USER-CENTRIC ROYALTIES 101

Updated: Mar 25

SoundCloud announced that effective April 1, 2021, it will roll out a new User-Centric Royalties Payout ("UCRP") program. SoundCloud claims that its UCRP program or “fan-centered” system will create a set per-stream rate that lets fans’ streaming royalties go directly, and only, to the artists they listen to.


Currently, music streaming services employ a Pro-Rata Model ("PRM") where they collect all their monthly streaming revenue and then proportionally divide up and payout royalties according to the percentage of streams received by artists.


Unfortunately, "the likely impact isn’t so much about shifting royalties away from major labels and towards independents, or from big artists towards medium and small ones. If anything, it’s more about shifting the center of gravity for royalties away from the heaviest (and often youngest) users of streaming services, and towards the lighter (and often older) listeners." (MusicAlly, October 2020)


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