The music streaming platform, SoundCloud is introducing a new payment system that would allow fans to pay artists directly. Billboard reported.
Multiple sources tell Billboard, SoundCloud is still exploring several alternative streaming payout models and will announce its plans before the end of the first quarter of 2021. SoundCloud declined to comment.
The new model will be a big shift for SoundCloud, which currently utilizes a “pro-rata” model, the same method used by all major streaming services, pooling subscriber revenue and doling out earnings to the artists who brought in the most streams, directing most of the revenue to the world’s biggest acts.
SoundCloud’s 175 million monthly users now have the option to pay up to $10 a month for the company’s on-demand streaming service SoundCloud Go+, but their payments aren’t distributed to artists based on who they personally listen to, and they can’t “tip” or steer their subscription fees toward their favorite acts.
The development comes as British lawmakers grill music executives on the fairness of streaming economics and explore the potential benefits of so-called “user-centric” payment models, like the one SoundCloud has in the works.