A fiscal report obtained by Music Business Worldwide (MBW) shows that streaming platform SoundCloud reported $218 million in revenue in 2020. Since then, the company has been expanding their platform’s capabilities to compete with other streamers.
Summing up their findings from the fiscal report, MBW states that the $218 million represents a 31% year-on-year growth. Their gross profit increased by 53% to $69 million and their operating losses shrunk by 41% down to $17.4 million as well.
After their record 2020 earnings, CEO Michael Weissman launched a new payment model for artists called “fan-powered royalties” (FPR). Under this model, each SoundCloud listener’s subscription or advertising revenue is distributed only among the artists to which they listen. This is in contrast to a “pro-rata” payment structure (i.e., what Spotify uses), where all revenue is pooled together each month and music rights holders get paid based on their market share of all plays. Around 100,000 artists were initially invited to participate.
This new payment model coincides with SoundCloud’s push to expand its Creator Services operation. With these services, artists can get help with digital distribution and other benefits to help their careers. Last month, they announced a new white-glove tier for Content Creators called the “roster.” Access to this level grants indie artists creative and financial resources as well as marketing support. As of now, eight artists are on the roster.