It wasn’t too long ago that we were talking about the future of Soundcloud when they signed a deal with Universal Music Group. This news came on the heels of contracts drawn with Warner Music Group and Merlin. Since then, Soundcloud launched Soundcloud Go, its paid premium service in March of this year that offers listening ad-free, offline listening in addition to access to an expanded catalogue. It also moved on from its Related Tracks offering to Stations, which provides a stream of new music to discover related to tracks you favorite, search term you use, content stream, or music in your Collection. Earlier this year Soundcloud received a boost from Twitter, who invested $70 million into the company after walking away from the table to buy it and now Spotify has its eyes on Soundcloud.
Like many of you I have questions on how Spotify buying Soundcloud will impact my user experience. I also want to know how it will change what I consume and if artists who have had accounts wiped out from copyright infringement claims will be able to be in a place where they can feel good about sharing content. A few questions definitely come to mind. One question that arises is if rights owners and artists will see a comparable amount or an increase in royalties.
Spotify details how it generates revenue and how it pays out royalties to artists on it’s Spotify Explained page. The more users join Spotify in the free tier and paid, premium tier, the more revenue that can be generated for all involved. In sum, royalties are paid out as follows:
Soundcloud is a platform that has given artists big and small a great platform for exposure (Soundcloud has a lot of great built in sharing options). It is also a medium for socializing with fans, allowing fans to comment and artists to converse with them. Soundcloud currently offers three account tiers: free, pro (includes pro and pro unlimited), and premium. A free account allows you to grow your fanbase, but you cannot make money from this account tier. You can’t make money if you decide to pay for a pro or pro unlimited account either. It does provide extra storage, greater access to statistics, and more hours of upload (The Pro account allows you to upload up to 6 hours and Pro Unlimited allows you to do an unlimited amount of uploads). It is not until you have a Premiere account that you can share in the revenue from ads and monetize your work.
Artists may find themselves with greater payouts under Spotify as Spotify might allow for artists to cut out the middleman (labels and their distributors). Currently, you can be a Premiere Partner with Soundcloud even if you are not working with a label and distributor, but not everyone is eligible (it’s invite only). Premiere Partners also share in the revenue generated from Soundcloud Go subscriptions, so the two companies’ subscription models could fit in well together. You can rely on The Department of Dance to monitor this potential acquisition. It remains to be seen who will come out standing tall with competition coming from Apple and Amazon. Stay tuned to this space for more as the situation develops.
I was listening to electronic dance music without even knowing it when I was listening to Jock Jams in the 90s. Fast forward to my senior year in high school and I had discovered Fatboy Slim. I have been listening to edm ever since and love writing about new sounds, good sounds, and the music that makes us move.
