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Soundcloud Announces ‘Fan-Powered Friday,’ Shares Stunning Payout Data

Soundcloud royalties

In a time when everyone is arguing over streaming royalties, Soundcloud offers a forward-thinking solution that fans and artists love.

The problem with music is not the access that streaming allows but the deals made by those controlling streaming to minimize what they pay artists. For example, you give Spotify $10 a month to stream as much music as possible. Spotify, in turn, takes that $10 and takes a cut for themselves before dividing the remaining money between every artist you stream, right?

Wrong.

Calculating streaming royalties is no easy feat. Each platform has a specific formula, and no two systems are alike. Spotify may pay $0.004 per stream one day but $0.006 another, and there is no way to know which day has what rate until they’re already underway.

But Soundcloud has a different approach. Starting in 2021, Soundcloud began using a fan-powered method for calculating music streaming royalties. Whenever someone pays Soundcloud for streaming, that money is divided among the artists that person listens to during their subscription period. In other words, if you give Soundcloud $10 a month and only listen to two artists, each artist gets half of your total subscription.

To celebrate one year of their fan-powered platform, SoundCloud is launching ‘Fan-Powered Friday – a one-day event on Friday, April 29th that invites fans to stream music from their favorite independent artists all day long, and SoundCloud will double the artist’s payout — matching 100% of the revenue earned that day. 

Think about that for a second. Soundcloud will match every cent earned by artists on its platform this Friday, April 29. Such an undertaking would be crazy for any label to attempt, let alone a streaming service boasting thousands of artists. Nothing like this has been attempted at such scale previously, except for Bandcamp Fridays, and even that isn’t a far comparison.

In addition to announcing Fan-Powered Friday, Soundcloud shared several data insights from the first year of their new royalties system:

  • On average, independent artists earn 60% more through Fan-Powered Royalties v. the traditional pro-rata model 
  • Communities are feeling the love from fans: artists from scenes like Tribal House and Neo-Soul, and the collective Soulection, earned 2X more 
  • Fans are making an impact by supporting the artists they love: there was a 97% increase in fans contributing more than $5 to a single artist 
  • Fan-Powered Royalties contributed to the growth of the number of independent artists monetizing on SoundCloud by 30% (March 2021-present)

What remains to be seen is whether or not another streaming service will follow Soundcloud’s lead and offer fan-powered royalties. Send us a tweet and let us know your thoughts.

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How The Pocket Gods Fought Streaming Royalties And Won [Video]

A clever marketing decision from UK rock band The Pocket Gods has launched the group into the global music spotlight and brought much-needed attention to concerns over streaming royalties.

Spotify finds itself in a lot of hot water right now. The streaming giant is currently embroiled in a battle over misinformation and free speech centered around controversial podcast host Joe Rogan that has, to date, involved multiple rock legends and even earned a response from the White House. In addition to this, the Daniel Ek founded platform is battling several protests from artists worldwide concerned over the minuscule royalty rate offered by Spotify. While Joe Rogan earns $100million, musicians earn roughly $0.004 per stream before splitting that money with their team.

Longtime Haulix clients The Pocket Gods have developed a unique solution to their problems with Spotify. The English rock band is currently making headlines with plans to record and release a 1,000 track album comprised entirely of 30-second songs. The tracks are long enough to be counted as legitimate streams by Spotify but run much shorter than the average song.

The Pocket Gods were inspired to attempt this undertaking after reading an article in The Independent from professor Mike Errico. He said that Spotify’s methods surrounding what constitutes a song—otherwise known as their decision to count plays after 30-seconds—could signal the end of the three-minute pop song.

“I saw the article, and it made me think, ‘Why write longer songs when we get paid little enough for just 30 seconds?’” The Pocket Gods frontman Mark Christopher Lee told i News.

The new album – ‘1000×30 – Nobody Makes Money Anymore’ – directly references Spotify’s business model, and as such, Lee says that it means the band “run the risk of being thrown off the platform.”

Of the process of writing the album, he added: “We wrote and recorded 1,000 songs, each a shade over 30 seconds long for the album. The longest is 36 seconds. It is designed to raise awareness about the campaign for fair royalty rates.”

The logic behind Errico’s original story and The Pocket Gods’ new material is sound. If an artist stands to make the same amount of money for a 30-second song as they do from one that runs several minutes in length, then what is the value proposition of making longer songs? When it takes the same amount of time to consume one modern pop song in full as it does to hear 4-6 tracks of The Pocket Gods’ record, any artist hoping to make money will see the value in writing shorter material.

“Spotify is a great musical resource, and it allows indie bands like us to upload our music without record companies,” the frontman added. “I also believe in free speech even though I’m a massive Neil Young fan, so I don’t support the boycott. We just want to raise awareness of the royalties issue.”

This week, Music Biz host James Shotwell connected with Pocket Gods’ Mark Christopher Lee for a quick chat about the album, the response, and where the band goes from here. Check it out:

Music Biz is brought to you by Haulix, the music industry’s leading promotional distribution platform. Start your one-month free trial today and gain instant access to the same promotional tools used by BMG, Concord, Rise Records, Pure Noise Records, and hundreds more. Visit http://haulix.com/signup for details.

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Spotify Launches Lyrics Feature Globally For All Users

The latest Spotify update is available now across iOS, Android, desktop, games consoles, and TVs.

Spotify has made its highly-anticipated lyrics feature available worldwide following a limited rollout earlier this year.

The lyrics are sourced from Musixmatch, which offers lyrics for “over 8 million” titles. The feature will be accessible on basically every platform where Spotify has an app. That includes iOS, Android, desktop computers, gaming consoles, and smart TVs. It is available to both free and premium listeners.

As well as using the lyrics to sing along yourself, there’s also a social element that allows you to share lyrics on social media. Spotify says the feature will be available across the “majority” of its music library.

Here’s how to access the lyrics (and share them):

On the Spotify mobile app

  • Tap on the “Now Playing View” on a song.
  • While listening, swipe up from the bottom of the screen.
  • You’ll see track lyrics that scroll in real time as the song is playing!
  • To share, simply tap the “Share” button at the bottom of the lyrics screen and then select the lyrics you want to share — and where you want to share it — via third-party platforms.

On the Spotify desktop app

  • From the “Now Playing” bar, click on the microphone icon while a song is playing.
  • Voila! You’ll see track lyrics that scroll in real time while the song plays.

On the SpotifyTV app

  • Open the “Now Playing View” on a song.
  • Navigate to the right corner to the “lyrics button” and select if you want to enable Lyrics.
  • Once enabled, you’ll see the lyrics in the “Now Playing” View.

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3 Major Record Labels Now Earn $2.56 Million Every Hour

Despite the global pandemic, the three biggest record labels on Earth are still generating serious revenue in 2021.

A new report from MBW finds UMG, Sony, and WMG on course for one of the most lucrative years in music industry history. After reviewing the Q2 financials of each of the three major music companies, the leading industry platform found each label in an impressive growth period. Combined, the recorded music arms of the three major music companies generated $4.63 billion in the three months to end of June – up by an incredible 40.1% (or +$1.32 billion) on the same period of 2020. When you add global publishing revenues to recorded music revenues at UMG, SMG, and WMG, the three majors generated $5.60 billion in calendar Q2 2021, up by $1.53 billion (or +37.6%) on the same period of last year

That $5.60 billion turnover equates to the three majors cumulatively generating $61.5 million per day in the year’s second quarter – or, in turn, $2.56 million every hour.

Based on the current numbers, UMG, SMG, and WMG should finish the year generating more than $20 billion. That’s still a few billion short of the industry’s early 2000s high, but it’s closer than any other year this decade.

To put this figure further into perspective, a recent review of royalty rates from leading streaming services finds that independent solo musicians need at least 101,000 monthly streams to earn the equivalent to the minimum wage in the United States ($1256.67 per month). That number is much larger for a group featuring four or five members. It’s even larger when you have to account for label cuts, management cuts, etc.

When considering how many artists complain about their income level compared to the money music generates, one inevitably asks: Where does all this money go?

The answers are endless and (mostly) obvious. There are staffing costs, taxes, office costs, travel, promotion, and so on. It costs a lot of money to be among the biggest entertainment companies on the planet, and as rapper T-Pain revealed earlier this year, many people don’t realize how much labels spend to break and support talent.

Not found in the MBW report is any information on what portion of the money generated by these record labels will reach the artists on their roster.

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Spotify Is Testing ‘Spotify Plus,’ An Ad-Supported $0.99 Tier

Spotify Plus is currently available to a limited number of users, but that may change in the near future.

Spotify is currently testing a new preimum membership tier that will cost subscribers $0.99 per month. The ad-supported membership option is currently available to a small number of users, but the streaming giant may expand their testing field in the near future.

According to multiple reports, the ‘Spotify Plus’ plan still features ads like Spotify’s free tier, but it doesn’t impose any limits on the number of tracks you can skip per hour. Users are also free to pick which specific songs they want to listen to, rather than mostly being limited to shuffling within albums and playlists.

While the $0.99 price tag sounds enticing, it may not be the final cost. Spotify’s approach to testing involves offering the new plan randomly at a variety of price points to gauge user interest. The most popular price is not necessarily the one a company will use. Instead, Spotify is seeking a sweet spot between “this is too much” and “this is a steal” where consumers can be convinced to part with a few extra dollars a month in the name of control.

Spotify’s free tier has existed in its current form since 2018. It doesn’t let users skip more than six tracks per hour, and only lets them pick and listen to specific tracks from 15 select playlists, ranging from editorial-selected playlists to algorithmically generated collections like “Discover Weekly” and “Daily Mix.” Any listening that takes place outside those two playlists must use the shuffle functionality. Spotify Plus would reduce those restrictions without giving users complete freedom (like the current $9.99 tier).

Ads for Spotify Plus, which is currently available to a small batch of users for testing purposes.

“We’re always working to enhance the Spotify experience and we routinely conduct tests to inform our decisions,” a spokesperson said. “We’re currently conducting a test of an ad-supported subscription plan with a limited number of our users.”

However, Spotify cautioned that there’s no guarantee that the new tier will launch in its current form. “Some tests end up paving the way for new offerings or enhancements while others may only provide learnings. We don’t have any additional information to share at this time.”

Spotify has a long history of publicly testing major developments long before they reach the public. For example, the company’s long-discussed ‘car thing‘ has been in various stages of development for years. A hifi streaming option that could rival the lossless audio offered by Apple Music and Amazon Music was available to a small batch of users for testing earlier this year. To date, Spotify has not provided any timeline for the release of that streaming tier.

As much as we like to see Spotify continue evolving, the elephant in the room remains: How will this latest development, which has the potential to generate millions in revenue, benefit musicians?

Stay tuned.

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How Many Song Streams Does It Take To Earn Minimum Wage in 2021?

As the competition among streaming music platforms intensifies, many continue to wonder whether or not artists can support themselves on song streams alone. 

The current federal minimum wage in the United States is $7.25 per hour. The minimum wage may vary from state to state, but $7.25 per hour is the lowest an employer can pay unless the employee works in food service. Waiters and waitresses typically make far less, and the sooner you learn that the sooner you will begin to treat them better.

When you crunch the numbers, a person working full-time for minimum wage grosses roughly $1256.67 per month.

Most musicians hate to think about money. Artists like to believe that their pursuit of creative endeavors is pure. Many will tell you they are not in it for the money, but let’s be honest: it all comes back to money. You may be the greatest songwriter ever to live, but unless you can pay your rent and feed yourself, your career will only last a short time. 

Consumers don’t understand money as it relates to the music industry. They know that there are record labels and people in positions of power with millions of dollars to spend, but they also know that many artists are broke. The industry sells music as a lifestyle brand where everyone lives their best life, complete with jewelry and the latest tech. Still, most industry professionals live quiet lives that look nothing like what is sold in marketing campaigns. If you were to ask the average listener how much money their favorite act makes, they would tell you a figure rooted in their love of that talent. “Jack is so good,” they might say, “so I assume he’s doing well.”

In reality, Jack is living couch to couch whenever his band isn’t on the road. Jack doesn’t have health insurance, and he cannot remember the last time he saw a dentist. Jack is barely scraping by, but he doesn’t complain because he’s living his dream.

With more people than ever choosing to stream music instead of purchasing it, we recently began to wonder how many streams it would take to earn minimum wage. Finding the answer proved difficult because every service has its own royalty rate, and many streaming platforms use a sliding scale that fluctuates daily. After checking several sources for the most up-to-date rates, we ran the number and found the answers. Check it out:

A solo independent artist keeping 100% of their streaming revenue needs at least 100,534 streams per month (on Tidal) to earn minimum wage. On Spotify, the current most popular streaming service, that same artist would need 287,568 streams to see a similar return. 

Remember: The number in the chart above are for solo artists. A four-person band would need more than a million monthly streams on Spotify to earn minimum wage. Depending on their management and label cuts, that figure may be even larger!

Artists around the world continue to fight for higher per-stream royalties, but as of right now, no service seems likely to budge in their favor. Stay tuned. 

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How TikTok Royalties Are Calculated

TikTok is the premiere music discovery platform on the planet, but how are artists making money?

Exposure doesn’t pay the bills. As much as musicians enjoy any promotion they receive from a site or platform, money talks. Money makes the world go round, and it plays a role in the music business. It seems every other conversation in entertainment these days involves streaming royalties or a lack thereof. But what about TikTok royalties? The social media giant welcomes over 100-million users every month, most of whom spend hours on the app watching videos that include sound. Do artists get paid? If so, how?

For starters, yes, TikTok does pay artists for use of their music.

In comparison to other major platforms such as Spotify who pay per total number of streams, TikTok operates differently when calculating royalties and bases calculations on the number of videos made using your music, as opposed to the number of times the video is watched. That can often become confusing if you are measuring the way royalties are worked out against othersservices, so it’s important to understand the main difference here is that big view counts don’t equal large royalty payments.

To put it another way, the quantity of videos matters more than the total view count. One hundred videos with no views using a specific sound will generate more money than a single video with one million views. The views don’t matter.

TikTok royalties are based on market shares rather than metric views. To calculate the market shares, TikTok uses what is called “a creation.” A creation is when a user selects a release from TikTok’s library to make a video. Users can then make their own creations inspired by existing creations, all amounting to new creations. So, to put this simply, every time a user decides to use your music to make a video, this generates royalty.

And how much is a video worth? According to estimates online, TikTok royalties were close to $0.0067 per video using your music in 2018 and moved to $0.030 per video in June 2019. Based on these figures, ten thousand uses of this music would generate approximately $300.

Of course, this information is likely to change, TikTok is an evolving platform, and the conversation around royalties is unending. The company could easily choose to approach artist payments from a different position or price point overnight. When they do, we’ll cover it, so make sure you’re following Haulix on Facebook and Twitter.

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Apple Music Adding HiFi Streaming At No Extra Cost

As the competition among streaming platforms intensifies, Apple Music becomes the latest service to offer HiFi audio.

The rumors are true. After months of speculation, Apple announced this week that it’s bringing both spatial audio with Dolby Atmos and lossless audio to its music streaming service in June.

News of Apple Music‘s pending update is not surprising. The company has been leaning into spatial audio for some time, with both AirPods Pro and AirPods Max utilizing the technology. For the uninformed, Dolby Atmos is a format that allows creatives to mix music in a more immersive way. It’s sort of like creating a sound bubble around you. The nice thing is that so long as you have Apple headphones with an H1 or W1 chip, you’re good to go. So long as a track is recorded in Atmos and you have the hardware to support spatial audio, Apple Music will automatically play the highest-level quality. That goes for the built-in speakers on the latest iPhones, iPad, and Macs as well.

 Apple’s HiFi streaming will feature 16-bit at 44.1 kHz or standard CD-quality audio. That can also go up to 24 bit at 48 kHz on Apple devices. It’s also offering hi-resolution lossless audio that maxes out at 24 bit at 192 kHz. Interestingly, Apple is also using ALAC (Apple Lossless Audio Codec), which it made open source back in 2011. Once it launches, you can enable it by going to Settings > Music > Audio Quality.

The biggest surprise of Apple’s latest announcement is that HiFi streaming will be available to Apple Music users at no additional cost. That approach runs counter to the rest of the streaming market. Other services tack on an extra charge for lossless audio, including Spotify’s upcoming HiFi tier. Additional HiFi streaming services—Qobuz, Deezer, Amazon Music HD—also cost more and have weaker catalogs, with the majority priced at $15 a month and Tidal Masters costing $20 per month.

HiFi is having a moment. The question is whether or not the addition of HiFi streaming will convince consumers to switch to Apple Music. The most likely converts are people who already have AirPods and see the addition of HiFi as a way to make the most of their setup. If that market is large enough to impact Apple Music’s subscriber count significantly remains to be seen. 

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Soundcloud Introduces ‘Fan-Powered Royalties’ Plan To Pay Artists More Fairly

Soundcloud is onto something revolutionary in the world of streaming: Give listeners’ money to the artists they listen to and not those they don’t.

Calculating the amount of money an artist is likely to earn from streaming is far more complicated than most would assume. No service, including Spotify and Soundcloud, pays based on stream counts alone, and none offer a consistent royalty rate per stream.

Generally speaking, subscriber money is traditionally placed into a large pool that streaming services then pay to artists by comparing their streams for a month to the total streams on the platform.

Here’s an example: If Taylor Swift gets 5% of all streams on Spotify in June, she and her label will get 5% of your monthly subscription fee, even if you never listened to one of her songs.

Soundcloud has a plan to change this, and it begins with fans.

According to an announcement made on Tuesday, March 2, Soundcloud will soon begin using what it calls a “fan-powered royalty” system to compensate artists on its platform.

Under the new model, if a user paying $10 a month only listens to five artists, those five artists will get an equal split of that $10 — after SoundCloud takes its cut — no matter how many times the user listens to each of them.  

Users paying to support the artists they listen to instead of every artist on a platform may sound like an obvious notion. However, Soundcloud is the first mainstream streaming service to attempt such an effort. Others may follow suit in time, but it seems unlikely to happen unless artists and labels work together to push for change.

Soundcloud’s “fan-powered royalty” system goes into effect on April 1.

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Spotify Patents Tech To Monitor Your Speech and Infer Emotion

Spotify wants to know its users better, but its plans to do so are causing a stir online.

Have you ever opened Instagram or Facebook and saw an advertisement for something you were recently discussing in conversation? You never looked for the product on those apps, yet they seem to know what you want? If so, you’re not alone.

Many people believe big tech companies are spying on users’ behavior to create smarter algorithms that serve targeted ads. While that hasn’t been proven, it is eerie to see how well the algorithms currently in use understand your wants and needs.

Spotify’s latest patent is fanning the flames of spyware conspiracies, and it’s not hard to see the connection. The company filed a patent detailing how it could use microphones to determine people’s “emotional state, gender, age, or accent,” according to Music Business Worldwide.

The patent application was submitted back in 2018, but it wasn’t awarded until January 2021. The proposed tech would use its inferences about users to make listening recommendations. If it thinks you’re angry, for example, it may suggest a heavy metal playlist. If you just got dumped, maybe some Juice WRLD will soothe your broken heart.

The company also intends to throw in environmental sounds to the mix, like “vehicles on a street, other people talking, birds chirping, printers printing, and so on,” allowing for context-based recommendations. For example, if the algorithm believes you’re in Los Angeles, it will recommend songs and artists that people visiting the West Coast typically enjoy.

Many questions surrounding the patent have no clear answers. It’s not likely that Spotify will reveal more information about its plans until their tech is ready if such a product ever exists in the first place. Patents are often a legal cover for ideas or experiments a company considers but may ultimately never use.

But if the day comes to pass when Spotify introduces its listening tools, you can be certain some users will be upset. People will want to know when the app is listening, and they will want the ability to opt-out of sharing their life with a tech giant.

It’s important to remember that most of us already share more data with tech giants like Spotify than we realize. Our phones know where we are, what we look for, who we speak to, what we listen to, what movies we plan to watch, and we’re hoping to purchase. Similar information is known by countless websites that we visit, and many share their data with others to build smarter algorithms to keep us hooked on their products. You can call it insidious, or you can call it smart business. Either way, our data isn’t really ours anymore.

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