Nadine Shah Spotify radiohead Nadine Shah

Warner Music Group becomes first major label to adopt fan-powered royalties system

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SoundCloud, who last year announced that it’d be the first music platform to direct the fees of its paying subscribers to the artists they stream.SoundCloud said that it was “a more equitable and transparent way for independent artists who monetise directly with SoundCloud to get paid”.It’s an approach that’s been previously backed by many musicians who have criticised the economics of online streaming.Leading streaming services such as Spotify and Apple Music currently operate on a system where royalty payments are distributed in accordance with which artists have the most plays.But it has been criticised by smaller and up-and-coming acts, who claim that the system allows huge global names to generate vast amounts of money while leaving little for musicians who have not achieved similar success.Now, it’s been confirmed that Warner Music Group has implemented SoundCloud’s royalty system.

Each artist credited with having earned royalties from a particular recording will earn a share based solely on each stream of that specific release.However, Far Out Magazine cites the results of a recent report by Media Research which found that 56 per cent of artists surveyed were making more revenue by using SoundCloud’s old pro-rata model rather than the new one.Numerous other major streaming platforms – including Spotify and Apple Music – are currently still using the pro-rota model.Upon SoundCloud introducing the fan-powered system, the company’s chief executive officer Michael Weissman said: “Many in the industry have wanted this for years.

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