SoundCloud, Merlin Bring Fan-Powered Royalties to Indies

SoundCloud has partnered with Merlin, the predominant digital music licensing agency for indie labels, to bring its members and artists into SoundCloud's "Fan-Powered Royalties" (FPR) model. Unlike traditional streaming models, similar to Spotify's "one big pot," FPR is user-centric, allocating a share of each listener's subscription and advertising revenues to the artists and tracks they individually listen to. SoundCloud launched FPR in April 2021 and aims to benefit rising independent artists with loyal fans. As of April 2022, 135,000 artists were being paid through the FPR platform.

Warner Music Group was the first major label to adopt SoundCloud's payout model in July 2021. Merlin, which represents a significant share of the worldwide recorded music market, includes independent record labels, distributors, label services companies, and other rightsholders among its members. These include Amuse, Beggars Group, Cinq Music, Domino Recording Co., Foundation Media, IDOL, Secretly, Symphonic Distribution, and Too Lost, who will all participate in the FPR program. 

Merlin CEO Jeremy Sirota said the partnership provides members and their artists with new revenue opportunities, "empowering fans to directly support their favorite artists from across Merlin's global membership." SoundCloud CEO Eliah Seton added that the FPR model makes streaming royalties more equitable, helps artists benefit directly from their fans, and opens the door for more meaningful fan-to-artist connections.

Recently, SoundCloud teamed up with Israel-based music marketing platform Feature.fm to provide indie artists with marketing tools and resources as they launch their careers. SoundCloud also established an artist-signing joint venture with Solid Foundation, the management and creative services arm of QC Media Holdings, in February 2022, and expanded its artist services business globally with a joint venture with UK-based, dance-focused record label WUGD (What You Gonna Do) Ltd. in February 2023.

Merlin's partnership with SoundCloud further expands its offerings to member labels and their artists. In December 2022, Merlin partnered with fitness app Supernatural and formed a licensing deal with China-based TikTok rival Kuaishou.

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