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SoundCloud Fan-Artist Payment System: Too Little, Too Late?

Cheyne Gateley/VIP

Big changes may be ahead for the Berlin-headquartered music streaming service SoundCloud.  

The company is reportedly getting ready to unveil a new system that would allow fans to pay artists directlyBillboard reported on Friday. Details on how exactly this payment system would work were initially unclear, and SoundCloud is also mulling multiple other streaming payout options.  

The company is expected to make its plans clear before the end of 2021.  

While implementing this new fan-artist payment system would mark a major shift for SoundCloud, which pays out most of its revenue to the biggest musiciansit seems likely the success of such a feature would be complicated by the fact that there are already so many musician-tipping alternatives. 

For example, Patreon, which counts over 200,000 creators, immediately comes to mind. Not all those creators are musicians, but the total value that patrons (fans) paid to musicians on Patreon did jump by over 60% between March and May 2020. And the number of musicians on the platform grew by 200% during that time. 

Meanwhile, the music category on Twitchwhere tipping culture has long been established, currently has nearly 5 million followers.  

Additionally, users have been able to tip on YouTube livestreams for years, while Facebook last August made it possible for musicians to charge for livestreams.  

The mere fact that these options already exist does not alone mean a SoundCloud fan-artist payment system stands no chance. But it does suggest many independent musicians already have ample monetization tools at their disposal, which suggests there are consumers out there who feel like there’s not a reason to utilize another artist-tipping feature on SoundCloud. 

Alternatives aside, another reason to temper expectations on how much of a boost a tipping-like system on SoundCloud could generate is to look at a previous similar attempt. Last April, Spotify unveiled a way for fans to tip artists, but a subsequent Vice interview with 13 indie artists suggested the feature wasn’t really moving the needle for them financially.  

Sure, the spirit of SoundCloud and Spotify are much different, but the Spotify scenario, at the very least, raises the possibility that tipping culture for musicians on music streaming platforms may be currently less established than tipping culture for, say, gamers on Twitch.  

What SoundCloud does have going is it’s currently a buzzing music app. That’s according to Sensor Tower, which found it was among the top three most downloaded U.S. music streaming apps in January 2021.  

If anything, that may more immediately bode well for SoundCloud’s ability to gather more music listener data to fine-tune its recommendation algorithms, which might better help get indie artists in front of fans who most want to hear them.