Like most streaming revenue situations, it’s complicated.
Yesterday, streaming platform Mixcloud outlined how much money it’s doling out from its “fan-to-creator” subscription service Mixcloud Select, and while it’s arguably the best way for DJs to make money from online mixes, it’s not quite at the scale of similar artist crowdfunding sites like Patreon – primarily because there’s a lot more people that need to get paid.
In a Medium post, Mixcloud breaks down the percentage split between the company, the creators making the shows and the rights holders for the music itself. The bulk of the earnings from fan subscription fees go to rights holders identified by audio fingerprinting – 65%. Another 30% is split between Mixcloud and the show’s creator, with 5% covering transaction fees.
As it explains, Mixcloud had to make direct deals with with Universal Music Group, Sony Music Entertainment, Warner Music Group, Merlin, Warner/Chappell Music Publishing and ICE among others to make this happen. The streaming service says these deals are “groundbreaking” because they identify the “long form audio creator” as a part of the royalties puzzle.
Of the 30% that goes to Mixcloud and the content creators, 60% is given to the talent running the channels and 40% is invested back into Mixcloud’s platform – administering licenses, maintaining the website and the apps, hosting the audio and paying rent. In real terms, this means that 18 cents of every dollar goes to the creators, or roughly 54 cents of each $2.99 monthly subscription fee.
Since launching last year, artists, labels and independent operations including John Digweed, Beats In Space, Dekmantel, Lefto, Worldwide FM and Soho Radio have all signed up to the service. In return for supporting the channel of their choice, fans are treated to exclusive content and offline listening as well as the warm feeling of supporting their favorite creators – “essentially the price of buying a monthly coffee”, as Mixcloud puts it.
It’s not a huge sum, and if a creator can amass 1,000 fans willing to pay for a monthly subscription, they would make $540 a month – not an inconsiderable sum in what are trying financial times for musicians. However, Mixcloud Select’s model relies on fans being dedicated enough to pay a monthly fee for a single creator’s content among subscriptions for Spotify, Netflix and whatever else they may pay for, and it’s unclear from the artist profile pages how many people are signed up. A thousand fans might be attainable for John Digweed; it’s less feasible if you’re an unknown DJ who needs to pay the rent.
It’s difficult to compare what Mixcloud Select is doing with any other service, because it’s not doing what other platforms are. Rights clearance startup Dubset has made it possible for DJs to get their mixes onto streaming services thanks to a series of deals, but it’s the rights holders that get the money, not the DJs mixing the music.
The closest comparison is Patreon, where artists can make exclusive content available to people willing to pay on a tiered pricing basis. Its charges vary depending on what plan you’re on and the size of individual donations, but a creator should expect to keep 85 cents on a $1 ‘microdonation’, and $2.60 on a donation of $3. While the share is higher than Mixcloud’s, Patreon isn’t providing audio hosting or paying royalties to rights holders – a necessary expense if you’re a DJ that wants to make money legally from the music of other people.
Supplying Mixcloud Select with enough content to keep your audience interested is easy if you’re a main stage DJ or radio host. If you’re working a side job, it may become difficult to maintain that level of content. As with any platform that requires your labor to function, it’s probably wise to consider how much of it you’ll need to expend to make it worth your time – and how much your labor is worth in the first place.
Read next: How the technology behind Bitcoin could change the music industry – and help everyone get paid