SoundCloud have revealed that UK band Portishead have earned 500% more from royalties under a new ‘fan-powered’ model for their track ‘SOS’.
The new streaming model, which began in April, involves a new ‘user-centric’ system in which artists are paid based on their fans’ actual listening habits, rather than rates being distributed out based on market share.
On a site set up by SoundCloud to explain the concept, the streaming service outline how under the previous system, still used by most major platforms, ‘money from your dedicated fans goes into a giant pool that’s paid out to artists based on their share of total streams. That model mostly benefits mega stars.’
The new ‘fan-powered’ model, however, is designed to ‘level the playing field so independent artists can compete.’
As an example, the platform highlights how singer-songwriter Chevy would earn 217% more under the new model, while Canadian producer Vincent would earn $600 as opposed to $120 – increases which have now been surpassed by Portishead’s new single, SoundCloud have announced.
Such news comes amidst growing debate around the issue of reasonable pay for artists from streaming platforms, which can sometimes see artists paid as little as £0.004 per stream, on average.
In 2020, streaming accounted for 80% of music consumption according to BPI, the association which represents the UK’s recorded music industry.
In response to the challenges faced by smaller, independent artists, an online campaign #BrokenRecords was set up to lobby the government and implement change in the sector.
The campaign has so far led to a government inquiry into whether larger platforms such as Spotify and Apple Music are distributing revenue fairly.
Why the music industry HAS to change and why it has to change now. A thread. Stick with it!
— Tom Gray 🌹 (@MrTomGray) April 12, 2020
A survey of 2,069 British adults put out by the campaign last year found that whilst 77% of people believe artists are not paid enough and 76% of people think songwriters are underpaid, just over 53% of the respondents say they pay for a music streaming subscription.
Accordingly, a significant percentage of listeners (24% of respondents) believe artists are underpaid but are not willing to pay for a subscription service.
There is some hope, however, that this new model being used by SoundCloud will offer a more equal opportunity for artists to make revenue from users’ streaming.
In a statement to Pitchfork, the company responded to the new data by saying: ‘The model is tracking as expected and the Portishead stat is a strong confirmation of the model’s design – fan engagement is driving meaningful revenue.’
Will Page, the former Chief Economist at Spotify, along with the Association of Independent Music (AIM) and others, however, have warned the new system could lead to increased ‘administrative and operational costs due to increasing complexities.’
