OnlySounds? SoundCloud to launch direct payment model: reports

Since the beginning of the COVID-19 pandemic it’s been possible to tip your favorite artists on SoundCloud but the platform is working on a new system incorporating aspects of Patreon and other direct payment models, according to a report.

Citing “multiple sources close to the situation,” Micah Singleton at Billboard reports that Soundcloud is “preparing to introduce a new payment system that would allow fans to pay artists directly,” which could be “a game-changing precedent for the streaming world.”

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Singleton compares the strategy to those used by Chinese streaming services like QQ Music as well as “one that subscription services like Patreon and OnlyFans have built their businesses around.”

As we’ve argued in the past, Spotify and the “pro-rata” model of revenue distribution among artists has effectively killed the good-hearted notion of paying up to “support” your favorite artists, as there’s little chance they’ll see your financial contribution to their welfare. SoundCloud payments to artists currently use the same “pro-rata” model as Spotify and others, in which all revenues are pooled and then distributed with the most popular labels receiving the most based upon market share. Even if revenue is generated specifically on behalf of — say — your dope techno banger, the pro-rata model means you might receive little to none of it depending on your overall popularity.

A new model as described would enable listeners to contribute funds directly to artists, bypassing the pooling of funds. It’s not entirely clear but it seems likely that a new model would exist alongside (rather than replacing) the existing model as part of SoundCloud’s Repost service for artists.

Singleton reports that SoundCloud will introduce the alternative payment model before the first quarter ends.