Spotify & The Freemium Model
It's likely that you have heard of popular music streaming site Spotify where, at your fingertips, you have millions upon millions of songs to listen to, curated for you by some clever algorithms! You can even listen to these for free as long as you're willing to grin and bear a few adverts on the way. If you want, you can always pay for the premium subscription to remove ads and have "uninterrupted listening".
This type of subscription model, called "Freemium", appears to be the norm with many entertainment platforms where you have a free account with ads/limited use or pay a monthly subscription and have unlimited access to everything on that site.
Good deal right?
For the listener, seemingly so, as long as you're willing to have a constant, monthly expenditure on the fee but for the musicians whose songs are on there... not so much. In fact, you could argue that the listeners could even have more but will get on to that later.
There are other music streaming sites such as Pandora, Apple Music and Deezer all looking to get a share of the pie but Spotify is out in front at the moment with nearly 300 million monthly active users and a market cap of $26.9 billion in May 2020 [Source]. With the current pandemic as well, those numbers will likely go up but can it be rivalled and is there room for blockchain music streaming sites to compete?
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Blockchain & Music
I've been floating around crypto now for nearly 3 years and have seen a few projects float about that are trying to address a few issues in the music industry such as Musicoin, Choon, Dsound, Emanate, Bitsong (there are many more but I'm only one person with limited resource)!
Of course, the main point of view from musicians is that music streaming royalties from sites like Spotify are grossly unfair with around $0.00318 per stream being paid out (funnily enough, Amazon actually gives the highest per stream of $0.01 per stream) [Source] from mostly ad revenue.
Label Middleman
When you break it down, about 50% of what Spotify earns goes to labels who then filter that down to the artists. 87% of music streamed is actually only from 4 labels (Sony, Universal, Warner, and Merlin) [Source], which just leaves the other 13% scrapping for streams and revenue from their own labels but one of the issues that blockchain sites are trying to address is the "label middleman".
By removing the admin work of distributing things such as streaming royalties and replacing them with so-called "Smart Contracts", the cost and time associated with that would, in theory, be removed. For the label I co-run, we receive royalty statements 3 months in arrears from our distributor and so it's never up to date.
Then you have a minimum amount you need to build up in the bank to withdraw and then send to artists so I'm all for the instant streaming royalties being distributed and taken care of by the blockchain. It would save us a lot of time and knowing that every stream is recorded and immutable on a blockchain!
Streaming Pay
For me, getting any royalties back from my productions is a bonus as I've always considered music production a hobby and I'm grateful for everyone who does listen in and checks out my music! But for others, the streaming royalties are big talking point with these blockchain sites, particularly when slogans such as "fair pay for musicians" are branded about the place.
Although it's hard to tell if that's the right choice of words for marketing. It might attract those with the long term mindset (it did for me with regards to posting on HIVE) but you may also just get a load of people who will look to game the system like what happened with Musicoin, Choon and others. However, the money has to come from somewhere and without listeners or an audience, why make music in the first place...
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Sustainability
This is where some serious consideration needs to be made on how the platform will be sustainable for all involved. We've seen with LEO a model of burning tokens and ad revenue have created some sustainability but last year when I was more actively involved on the crypto music streaming sites, I didn't see such a thing. It was more, "let's get our token listed and hope for the best". Sadly, doomed to fail.
Creating a demand for the token to buy/download tracks or merchandise through the site using it would be a good start. Another way for token use could be for musicians to spend it to promote their music or for listeners to receive tokens for listening to a 1 minute “highlight reel” featuring multiple tunes based on their tastes. You could even have a freemium style subscription model using staked tokens to unlock Premium at a certain level... It’s nice to brainstorm!
But, it needs to be said that streaming is just one of the many ways to add to the tributaries of income and building a long term mindset where you engage with your audience is something that should be done anyway. When you're entering this new decentralised world, the onus is on you so do what you need to flourish.
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Current Blockchain Music Sites
I’ll be keeping an eye on the following two music sites as I’m more familiar with them both. The crypto space is still relatively small and you see a lot of familiar faces in between projects but once I dive a bit deeper in to them, I’ll write a few overview blogs.
Emanate seems to be slowly but surely building something that's starting to resemble a music streaming site, not just for musicians but music fans as well. Almost how LEO incentivises curation, monetizable playlists are going to become a thing for the listeners to get involved with and feel like they are contributing to their favourite musicians journey as well. Although I have to say, getting yourself set-up with an EOS account and connecting it to Emanate can be a very difficult challenge!
ROCKI is a relaunch of Choon with a new token model that is claiming to be more sustainable but is still very much in an alpha build, pre-registration phase at time of writing. They say they will focus on the listener experience first and foremost which will be interesting to see although with a lot of independent musicians wary of the previous antics of Choon, it might take a long time to regain trust.
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Conclusion
In my (beginner's) opinion, there's still a long way to go before we start seeing a "web 3" equivalent in music streaming services starting to threaten the streaming market but it's promising that there are projects out there looking to develop. As I saw from a video on LEO the other day, we are still very much in the "early adopter cycle" which means that any project is going to be fraught with technical pathways to use the site and that puts a lot of people off.
I hear it all the time when I talk about cryptocurrencies to people who aren't in to crypto, "It's too complicated" and "Why isn't there a simple withdraw to PayPal button?" Well, for those of us who are patient, don't mind learning and want to take the time to get involved with the projects early on, it can be quite rewarding to be a part of something that's trying to disrupt or at least provide an alternative to what we're currently being offered. In any case, I'll keep you posted!
Are any blockchain music streaming sites catching your eye at the moment? Do you think blockchain can improve the music industry for all or is beyond repair? Let me know in the comments!
Nicky