Is SoundCloud or Spotify better for indie musicians?

Here’s a closer look at two of the most used streaming platforms and which one may be a better fit for independent artists as they hone their craft and build a fanbase.

by Scott McCormick of Disc Makers Blog

To make a splash in the music business, independent artists not only need to produce and distribute physical media (CDs and vinyl), but they also have to stream their music on the biggest platforms in the world.

Disc Makers can help you with the physical media part, but how do you handle digital streaming and downloads? And which platforms do you need to be on? Everyone wants to know how to make money with music. Today we’ll compare two of the biggest platforms — SoundCloud vs. Spotify — and help you decide which one you need to be on, or if you can be on both.

How to choose a digital music distributor

In order to stream your music to the biggest platforms, you need to sign up with a digital music distributor. There are dozens of such companies vying for your business, and their offers and services are constantly changing, which can make it challenging to choose the best one.

As of May 2023, there are three main distributors: CD Baby, Distrokid, and Tunecore. Each of these companies will deliver your music to the biggest music streaming platform, Spotify, but they will also distribute your music to a variety of other giants, like Apple Music and Amazon Music, as well as social media platforms like Instagram and TikTok.

But you may have noticed that one huge platform is missing from this list: SoundCloud. SoundCloud is not just a music streaming platform, it is also a distributor, thanks to a fairly new program called SoundCloud for Artists. SoundCloud for Artists will not only distribute your music through SoundCloud, but it will also deliver your music to all the streaming and social media platforms as the others, including Spotify. But they do so at a cost that is greater than the other distributors.

So, the question for new artists these days is this: You know you need to be on Spotify (and Apple Music, etc.), but do you also need to be on SoundCloud? And if so, what’s the best way to distribute your music in 2023 to ensure the widest distribution and the best deal?

SoundCloud features

SoundCloud is one of the largest music platforms in the world, offering over 200 million songs and featuring 175 million active monthly users (compared to Spotify, which has 271 million active monthly users).

From the very beginning, SoundCloud was very much focused on indie musicians, making it easy for them to upload and share their new music. And because of this, the streaming platform offered up a much better way for independent musicians to get noticed. You can also upload exclusive content for your followers that can only be accessed by a private URL.

But SoundCloud isn’t just a platform, it is also a distributor. In 2019, SoundCloud purchased Repost Network, a music rights management and distribution company. Soon afterward, SoundCloud launched its own service called Repost by SoundCloud, which was later rebranded as SoundCloud for Artists.

Some features include:

• Unlimited global release distribution to more than 60 social networks and streaming platforms including Spotify, Apple Music, and TikTok.
• Automatic release distribution to newly added streaming platforms.
• Permanent release distribution with regular and uninterrupted royalty payments.
• YouTube monetization.
• Split payments.

You can get all of this with SoundCloud’s Next Plus plan, which is $2.50/month and allows you to upload three hours of music. If you need more than that (and get a few other bells and whistles), you can upgrade to Next Pro, which is $9.99/month for the first year and then $12/month for every year after that.

How do these prices compare to other distributors?

It’s difficult to calculate because every company charges its customers in different ways. For example, Distrokid charges you $22.99/year for unlimited uploads and you get to keep 100 percent of your royalties (except for YouTube, where Distrokid takes 20 percent), but it gets you with tons of little fees, which you can find on its website.

SoundCloud’s royalty rate

While Distrokid and Tunecore both pay you 100 percent of your royalties earned from such sites as Spotify and Apple Music, SoundCloud pays you only 80 percent. This makes them a less-than-ideal distributor for all platforms outside of SoundCloud itself. (This article from Demfire Creation goes into great depth showing you how much you can earn from each of the big four distributors, including SoundCloud for Artists.)

Fan-Powered royalties

When people listen to your music on SoundCloud itself, SoundCloud for Artists pays you royalties calculated through a new program called fan-powered royalties. These are based on what portion of a fan’s time they spend listening to each artist. According to SoundCloud:

The total amount of money generated by a fan for the artists they listen to is based on a few factors:
1. How much the fan listens to that artist relative to all of their listening time in a given month
2. How many advertisements the fan has consumed
3. Whether the fan has a paying subscription to SoundCloud Go+ [or is a free user]

Does your music need to be on SoundCloud?

If you are producing hip-hop or other electronic music, SoundCloud is still the number one music platform for those genres, so you definitely want your music to be there. If you are making music outside of those genres, SoundCloud is less important for you.

However…

Generally speaking, you want your music to be everywhere, because you never know where your listeners are going to be, and because each platform rises and falls in popularity over time.

But is it worth using SoundCloud for Artists as your distributor even though their royalty rate isn’t great? Or is there a better way to get your music everywhere?

Before we answer that, let’s compare some of the features you can get from having your music on Spotify.

Spotify for Artists features

As mentioned earlier, Spotify is the biggest streaming platform (outside of YouTube), featuring 271 million active monthly users as of this publication. Not only does it have the biggest audience, Spotify is the number one destination for listeners of every genre of music outside of hip-hop and electronic music.

Unlike SoundCloud, Spotify is not a distributor. If you want to get your music on Spotify, you need to sign up with a distributor. They work with dozens of distributors, including SoundCloud.

Once your music is on Spotify, you can sign up with Spotify for Artists, which offers you valuable tools to help promote your music. Here are a few examples:

• Canvas: add short looping videos to each of your tracks
• Clips: another form of short video, similar to TikTok videos. (Currently in beta testing)
• Discovery mode: allows you to prioritize certain songs to make search engine discovery more likely
• Marquee: a full-screen, sponsored recommendation of your new release to Spotify Free and Premium listeners who have shown interest in your music
• Merch: Spotify offers a Shopify integration that allows you to sell merch (costs $5/month)
• Playlisting: every artist hopes to get on a Spotify Playlist, which offers the best way for your music to get discovered by new fans
• Promo cards: helps you to create custom graphics to highlight new releases

As you can see, Spotify offers you a lot of tools to build a buzz for your music. So, you definitely want your music on Spotify. But you also want to be on SoundCloud…

What’s the best way to be on both SoundCloud and Spotify?

Your best bet is to sign up with two distributors. Join SoundCloud for Artists solely to get your music on SoundCloud. But then choose one of the big three distributors (Tunecore, CD Baby, or Distrokid) to get your music on Spotify and all the other platforms. This way you can maximize your profits, widen your reach, and give yourself the best chance to boost your musical career.

Which distributor should you choose?

CD Baby, Tunecore, and Distrokid are all great companies, each one offering different features, fees, and royalty rates. You can’t really go wrong with any of them.

If you are unsure which distributor to use, we’ve created a free PDF to help you decide. You can download it here.

Scott McCormick is the author the Audible bestselling Rivals! series and the hit fantasy novelThe Dragon Squisher. Scott can be reached at storybookediting@gmail.com.