SoundCloud's user-centric business model is adopted by Warner Music

SoundCloud’s user-centric business model is adopted by Warner Music

The pro rata method has contributed to a distribution structure that is exceedingly top-heavy. According to Rolling Stone, the top one percent of musicians receive 90 percent of streaming revenue. That usually advantages the major labels, so it’s unclear how SoundCloud’s user-centric structure will benefit Warner. Aside from its megastars such as Dua Lipa and Ed Sheeran, it has a stable of B-listers as well as its own creator distribution network, Level.

SoundCloud has clearly benefited from the Fan-Powered Royalties arrangement. SoundCloud’s premium creator services, which start at $30 per year and go up to $144 per year, witnessed a 30 percent increase in subscriptions within a year of its launch last April.