Earlier this year, protests were staged outside of Spotify offices all around the world, with artists and music lovers alike joining to demand ‘Justice At Spotify’. The protests furthered an ongoing debate regarding what some deem to be unfair overheads claimed by the service, which limits artists income.
This led to a response from various streaming outlets trying to make the modern industry more egalitarian and fairer for emerging artists. Spotify’s response was to launch a new website, Loud & Clear, which aims to provide greater transparency regarding the payments that artists receive from the streaming service.
The new site provides a public face for Spotify’s in-house data relating to streams are determined and compensated thereafter. In a statement regarding the website launch, Spotify announced: “Artists deserve clarity about the economics of music streaming. This site aims to increase transparency by sharing new data on the global streaming economy and breaking down the royalty system, the players, and the process.”
SoundCloud, however, took a much more direct approach, and it would seem, as per their recent announcement, that their updated royalty plan has resulted in huge profit increases for the artists themselves.
SoundCloud worked in collaboration with the band Portishead on the “fan-powered” royalty method, that was unveiled last March.
The plan changed from the typical pro-rata model to one that means listeners subscriptions and advertising fees go directly to the artists that a given fan listens to.
As SoundCloud revealed to Pitchfork in a statement: “The full aggregation of market-live payout data is pending over the coming months. 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.”
With Portishead bassist Geoff Barrow adding: “I didn’t expect huge amounts of people to listen to [SOS]. It was more about getting the idea out that you could stream music and it could make money…. It’s the difference between being able to order a pizza and someone actually paying the rent.”
Whether this will result in more streaming sites or artists following suit remains to be seen.