Okay, I am a bit nervous about this one but I wanted to share more of my thoughts on the current state of the music industry and the solutions Web3 is offering. So let’s start with one of the biggest problems we face at the moment: streaming.

To stay afloat in the early days and build their library, Spotify had to make a deal with the devil. Or in this case three. The major labels. They obviously negotiated a pretty sweet deal[X] for themselves: they got a great deal per stream they generated, an advance, and a share of the revenue Spotify would make. On top of that, they were guaranteed a minimum revenue. Next to this sweet sweet deal, they own a significant part of Spotify[X]. They hold the power.*

And now for the truly insidious part, they push their own music on the platform to generate revenue through the playlist as they own the companies that make those playlists[X]. So they saw their income declining in the ’00s and needed a way to compensate and when Spotify came along they found a way to funnel subscription and ad revenue back into their pockets by pushing their music and paying themselves royalties.

And now Spotify is all in and keeps squeezing money out to keep their shareholders happy.

Recently they announced that they won’t be paying out royalties anymore to artists with tracks that get less than 1000 plays annually[X]. It wasn’t much to begin with but they just decided to stop paying. Before, the royalties might accumulate and so if over multiple years you would reach enough royalties for distributors to pay you out, you would get the royalties, albeit a bit later. Not anymore Spotify decided.*

Are you getting this creepy feeling too that music artists are not very much respected by the platform that says they are “giving a million creative artists the opportunity to live off their art”? LOL

We need a system that’s fair to everyone and not for the few executives that run the show. Web3 promises to fix the problem described above with the opportunities that smart contracts offer. The artist decides what someone pays if he wants to stream their music and if they don’t pay, the stream simply doesn’t happen.

Spotify, for now, has the advantage of having the majority of the audience but we can start experimenting with tools like Sound.xyz, Serenade or NEWM alongside having your music published on big streaming platforms and I am sure we will find out soon enough that there is a way where artists get compensated fairly.

What are your thoughts on this? Curious to know what you think!

R