Warner Music Group Adopts the 'Fan-Powered Royalties' Model for SoundCloud Streams

July 21, 2022

SoundCloud has announced a global licensing deal with Warner Music Group (WMG), making it the first major label to adopt SoundCloud’s user-centric payout model, which it calls "Fan-Powered Royalties" (FPR). Launched in 2021, FPR is a first-to-market payout model driven by fandom and built to power the fan economy. Designed to maximize SoundCloud’s unique position as the only streaming service that enables and empowers artists to engage directly with fans, the model lays the foundation to give artists more control and opens up new products and fan monetization opportunities. FPR provides equitable and transparent ways for all artists, from indie darlings to international superstars, to earn money directly from their fans.

For a deep-drive conversation on Fan-Powered Royalties with SoundCloud's VP of Strategy, Michael Pelczynski , listen to the June 29, 2022 episode of the Canadian Musician Podcast HERE.

This new deal allows every artist across WMG’s roster to be paid based on fan listening behavior on SoundCloud. Under FPR, each fan’s subscription or advertising revenue is distributed among the artists they listen to, rather than being pooled under the traditional pro-rata model the music industry has been using for over a decade.

“Today's deal is a major milestone because, under Fan-Powered Royalties, more artists get paid more money. But even more importantly, Fan-Powered paves the way for artists to create even more opportunities to monetize their art beyond streaming and create more value, driven by engagement with their fans,” says Eliah Seton, president of SoundCloud. “Warner Music Group is known for developing some of today’s biggest superstars and helping them build long-term careers by investing in technologies and models which grow and support their fan communities. This makes them an ideal partner for SoundCloud and we’re excited to bring our game-changing fan-driven product to their incredible roster of artists. SoundCloud is known for our community of music-loving fans and this partnership aligns with our commitment to a fan-powered, artist-centric business.”

Oana Ruxandra, Chief Digital Officer and EVP of Business Development at WMG, adds: “The evolution of the music industry brings new ways to create, consume and monetize. As the ecosystem expands, WMG is focused on advancing and experimenting with new economic models to ensure the opportunities for our artists and their communities are maximized. SoundCloud has been an amazing partner in connecting artists and fans, deepening our relationship will allow us both to proactively build for the future.”

“This first-of-its-kind deal will create opportunities for artists across all genres, from emerging to superstars, to own the engagement with their fans for the first time,” adds Troy Carter, member of SoundCloud Board of Directors and founder and CEO of Venice Music. “I’m thrilled to be part of a group of dynamic leaders committed to bringing us one step closer to an artist-centric music industry.”