SoundCloud and Merlin have agreed a global licensing deal on streaming royalties.
The partnership will enable Merlin’s members and their artists to participate in SoundCloud’s Fan-Powered Royalties model.
Through SoundCloud’s user-centric payout model, a share of each listener’s subscription or advertising revenue is allocated to the tracks they listen to, rather than their plays being pooled and distributed through the traditional pro-rata model.
This model allows rights-holders and artists to earn money from their fans’ listening behaviour, as well as gain insights into who those fans are and connect directly with them on SoundCloud. Fan-Powered Royalties won in the Music Consumer Innovation category at the Music Week Awards.
The agreement comes at a time of industry recognition of the need to explore new approaches to streaming remuneration.
“At SoundCloud, we’re committed to being artist-first,” said Eliah Seton, CEO of SoundCloud. “The FPR model makes streaming royalties more equitable, helps artists benefit directly from their fans, and opens the door for more meaningful fan-to-artist connection. I’m thrilled that Merlin’s extraordinary community of independent labels and distributors, and by extension their artists, will now benefit.”
"Merlin is proud to partner with SoundCloud and bring their innovative Fan-Powered Royalties payout model to our global membership,” said Jeremy Sirota, CEO of Merlin. “This partnership provides our members and their artists with new revenue opportunities, as well as empowering fans to directly support their favourite artists from across Merlin’s global membership. This collaboration will strengthen Merlin's community of independent rights-holders and provide them, and their artists, the tools to build closer relationships with fans.”
"Mad Decent was delighted to be an early adopter of the SoundCloud platform," said Jasper Goggins, president of Merlin member Mad Decent. "We're excited that SoundCloud is taking the lead in experimenting with a revenue model that many indie labels have been intrigued about for years. We’re happy to be a part of testing this new model through Merlin and we look forward to seeing the results."
Merlin, the independent's digital music licensing partner, represents a significant share of the global recorded music market share, with members including independent record labels, distributors, label services companies, and other rights-holders. The company is marking its 15th anniversary.