Episode 87 – Ghost of Music Industry Future

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The Story:

1999, nearing the dawn of the millennium. Developers Shawn Fanning, John Fanning, and Sean Parker gave birth to Napster, and on this day music was set free. As the Internet has developed – faster download speeds and cheaper access, record labels have been forced to seek solutions, trying to fit their old ways of business, into a new world of technology, and minimise falling profits. The latest and favoured avenue for music consumption has become online streaming, which has made all music on a wide scale available thanks to the likes of Spotify, Pandora, and Apple Music. The craze of having the latest music at your fingertips and instant access to your favourite jams.

This is all part of the surface illusion, as the artists are still sold short, still not adequately compensated for their creative works. Behind a complex system, with a careful formulae to direct and nudge the tips, money doesn’t go to the artists that you listen to – at least, not the way most would think. There are flaws in this streaming system; a customer is paying for a service and receiving a service – but one must consider:

The payment algorithm – How is the balance of fans vs plays?
Mathematical calculated – How are artist royalties decided?
Your choices – Do they count, and do you matter?

Amongst these issues, the major flaw in the “big money pool” – the way most streaming services distribute the revenue – is that it is does not distribute the money fairly amongst the artists. The system is being gamed and hacked. Active corruption plays a role in the form of click fraud – where the competition of fans vs clicks takes place. The system is manipulated to serve a targeted minority. There are other methods to manage streaming revenue distribution, such as stream payment VS subscriber payment. However, as long as the music industry is centralised and under control by large labels, these issues will remain inherent to the music industry, with fans and artists scrambling to find ways to publicise this plight.

Technology shifts are here again to change the game, providing the answer and guiding an alternate form of online distribution. The new Internet, powered by blockchain technology, will give ownership back to the artists and expand options for consumers. Artists understand that they are also the entrepreneur, in control of their brand, marketing via alternative media, personality via social media and responsible for their revenue streams. Startups such as Baboom and Peertracks are taking advantage of artist value, market needs and the technology, providing the answer to this industry fault. Baboom promotes fair-trade streaming combined with an online music store, they pay artists 90% of the revenue directly and support a paying artists for fan subscription. Peertracks will utilise the blockchain which will allow artists to connect with fans, by giving the fans the chance to trade unique tokens – a form of currency which can be used to fund albums, and buy concert tickets and merchandise from that artist, and to hold a share in the artist’s success. Companies that support a direct relationship between artist and fan will gain traction, allowing artists to independently build an income stream which reflects their real popularity. These interactions will create communities and ensure that artists remain inspired and supported in producing and giving to the world.

Join us as we explore the technological vortex which could lead to a whole new era of creative genius on the next episode of … The Paradise Paradox!