According to Fast Company, SoundCloud is launching revamped subscription tiers called Artist and Artist Pro that represent a fundamental shift in streaming economics. The platform, which hosts 100 million licensed tracks alongside 300 million creator-uploaded tracks, will now pass 100% of earnings from streams to artists, eliminating its previous 20% cut. This move specifically targets SoundCloud’s massive creator base of musicians, DJs, and podcasters who’ve used the platform as a discovery engine. The new offering also includes distribution to other streaming services, positioning SoundCloud as a comprehensive artist solution rather than just another streaming destination. This radical approach comes as streaming continues to serve as merely a “foot in the door” to real artist earnings through album sales and merchandise.
Sponsored content — provided for informational and promotional purposes.
The Streaming Math That Doesn’t Add Up
The music industry’s dirty secret is that streaming has been a terrible deal for most artists. While major labels and top-tier superstars benefit from the scale, the average musician earns between $0.003 and $0.005 per stream across major platforms. At those rates, an artist needs millions of streams monthly just to approach minimum wage. SoundCloud’s elimination of their 20% cut is mathematically significant – it could mean the difference between earning $800 versus $1,000 from the same number of streams. More importantly, it’s a powerful psychological move in an industry where artists increasingly feel exploited by the very platforms that depend on their content.
SoundCloud’s Strategic Positioning
This isn’t just generosity – it’s a calculated business move from a company that’s always occupied a unique space in the streaming ecosystem. Unlike Spotify and Apple Music, which focus primarily on licensed content from established artists, SoundCloud built its reputation as the platform where emerging artists discover their audience. By going to 100% royalties, SoundCloud is doubling down on its core differentiator: being the artist-friendly platform. They’re essentially saying, “We make less per stream, but we’ll attract more artists who bring more content, which brings more listeners, which creates more value overall.” It’s a classic network effects play in an industry dominated by scale economics.
Following the Money Trail
The financial genius here is in the subscription model structure. SoundCloud isn’t giving away everything – they’re still collecting monthly fees from both listeners ($9.99 for SoundCloud Go+) and creators ($4.99 for Artist, $12.99 for Artist Pro). The 100% royalty applies only to the streaming revenue portion, while SoundCloud maintains its cut of subscription fees. This creates a beautiful alignment: the more successful artists become on SoundCloud, the more likely they are to upgrade to Pro tiers for distribution and analytics, creating a virtuous revenue cycle. It’s essentially trading margin on streaming for market share in the creator tools space, which has much higher growth potential.
The Coming Platform Wars
This move will put immense pressure on competitors. Spotify has been experimenting with various artist tools and revenue streams, but they’re structurally constrained by their licensing agreements with major labels. Apple Music operates in a similar bind. SoundCloud’s independence gives them flexibility that the giants lack. We’re likely to see a bifurcation in the market: mass-market platforms for listeners versus artist-development platforms for creators. The real question is whether SoundCloud can scale this model profitably while maintaining their artist-first positioning. If they succeed, they could force the entire industry to reconsider how value is distributed in the streaming ecosystem.
The Artist Empowerment Question
While the 100% royalty sounds revolutionary, the devil is in the implementation. SoundCloud’s challenge will be maintaining this commitment as they scale. Many platforms start with artist-friendly terms that get watered down as investor pressure mounts. The distribution component is particularly interesting – by helping artists get on other platforms, SoundCloud is essentially acknowledging that no single streaming service can provide complete artist sustainability. This reflects the new reality that successful musicians must diversify across multiple revenue streams, from streaming to live performances to merchandise to sync licensing. SoundCloud’s bet is that by being the platform that helps artists navigate this complexity, they’ll earn loyalty that translates to sustainable business growth.
