Warner Music Group to use SoundCloud royalty system

Warner Music Group will use SoundCloud’s fan-powered royalties system. As a result, income for Warner Music Group artists on the streaming platform is no longer distributed proportionally, but based on listening figures per artist.

The US music distributor is the first major label on SoundCloud to use the fan-powered royalities system where royalties are no longer allocated proportionally to musicians, but on the basis of absolute listening figures and listening behaviour.

Previously, Warner Music Group operated a royalty system in which all subscription and advertising revenues were collected in a pool and then redistributed proportionally among the artists. Artists who were listened to the most were also paid their royalties according to the same ratio. This arrangement is the standard in the music industry and ensures according to SoundCloud that smaller artists, in relation to their more famous colleagues, earn a lot less royalties, even if they get a lot of listening figures. SoundCloud introduced the Fan-Powered royalties system in 2021.

SoundCloud Fan-Powered Royalties System