SoundCloud partners with independent music agency Merlin for global Fan-Powered Royalties deal

SoundCloud has announced a new partnership with Merlin, a digital music licensing agency for independent labels, on a global licensing deal. The agreement permits Merlin members and their artists to take part in SoundCloud’s Fan-Powered Royalties (FPR) model.

Unlike Spotify’s traditional pro-rata “one big pot” streaming model, FPR is a user-centric model that allocates a share of each listener’s subscription and advertising revenues only to the artists and tracks they individually listen to.

SoundCloud introduced its “fan-powered royalties” model back in April 2021, aiming to benefit rising independent artists with loyal fans. As of April 2022, SoundCloud reported that 135,000 artists were being paid through its Fan-Powered Royalties platform.

Merlin, which represents a significant share of the global recorded music market, includes independent record labels, distributors, label services companies, and other rightsholders among its members, such as Amuse, Beggars Group, Cinq Music, Domino Recording Co., Foundation Media, IDOL, Secretly, Symphonic Distribution, and Too Lost. All these members are set to participate in the FPR program, and this partnership provides Merlin’s members and their artists with new revenue opportunities empowering fans to directly support their favorite artists from across Merlin’s global membership.

Jeremy Sirota, CEO of Merlin, said, “Merlin is proud to partner with SoundCloud and bring their innovative Fan-Powered Royalties payout model to our global membership. This collaboration will strengthen Merlin’s community of independent rightsholders and provide them, and their artists, the tools to build closer relationships with fans.”

Jasper Goggins, President of independent record label and Merlin member Mad Decent, expressed excitement about testing the FPR model through Merlin. He said, “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 look forward to seeing the results.”

Eliah Seton, Chief Executive Officer of SoundCloud, expressed the company’s commitment to being artist-first. He 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. I’m thrilled that Merlin’s extraordinary community of independent labels and distributors, and by extension their artists, will now benefit.”

This collaboration is another step forward for SoundCloud, which recently teamed up with Israel-based music marketing platform Feature.fm to provide indie artists with marketing tools and resources. SoundCloud has also established an artist-signing joint venture with Solid Foundation, the management and creative services arm of QC Media Holdings. In addition, SoundCloud expanded its artist services business globally by entering into a joint venture with 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, as it recently partnered with fitness app Supernatural and formed a multi-territory licensing deal with China-based TikTok rival Kuaishou.

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