Written by: Kai Eldridge, Music Discovery Editor, OnesToWatch
How SoundCloud and Spotify Treat Artists in 2026
- SoundCloud’s fan-powered royalties model pays artists $0.005–$0.012 per engaged play in 2026, which delivers roughly 2x–4x higher per-stream income than Spotify’s $0.003–$0.005 average for artists with loyal audiences.
- SoundCloud eliminated its 20% distribution revenue share in November 2025, so Artist Pro subscribers now keep 100% of royalties from Spotify, Apple Music, and 60+ other platforms.
- Spotify’s pro-rata model and 1,000-stream minimum threshold redirect royalties away from emerging artists, while payments go to rights holders rather than recording artists directly.
- SoundCloud offers direct uploads, a low $25 payout threshold, and hosts 375M+ tracks including demos and remixes, which gives independent artists greater control and accessibility.
- For discovery that goes beyond algorithms, human-curated coverage from OnesToWatch highlights emerging talent through editorial features and playlists.
Ethical Trade-offs Between SoundCloud and Spotify
Ethical comparisons between SoundCloud and Spotify hinge on how listeners define fairness for artists. Each platform uses a different payout structure that benefits some artists more than others.
SoundCloud advantages:
- Fan-powered royalties route each Premium subscriber’s fee directly to the artists they actually listen to, instead of pooling it across all platform streams.
- As of November 2025, SoundCloud removed its 20% distribution revenue share, so Artist Pro subscribers keep 100% of royalties from Spotify, Apple Music, TikTok, and 60+ other DSPs.
- Artists can upload directly without a third-party distributor, which preserves full control over release timing and edits.
- A low $25 payout threshold helps developing artists receive income more frequently.
- SoundCloud hosts 375M+ tracks, including demos, remixes, and DJ sets, giving independent artists a genuine publishing outlet beyond polished commercial releases.
Spotify advantages:
- Spotify paid the music industry over $11 billion in royalties in 2025, which remains the highest total payout of any music retailer.
- Its 675+ million monthly active users generate far more total revenue for many artists, even with lower per-stream rates.
- Algorithmic playlists such as Discover Weekly provide scalable discovery reach that SoundCloud’s community tools cannot fully match.
Spotify ethical concerns:
- The pro-rata model means a superfan who listens almost exclusively to one independent artist still subsidizes streams for major-label superstars.
- Spotify pays rights holders, including labels, distributors, and publishers, not recording artists directly, which creates an intermediary layer that reduces what artists actually receive.
- Spotify’s 1,000-stream annual minimum threshold, introduced in 2024, redirects micro-payments away from emerging artists with smaller catalogs.
- United Musicians & Allied Workers legislative director Damon Krukowski states that “There are zero payments going directly to recording artists from Spotify.”
Why Listeners Are Walking Away from Spotify
Listener frustration with Spotify has grown across multiple fronts in 2025–2026.
- The pro-rata royalty pool means an artist needs roughly 250,000 streams to earn about $1,000 before splits and fees.
- The 1,000-stream threshold mentioned earlier concentrates income at the top by redirecting royalties to already-qualifying tracks.
- Bundled subscription plans that include audiobooks may gradually shrink the royalty pool available for music streams.
- Geographic payout disparities are stark: Spotify pays $0.0039 per stream in the US but only $0.0008 in India, so artists with global audiences earn inconsistent income.
- Algorithmic discovery on Spotify favors high-volume established acts, which makes organic growth harder for independent and emerging artists.
- Dedicated fans often feel disconnected from artists on a platform designed for passive listening instead of community engagement.
These frustrations push listeners toward alternatives that value both fairer artist pay and more meaningful discovery. For fans who want that combination beyond algorithmic playlists, human-curated editorial coverage from OnesToWatch offers playlists and stories centered on emerging talent that Spotify’s machine-learning systems routinely overlook.
How SoundCloud’s Fan-Powered Royalties Work
SoundCloud introduced its Fan-Powered Royalties (FPR) model in April 2021, and the system follows a clear sequence.
- Individual subscription allocation: When a SoundCloud Premium subscriber pays their monthly fee, that subscriber’s revenue is allocated only to the artists they streamed that month, not to a shared pool.
- Engaged listener weighting: If a Premium subscriber streams only one artist’s music, that artist receives nearly all of the subscription dollar after SoundCloud’s platform cut.
- Per-stream rate outcome: This structure produces the higher per-play rates mentioned earlier, which significantly exceed Spotify’s pooled average for artists with dedicated listeners.
- Stacking earnings: SoundCloud Premier monetization stacks additional earnings on top of 100% distribution royalties for artists with 5,000+ plays in the previous month, often doubling total per-stream revenue compared with Spotify-only payouts.
- Contrast with pro-rata: Under Spotify’s model, all subscription and advertising revenue enters a single pool that is distributed based on each artist’s share of total platform streams, so a superfan’s subscription fee is diluted across millions of streams they never chose.
2026 Streaming Payouts at a Glance
| Platform | Per-Stream Range (Engaged Listeners) | 50,000 Streams Example | Notes |
|---|---|---|---|
| Spotify (pro-rata) | $0.003–$0.005 | ~$175 | Pooled model, with rates that vary by listener geography and subscription tier. US rate is about $0.0039, while India averages about $0.0008. |
| SoundCloud (Fan-Powered Royalties) | $0.005–$0.012 | ~$275 (50/50 engaged/passive mix) | FPR applies to Premium listeners only, so passive or free-tier plays lower the effective average. Headline average across all plays sits around $0.0025–$0.004. |
Artist case study, niche electronic producer: An independent electronic artist with 8,000 dedicated SoundCloud followers and 50,000 monthly plays, mostly from Premium subscribers, reported per-play rates in line with the $0.005–$0.012 FPR range, which roughly doubled what the same stream count generated on Spotify.
Artist case study, emerging hip-hop artist: An emerging hip-hop artist with a broader but less engaged Spotify audience earned about $300–$500 per 100,000 Spotify streams versus $200–$400 per 100,000 SoundCloud plays, showing how Spotify’s scale can outweigh FPR benefits when audience loyalty is lower.
Alternatives for Listeners Boycotting Spotify
Listeners who want to move away from Spotify can choose from several platforms, each with clear strengths and trade-offs.
- SoundCloud: Works best for fans of independent, emerging, electronic, hip-hop, and experimental artists. Its 175+ million users and direct upload access create a real discovery community. Fan-powered royalties provide higher per-stream income for artists with loyal audiences. The catalog includes 375M+ tracks with demos and remixes, but it lacks the polished licensed catalog depth of Spotify’s 100M+ commercial releases.
- Apple Music: Uses a pro-rata model similar to Spotify but often pays slightly higher per-stream rates in some markets. Catalog depth closely matches Spotify, although it does not offer a fan-powered model.
- Bandcamp: Lets artists set prices while fans pay them directly. There is no per-stream model, so purchases and tips flow almost entirely to artists. Catalog size and discovery tools remain more limited than major streaming services.
- Tidal: Pays higher per-stream rates than Spotify in some tiers and offers HiFi audio quality. A smaller user base limits total revenue potential for many artists.
How to choose based on your priorities:
Start by identifying your primary listening goal. If catalog breadth matters most, Spotify or Apple Music remain the most practical options. If you prioritize supporting emerging and independent artists through better per-stream economics, SoundCloud’s FPR model offers a structural ethical advantage, although you trade some catalog depth for that benefit. For the most direct artist support with no intermediary, Bandcamp purchases and artist merchandise bypass streaming economics entirely. Regardless of platform choice, authentic discovery of emerging talent works best when you pair streaming with a human-curated editorial source that spots artists before algorithms react.
No streaming platform alone solves discovery for dedicated fans. Explore the Top Artists To Watch in 2026 from OnesToWatch for human-curated picks that reach beyond what any algorithm surfaces.
Frequently Asked Questions
Does SoundCloud actually pay artists more than Spotify?
Outcomes depend on audience type. For artists with small, highly engaged audiences, SoundCloud’s fan-powered royalties model pays $0.005–$0.012 per engaged play, which is roughly 2x to 4x Spotify’s effective average of $0.003–$0.005. For artists with large but less engaged audiences, Spotify’s scale usually generates more total revenue despite lower per-stream rates. The 50,000-stream comparison shows about $175 on Spotify versus $275 on SoundCloud for a 50/50 engaged-to-passive listener mix.
What is SoundCloud’s fan-powered royalties model?
Fan-powered royalties allocate each Premium subscriber’s monthly fee directly to the artists that subscriber actually listened to during the month. If a subscriber streams only one artist, that artist receives nearly all of the subscription dollar after SoundCloud’s platform cut. Spotify’s pro-rata model instead pools all revenue and distributes it based on each artist’s share of total platform streams, which dilutes the value of any individual fan’s subscription across millions of other streams.
Is Spotify’s royalty model ethical for independent artists?
Spotify’s pro-rata model concentrates payouts toward high-volume artists and major labels. The 1,000-stream annual minimum threshold redirects micro-payments away from emerging artists. Spotify pays rights holders, including labels, distributors, and publishers, instead of artists directly, so an intermediary layer reduces what recording artists receive. Independent artists who register with The MLC for mechanical royalties and a PRO for performance royalties can increase total per-stream income by 15–25% beyond the sound recording royalty alone.
Can I use both SoundCloud and Spotify to support artists?
Using both platforms can increase artist income. SoundCloud Artist Pro subscribers keep 100% of distribution royalties from Spotify, Apple Music, and 60+ other platforms as of November 2025, so streaming on Spotify still generates income for artists who distribute through SoundCloud. Listening on SoundCloud directly adds fan-powered royalty income on top of distribution royalties, which can effectively double per-stream revenue for SoundCloud-native artists. Combining both platforms also balances discovery reach with higher per-fan payout.
What is the best platform for discovering emerging artists in 2026?
SoundCloud’s community-driven discovery, built on reposts, comments, and follower activity, supports organic growth for niche genres and emerging artists, especially in electronic music, hip-hop, lo-fi, and experimental scenes. Spotify’s algorithmic playlists favor artists who already generate high streaming volume, which makes early-stage discovery more difficult. Human-curated editorial platforms such as OnesToWatch’s emerging artist coverage add a discovery layer that neither algorithmic nor community systems can fully replicate, often identifying artists before they reach streaming thresholds that trigger algorithmic promotion.
Conclusion: Matching Platforms to How You Want to Support Artists
SoundCloud’s fan-powered royalties model gives artists with loyal, engaged audiences a structural ethical advantage, with per-stream payouts of $0.005–$0.012 compared with Spotify’s pooled average of $0.003–$0.005. That advantage narrows or reverses for artists whose audiences are large but passive, where Spotify’s massive user base can generate more total revenue despite lower per-stream rates. The 1,000-stream minimum threshold and pro-rata pooling remain serious ethical concerns for emerging artists on Spotify, while SoundCloud’s catalog gaps and smaller audience create real trade-offs for listeners.
The most practical approach for dedicated fans is to match platform choice to artist type. Use SoundCloud for independent and niche artists with loyal followings, choose Spotify or Apple Music when catalog depth matters most, and turn to Bandcamp when direct artist support is the priority. For discovery that reaches beyond what any algorithm or community feed surfaces, human-curated sources remain the most reliable way to find authentic emerging talent before they break.
OnesToWatch has covered more than 850 artists over the past decade, including Billie Eilish, Chappell Roan, Olivia Rodrigo, and Doechii, all highlighted before mainstream streaming algorithms caught up. Discover your next favorite artist and the story behind their rise by exploring their latest in-depth features and playlists.