aggregators and distributors like InGrooves, The Orchard, Maker Studios, Studio71,Empire and others.
But that was the system in place before SoundCloud opened up the revenue stream of paid subscriptions from listeners, which leads to the next question: will the new streaming platform open the door for all recording artists, songwriters and rightsholders on SoundCloud to get paid?
As far as we can tell, the answer is no, or at least, not at the moment. Currently, the royalties are dispersed to premier partner rightsholders as follows:
If you’re signed to a label and/or publisher, or if you distribute your content through a distributor or aggregator, the revenue that you earn on SoundCloud will be distributed by your label/publisher/distributor and will appear in your regular royalty statements.
A label, publisher, etc. would itself have to be an On SoundCloud premier partner in order for it to be able to earn and distribute revenue to its artists.
If you’re not signed to a label or publisher and distribute your tracks yourself, then you’ll receive your revenue share payments directly from SoundCloud
That last bullet point suggests that a direct payment system for self-distributed music creators is in development. But the moment it seems SoundCloud has not unveiled mechanisms to compensate non-premier partners whose music also appear within their paid subscription offering. As the site says: “All creators have the ability to make their tracks available for offline listening, but only Premier Partners (which is by invitation only) share in revenue generated by SoundCloud.”