Taking a cue from Bandcamp, SoundCloud has announced its inaugural Fan-Powered Friday to celebrate the one-year anniversary of its fan-powered royalty payment model. The streaming platform will match 100% of the revenue earned by each artist on Friday, April 29th, doubling their payout for the day.
SoundCloud launched its more equitable payout system last March to artists monetizing through the service’s SoundCloud Premier, Repost by SoundCloud, or Repost Select programs. It distributes each listener’s subscription or advertising revenue to the artists to which they listen, rather than pooling the money to every musician on the platform like streaming platforms such as Spotify.
According to SoundCloud, 135,000 independent artists are now benefiting from the system. This means 35,000 independent musicians have signed up for the platform’s monetization program over the past year, with 97% of fans directly contributing more than $5 to a single artist. SoundCloud adds that independent musicians earned an average of 60% more than the traditional payment model in 2021.
One of the many shortcomings of the Loud & Clear transparency report Spotify released last month was the streaming giant’s continued reliance on a “streamshare” model, which pays out royalties based on an artist’s share of overall streams across the platform. This system leads to part of a subscriber’s fee being paid to musicians to whom they haven’t listened and motivates artists to game the system in order to rack up the most streams.
However, it’s worth noting Spotify announced that 15,140 artists who self-released their music on the platform reached $10,000 in earnings from their respective catalogs. These musicians only had to split this revenue with the platform itself and distributors like DistroKid.
SoundCloud didn’t share any earnings numbers today, but they are competing through their more favorable royalty payment model with a catalog of over 300 million tracks. Fan-Powered Friday will draw more attention to the initiative from both musicians and their fans alike — while also giving artists the opportunity to pocket even more money on Friday.