Warner Music Group has agreed to implement SoundCloud’s Fan-Powered Royalties system, which distributes royalties based on individual user listening and is regarded to be more artist-friendly. WMG is the first big label to adopt the approach, and its acceptance may herald a larger movement in the industry.
Last year, SoundCloud made headlines by introducing a new compensation model in which money paid by subscribers is allocated to artists they really listen to. That may sound obvious, yet it is far from the industry norm. The pro rata model, adopted by industry heavyweights such as Spotify and Apple Music, pools all subscriber money and divides it based on total platform streams.
