SoundCloud announced its new royalty distribution system on Wednesday, an approach that will see independent artists receive revenue directly from their fans as opposed to the current system that "pools" their total listens.
The streaming platform described the move as “a more equitable and transparent way for emerging and independent artists to earn money on SoundCloud.” Currently, listener subscription and advertising revenue are pooled and split across the entire service, with artists receiving income based on their share of plays.
This model mainly benefits popular acts signed by major labels. Under SoundCloud's new system, this revenue would go directly from fans to the artists they listen to most.
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