SoundCloud Monetization vs. DistroKid Streaming Distribution: A Comparison

Both SoundCloud and DistroKid play essential roles in the independent music world, but when it comes to monetization and distribution, they take very different approaches. In this article, we’ll explore how each platform handles monetization and whether using only SoundCloud for both distribution and community building is a good idea.

SoundCloud Monetization: How It Works

SoundCloud’s monetization is part of its SoundCloud Premier program, designed to help creators earn revenue directly from their streams on the platform. Here’s a breakdown of how it works:

1. Eligibility:

• SoundCloud Premier is available to Pro Unlimited subscribers, and to qualify, artists must have at least 5,000 plays in the past month from listeners in SoundCloud’s monetized territories (which include the U.S., U.K., Canada, and a few others).
• Artists must own 100% of the rights to their music and must not have the same track monetized elsewhere (no third-party distributions like DistroKid).

1. Revenue Model:

• SoundCloud offers a revenue share model, where artists keep 55% of the net revenue generated by their streams. This is comparable to streaming services like Spotify but typically applies only to plays on SoundCloud itself, not external platforms.
• SoundCloud makes money from ads or subscriptions (SoundCloud Go+), and artists are paid from these revenue streams.

1. Geographical Limits:

• Monetization is available in limited countries, and plays outside those territories won’t generate income.

1. Payout:

• Payments are made monthly, and there are no payout minimums—artists get paid regardless of how small the amount may be.

Pros:

• Direct fan interaction on a social platform.
• Potential to monetize plays on SoundCloud itself.
• Useful for community-building and testing new music.

Cons:

• Revenue only comes from SoundCloud streams (not other platforms).
• Limited to specific territories.
• The revenue share is lower than DistroKid’s all-platform approach.

DistroKid Monetization and Streaming Distribution

DistroKid is not a platform where fans interact directly with artists like SoundCloud, but it focuses on distributing music to major streaming platforms, which is where most monetization happens. Here’s how DistroKid handles it:

1. Revenue Model:

• DistroKid allows artists to keep 100% of their royalties from streaming services like Spotify, Apple Music, Tidal, Amazon Music, and more. Unlike SoundCloud, it takes no cut of streaming revenue.
• You pay an annual fee (starting at $19.99) and can upload unlimited music. The fee covers distribution to all major platforms, and DistroKid doesn’t charge extra for additional releases.

1. Global Reach:

• DistroKid distributes your music to all the major streaming services, which gives you access to a global audience and helps you earn from plays worldwide. This contrasts with SoundCloud’s monetization, which is restricted to a few territories.

1. Additional Features:

• DistroKid offers add-ons like YouTube Content ID (to monetize your music on YouTube), automatic payment splits for collaborators, and tools for promoting your releases, such as Spotify pre-save campaigns.
• Streaming services generally pay artists based on a per-stream model, where payments vary depending on the platform and region.

Pros:

• Global distribution to all major streaming platforms.
• You keep 100% of your earnings.
• Paid streams from multiple platforms can stack up.
• Features like YouTube Content ID can add another layer of income.

Cons:

• Less direct fan engagement compared to SoundCloud.
• No in-platform community building like reposts, comments, or playlists.

Using Only SoundCloud for Both Distribution and Promotion: Is It Enough?

SoundCloud is fantastic for building a fanbase and promoting your music through direct interactions, but when it comes to full-scale distribution and monetization, it has limitations. Let’s break down why using only SoundCloud may not be the most strategic approach for independent artists.

1. Limited Monetization:

• While you can earn money from SoundCloud streams through SoundCloud Premier, that’s only for plays within SoundCloud itself. You’re missing out on revenue from platforms like Spotify, Apple Music, and YouTube.
• Streaming services pay based on a much larger listener base than SoundCloud, so focusing solely on SoundCloud could limit your income potential.

1. Narrow Audience Reach:

• SoundCloud is primarily a niche social platform, and while it has a loyal user base, many listeners prefer streaming platforms like Spotify for daily music consumption.
• By using only SoundCloud, you’re not tapping into the massive potential audience on those services, where discovery algorithms and curated playlists can help you grow.

1. Lack of Multiple Income Streams:

• DistroKid gives you access to streaming platforms, YouTube, and social media (like TikTok and Instagram), where you can earn revenue from a variety of sources.
• SoundCloud’s revenue is limited to ads and subscriptions, while DistroKid’s streaming model gives you a broader income stream across platforms.

The Best of Both Worlds: Combining SoundCloud and DistroKid

If you’re serious about building a career in music, it might make sense to use both platforms to their full potential.

• Use SoundCloud for:
• Direct engagement with fans: Likes, comments, reposts, and playlists allow you to build a community around your music.
• Testing new material: You can upload songs to see how your audience reacts before releasing them on bigger streaming platforms.
• Monetizing directly from SoundCloud streams (if you qualify for SoundCloud Premier).
• Use DistroKid for:
• Wide-reaching distribution: Get your music on all major streaming platforms like Spotify, Apple Music, Amazon, and more.
• Maximizing monetization: With DistroKid, you earn from every stream on all platforms, without sharing revenue with a distributor.
• Features like YouTube Content ID, royalty splits, and playlist submission tools that help with both income and promotion.

Conclusion: Should You Use Only SoundCloud?

In short, only using SoundCloud for both distribution and promotion can limit your reach and revenue potential. While it’s a great tool for engaging with your fanbase, SoundCloud’s monetization and distribution capabilities don’t compare to the wider reach of streaming services available through DistroKid.

For most artists, the best approach is to combine both platforms. Use SoundCloud for community building and fan engagement, and DistroKid for monetizing your music on major platforms and reaching a global audience. Together, they create a powerful strategy for independent artists to both connect with their audience and maximize their income.