You Need to Join the New Blockchain Music Economy Before It’s Too Late

in #music7 years ago

You can stick with the traditional methods of music monetization, or you can tap into the massive opportunity of blockchain technology. The choice is up to you.


image by @atopy

The Internet and Music Monetization

When the internet emerged as a popular technology, a lot of people in the music industry were talking about revolution. The old models were being disrupted and now finally artists could take control of their own work.

The revolution was a half truth. The truth came in the distribution of information: Artists were now free to create and share exactly the kind of art that they wanted to.

But they were not free to earn money exactly how they wanted to. In this way the revolution was a lie. DIY music gained some new tools, but the fundamental feeling of most musicians remained the same: Survival as a musician is a fight no matter how good you are, unless maybe you are a winner of the major label game.

And thus, most musicians continue to follow the traditional methods of monetization for music.

The Traditional Monetization Model for Musicians

That method is simple: Sign away the rights to your music and take a loan (in industry parlance, an “advance”) to survive off of, then spend the next decade trying to generate immense amounts of income so that the financial model makes sense.

Nine out of ten artists who enter this system burn up before they make it to orbit - but for the few survivors, great rewards await.

In this model, everything has to be huge. Financial survival means earning enough money to pay an entire band (often 4+ members), while giving a huge cut of the money to other groups (label, agent, publisher, etc).

You start out $100k in the hole (er, “advance”) and only earning a 10% royalty of the income from your own work. Good luck.

The only way to win here is to sell tons of records and tickets. You need to become a famous musician. Even among the famous musicians, many only last a few years - even fewer end up in any sustainable, comfortable position with their career or their finances.

The more realistic traditional path is what the vast majority of “successful” musicians I have met do - they juggle music and work, often doing full time jobs 9 months a year just to fund the other 3 months of touring.

Shifting Perspective: From Traditional Monetization to a Beautiful New System

Here’s a thought experiment to help you use your own common sense to contemplate the future:

Think about how limited information was before, and how absurdly free it became in the last two decades.

The internet did this, setting information free. You and I both saw it happen. You used to have to go to a record store to buy a song, now you can stream any song ever from your phone, or your computer, or your fucking watch.

Blockchain is doing that to money. So imagine that kind of transition, but instead of information (media) flowing freely, money does. Allow yourself to dream of a world where money flows rapidly and easily around the world, going wherever it feels like.

Then consider that money is information, just a different form. Money is data in the form of a generic “IOU” that we all pass around to each other.

Now think about all of the music that you listen to and engage with. Think about all the songs you enjoy but never contribute financially towards - all those songs you hear in coffeeshops and movies and blog posts, that just kind of pass you by.

Or even all of those songs on Spotify, that you technically pay for, but you have no idea where the money is going. What if there is a better way?

A World Where Money Flows Like Information

Now imagine that the money flows easily where it wants to go. You love a song, and you wouldn’t mind throwing it a few cents. So $0.03 goes from your wallet to the artist’s wallet.

No accounting, no labels, no royalty splits. You just wanna support the artist a little bit so you give them $0.03 and they get exactly $0.03. Or maybe the three members of the band each get $0.01, and then the drummer gets an extra cent because you love the groove.

Now imagine all throughout the day a similar process happens - one cent to this song, half a cent to that one. By the end of the day you’ve distributed $1.50.

Of course, not all of it came out of your pocket - $1 came from Steem-powered upvotes. In this utopian future, with Steem integrated into everything, you can “upvote” anything. You upvoted your mom for $0.10 this morning because she told you a funny joke, and then you upvoted a beggar who said he was two bucks short of a bus ticket.

The other $0.50 was voluntarily tipped from your “donation” account. You didn’t have to give it away, but you ran out of upvotes and felt like giving away some more money. It’s just so easy, and it feels good to contribute.

This sounds like a nice world.

We’re going there.

In fact, we are there. Just a smaller form. Cuz if I wanted to upvote my mom, a beggar, and some musicians - I can do it. I just have to log in to steemit.com.

In the future, everything will be connected to the world’s global reward system, a little thing called Steem. Just like many people move through the internet today off of one login, usually Gmail or Facebook, people will move through their financial lives easily. Upvotes will be instant and frictionless.

Personally, I’d like to be in on the global reward system of the entire world a little early. That’s why I am on Steem NOW, working hard to build it into its mature form.

Take the Leap

The old and new worlds of monetization are largely incompatible. If you sign away your rights, go into debt, and promise 90% of your music income to the label (a “traditional royalty structure”), it’s going to be very hard to enter the blockchain world.

Blockchain is small and slow. We’re working out the details. Here’s how it feels to get involved as a “part time” content creator on Steem:

(1) Starting Slow: You’ll earn rewards here or there, maybe a few good upvotes, but it’s pocket change, beer money, not significant income.

(2) Medium level: After a few months of hard work, you are now earning $100 per week! Nice!

(3) Full-Time: Two years in, you’ve finally put away enough savings to hedge against crypto volatility. You are earning an average of $600 per week from Steem and finally quit your job waiting tables at the local pizza place.

This is a simple path that most people can pursue even if they already work full time. But it only works when you are able to keep the money you earn.

If you’re in a traditional financial deal as part of the music industry, by Step #3 in the above example, you’ll only be personally earning $60 per week while the label pockets $540. They will offer to loan you another $100k to run ads and try to become a “Steemit Superstar”… good luck.

The most unfortunate person in the music industry will be the last one to sign a traditional major label deal before the world finally moves towards Blockchain as its main monetization mechanism.

The luckiest and smartest ones are already joining Steem and other great projects (LBRY, Musicoin) like it.

Which side are you on? It’s not too late to be an early adopter to Steem.

Leave a comment and let me know what you think if you want to talk more about this, I try to make time and respond thoughtfully to as many people as I can.

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I'm right there with ya. . . building up a presence and following here on Steem, interested in cultivating this community and excited to see where it goes for everyone!

So far it has been fun, and pretty rewarding as well! Just starting out, though :-p

Using this platform more also probes my creativity and drives me to be more productive, so that's another perk of it all!

"Using this platform more also probes my creativity and drives me to be more productive, so that's another perk of it all!"

ULTIMATE. How many times do you hear people say this about Facebook? This is the secret weapon of steem, and it works alongside the monetization, not against it - so good

right! the potential is incredible :-)

Ive been told about this site for a while now, and I wish I joined sooner, but very happy to finally be here. So far it has helped me connect with new people and musicians I would not have met otherwise, and I really think this platform is going to take off, for many types of artists.
Ive been telling all my musician and artists friends to get involved now, some have, some have not... but I like seeing the community grow.

Years ago I was in a band, and we were offered to get onto a label after playing a few shows on a tour with certain band that was head of the label. Another band on the tour, also on the label, talked to me later that evening and told me some horror stories they have gone through because of being on that label, and told me it was in my best interest to not take the offer. A band mate of mine got so mad at me afterwards for declining it, without taking into consideration the suggestion of the other bands (2 actually) advice, and after time, it was a main cause that eventually broke the band up.
This platform seems like a good idea so far, though the limit of income on a track after 7 days feels a bit off to me. I also hope that there eventually may come some sort of menu bar on @dsound with categories for genres, and maybe a way to bring up similar artists after a track is played. Off to an amazing start though!

I have already found out about SO MANY amazing artists on here, that alone is worth my time here.

Resteeming this, its a great push!

Completely agree with you that @dsound should add more categories / improve the browsing features of the site. hopefully they are thinking about those things. Thanks for sharing your story about your band and the label, rough break there, hopefully Steem goes better for you. Cheers @armageddonparty

@heymattsokol, great post bro. I am a musician, a bit older now, but I agree the blockchain can and will disrupt the music industry. I was looking into D-Sound and considered uploading older music on the platform.

Corporate greed is killing music and the blockchain can bring back artistry and allow the artist to develop. I resteemed this fantastic post!!!

I’m all for steemit and musicoin. I think they provide a huge opportunity, but not in the sense you describe. It provides a new income stream for independent musicians.

The problem isn’t necessarily the labels payment plan. An advance is only a loan against possible earnings so if you don’t earn anything else you get to walk away with your advance not owing anything. The biggest issue with mainstream music is who gets signed and who gets the record deals. It has nothing to do with talent and everything to do with vitality. For instance the catch me outside girl got a record deal. Not because she was talented but because it would sell records or at least top charts.

Most smaller labels don’t even do advances and artist signed to these labels tend not to make enough to live off of.

Also record labels are still useful for financing and facilitated the pressing of an actually record. Despite being on the blockchain I wouldn’t mind a record label deal as well, it would be nice to have my music on vinyl. That said I can make enough music to go around and I’d never sign off exclusive rights to my name it’s anything like that.

Anyways just my two cents.

Good point here I am glad you talked about it so I don't have to type, I am also believer in doing both things most of the time and its just the case here, old system suck but hey we still drive on fuel :P

In theory yea if you can take an advance, default on the loan, and walk away unscathed that would be fine. Many artists end up trapped in these deals for years though, often losing the most promising years of their career (i.e. their mid 20s to mid 30s) trying to get free of contractual clauses that block them from releasing new music and stuff.

You can get your music on vinyl without signing a label deal btw! It's "save up for a while" expensive, but not "I need a cash advance of tens of thousands of dollars" expensive.

Yea it’s definitely possible to end up in a bad contract if your not careful. But the advance is a royalties advance, so it’s not a loan. You can’t default on it you just don’t see any additional royalties until it’s paid off. Your under no obligation to ever pay out of pocket to repay an advance for a recording contract. If your album doesn’t sell your financially better off for having received an advance. That said again it’s possible to get stuck with a bad contract, one you shouldn’t have signed. This article does a good job of explaining the ins and outs of a record deal. https://www.soundonsound.com/music-business/recording-contracts-explained

Super post Matt, it is indeed an exciting time. If only I had had Steemit when I was a kid -- I would have convinced my parents to upvote my homework and report card -- what a world that would have been ;-)

These monster labels will have a tough time, but I suspect the smaller niché labels will have something to offer even with blockchain.

There's is a level of trust, service, experience, and management services that are useful to musicians -- freeing them to concentrate on making and writing music. But I do agree with the thrust of vision, and now is the time to act.

Ya hopefully more niche labels / new "labels" that are built around this technologies will emerge... that would be rad. I've seen a few people with their kids on steem btw, it's a cute idea although perhaps kinda tricky with the giant uncensored melting pot aspect of Steemit right now.

Does it really take 2years to start generating decent income from Steemit? I got 4 months of budget left that supports my full time musicianship and I just joined Steemit:) unless crypto moons in the near future... though it looks rather like a deep dive at the moment...

Well it depends on a lot of factors. I think for most people, especially ones who are going to start by "dipping their toes in" so to speak, two years is realistic. But I've been here for 1 year and 1 month and I'm already full time on Steem so it doesn't have to take that long.

Sounds encouraging! I’ve been here active less than a month and made around $250 which is nice :) but indeed a part of it goes to SP so it’s not all immediate money... plus the volatility of crypto... anyway, I have some ideas I want to implement here so who knows, maybe they bring enough value to the community that it will reflect in my bank account, too. I just wish there were groups on steemit. It’s hard to sift through all the content to find really valuable stuff. Thanks for sharing your thoughts!

You are welcome!

Great article! There is a lot of potential in this kind of idea. It is hard to believe that it is already a few years old and I am just hearing about it now. Hopefully it takes off and we can see artists start making a real living!

"People With Passion Can Change The World" Steve Jobs!

I am your site Matt!! :)

Hey I didn't see mention of DSound!
https://dsound.audio/#/@ozwald

Dsound is great! It is one of my favorite Steem platforms.

Yes, I think Soundcloud may be in trouble (and they already weren't doing so good)! Even if DSound doesn't last, the idea can't be stopped! :D Artists will be freed from the recording industries prison.

This sounds like a nice world.

Well, personally I would rather have a world without beggars than one where I can tip them electronically. I like the way your thinking, but this sound an awful lot like the Black Mirror episode "Nosedive".

Suit yourself, I enjoy being generous and giving a buck or two to people who provide quality entertainment.