SoundCloud, Merlin strike global licensing deal to bring fan-powered royalties model to indie labels – Music Business Worldwide

SoundCloud has teamed up with Merlin, the digital music licensing agency for independent labels, on a global licensing deal, allowing Merlin members and their artists to participate in SoundCloud’s Fan-Powered Royalties (FPR) model.

Unlike the traditional pro-rata model, FPR is a user-centric model that allocates a share of each listener’s subscription or advertising revenue to the tracks they listen to.

SoundCloud introduced its “fan-powered royalties” model – its own branding of the user-centric model back in April 2021.

The platform suggested at the time that the move would “benefit rising independent artists with loyal fans”.

By April 2022, SoundCloud reported that 135,000 artists were getting paid through its Fan-Powered Royalties platform.

In July last year, Warner Music Group signed a global licensing deal with SoundCloud, becoming the first major label to adopt SoundCloud’s payout model.

Merlin, which represents a significant share of the global recorded music market, counts independent record labels, distributors, label services companies, and other rightsholders among its members.

These include companies like Amuse, Beggars Group, Cinq Music, Domino Recording Co., Foundation Media, IDOL, Secretly, Symphonic Distribution, and Too Lost, which will all participate in the FPR program.

Jeremy Sirota, CEO of Merlin, 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”. 

“Merlin is proud to partner with SoundCloud and bring their innovative Fan-Powered Royalties payout model to our global membership.”

Jeremy Sirota, Merlin

“Merlin is proud to partner with SoundCloud and bring their innovative Fan-Powered Royalties payout model to our global membership,” said Sirota.

“This collaboration will strengthen Merlin’s community of independent rightsholders and provide them, and their artists, the tools to build closer relationships with fans,” Sirota continued.

Jasper Goggins, President of independent record label, and Merlin member, Mad Decent, commented on his company taking part in testing the FPR model through Merlin.

“We’re excited that SoundCloud is taking the lead in experimenting with a revenue model that many indie labels have been intrigued about for years. We’re happy to be a part of testing this new model through Merlin and we look forward to seeing the results,” Goggins said.

“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 connection.”

Eliah Seton, SoundCloud

“At SoundCloud, we’re committed to being artist-first,” said Eliah Seton, Chief Executive Officer of SoundCloud.

“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 connection.

“I’m thrilled that Merlin’s extraordinary community of independent labels and distributors, and by extension their artists, will now benefit.”

Elsewhere at SoundCloud, less than a month ago, the platform teamed up with Israel-based music marketing platform Feature.fm to provide indie artists with marketing tools and resources as they launch their careers.

In February 2022, SoundCloud established an artist-signing joint venture with Solid Foundation, the management and creative services arm of QC Media Holdings.

In February 2023, SoundCloud expanded its artist services business globally by entering into a joint venture with Jax Jones’ and Dan Stacey’s UK-based, dance-focused record label, WUGD (What You Gonna Do) Ltd.

For Merlin, the alliance with SoundCloud further expands its offerings to member labels and their artists. 

In December 2022, Merlin partnered with fitness app Supernatural, allowing Meta Quest VR headset users to work out to tracks by indie artists under Merlin. Merlin also formed a multi-territory licensing deal with China-based TikTok rival Kuaishou.

Music Business Worldwide