Yesterday’s earnings release from Spotify was a case of unwelcome news once more for the world’s leading digital music streamer.
Whilst reporting that it had increased its user base by a further eight million – an impressive figure which takes the total number of users worldwide to just over 180 million – Spotify once again nonetheless reported a net operating loss, amounting to a painful $90 million.
The impact will likely translate to yet another squeeze on artists’ earnings from one of the world’s
largest music platforms.
Music has become, it seems, a broken industry with artists regularly complaining of a lack of control over their own work, an absence of transparency on earnings – particularly those arising from partnerships between labels and distribution platforms – and of middlemen who cream off much of the revenue without offering much value in return.
The Spotify announcement is another sign that the industry is ripe for disruption, and one which “blockchain tech can fix in a way that brings benefits to all parties,” states Justin Blau, speaking to ICOExaminer in his capacity as a music producer as opposed to alter-ego DJ 3LAU, a pioneer on the electronic dance scene and the man behind the world’s first not-for-profit dance music label.
Blau asserts that “major music services and new competitors will embrace decentralization over
the next few years,” as we are presented with new blockchain-inspired economic models that
grant transparency for artists.
One such model has been proposed by Tamir Koch, CEO of eMusic who has now decided to launch an ICO
that, he hopes, will finance a new worldwide platform which sees music producers and consumers enter into closer collaboration, facilitated by the P2P nature of blockchain technology.
“Artists aren’t being compensated fairly for their work under the current model, and Spotify
continues to bleed money due to unfavorable royalty payments and licensing agreements with music labels,” Koch says. “The direction the industry is heading in simply isn’t sustainable.”
Koch’s is the latest in a number of projects to lay out a blockchain-based plan to reconquer music. And these new challengers have not gone unnoticed by the industry’s giants. Spotify has itself acquired Mediachain, another blockchain outfit which has set out “to solve music’s attribution problem,” according to TechCrunch.
There appears, then, to be general recognition all round that music has a problem and that the Blockchain may be the solution. The question now is whether existing industry giants will be successful in fending off blockchain-based solutions offered up by those representing the interests of artists.
And that, it seems, is a question that will now be answered by music lovers themselves.