SoundCloud, which launched the new royalties scheme in 2021, described it at the time as 'a more equitable and transparent way for independent artists who monetise directly with SoundCloud to get paid.' The previous model, described as pro-rata, saw artists get paid based on their share of total streams on the platform, while SoundCloud also previously took out its own share of 30 per cent for 'overhead costs.'

Earlier this year, the auditing firm KPMG warned that SoundCloud needs to raise additional funds in order to remain solvent.Warner Music Group has become the first major label to adopt SoundCloud's 'fan-powered' royalty model that sees royalties distributed according to how much individual users listen to an artist's music. SoundCloud also introduced a subscription service this year, bumping its annual revenue by 43% to $28 million, but they've yet to report a profit. Apple Music meanwhile, has notched 20 million subscribers in its first 18 months.

The online streaming service currently boasts 100 million users, 40 million of whom pay for the premium version. Spotify, fighting off Apple Music for streaming dominance, recently raised $1 billion in funds that are incentivized if the Swedish-based company goes public in 2017. In September, Financial Times reported that Spotify was in 'advanced talks' to acquire SoundCloud, but now TechCrunch says the deal has gone cold.Ī source told the startup-minded publication negotiations halted because Spotify 'doesn’t need an additional licensing headache in a potential IPO year,' referring to the 'complexity and financial cost that comes with negotiating with music labels, something that is hugely important to SoundCloud.'

Spotify is no longer in the running to buy SoundCloud.Īs previously reported, the Berlin-based SoundCloud is actively seeking a buyer.

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