In this article, we will talk about how the music industry is evolving in the digital economy: about the problems of musicians and publishers; about the relationship of justice, copyright and the Internet; about lawsuits, conflicts, victories and ... about the interests of the audience – does anyone take them into account at all?
Before the era of digital devices and broadband data channels, the music industry was comfortably numb. Musicians got their royalties from producer companies and publishers who made profits by selling records and tickets to concerts.
The formation of a new star was a standard and almost technical process. Producers and managers found a talented musician, invested money in his or her promotion, worked carefully on the image and repertoire, advertised well, and then received legitimate profits, returning investments and multiplying them. For those musicians who did not fit into the standards of record labels and production companies, there was an individual niche – the underground. Here a musician could shown off and express his atypical and non-template behaviour, originality and challenge the "system".
Such a presentation often justified itself since the request for rebellion and outrage is always in demand with some groups of listeners. In the end, the most successful of the rebels were still under the protection of show business tycoons and were involved in the process of making profits.
The locomotive of the music industry rolled along the rails of well-established and up to a cent calculated business processes. The emergence of recording music players, recorders with a magnetic tape, didn’t add much concern to the ranks of the deals of show business. Copying tapes and reels was a troublesome and long process while the quality of the copy was much worse than the original. In addition, the durability of the films leaves much to be desired since over time, the magnetic layer crumbles, the tape crumples and breaks – the industry has not felt threatened.
The threat to the opportunity for copying and distribution favorite music tracks emerged a little later, and it was CD.
In the 70s of the twentieth century, there emerged the first prototypes of players that could read data from disks using a laser beam. In 1982, Philips and Sony started commercial sales of CD equipment. The world began to look closely to the CDs.
And the first CDs we designed for music. According to a beautiful legend, Sony decided that every CD should contain Beethoven’s Ninth Symphony. Meanwhile Philips had everything needed to produce 115 mm CDs, and Sony shouldn’t allow excellent competitors to use the newest distribution of the current 120mm CD quality standard with 74 minutes of audio recordings. That was the duration of the Ninth Symphony in one of the performances.
Subsequent events soon made a single picture like jigsaw puzzles. The first music albums distributed via optical disk emerged, and computers were developing in parallel, and the Internet was born. In the configuration of personal computers, CD-ROM drives emerged, with the help of which one could both listen to music and read data. The researchers of the Fraunhofer Society developed the MPEG 1 (2, 2.5) Layer 3 format, and Metallica, after their best career albums “And justice for all” and “Black album”, suddenly felt like gods from Olympus, punishing and pleasing their followers.
Blockchain soon! Still, for the time being, it’s important to understand the situation in the world of music in the 90s of the 20th century and the zero years of the 21st century.
The digital age has come into its own. The power of computers grew according to Moore's law, the Internet spread, application programs and web services became more diverse. For many users, it turned out to be a very convenient way of storing and listening to music recordings, copying them and recording on various media: optical discs, computer hard drives, music players.
Publishers began to imbed systems that impede copying into CD and audio equipment. However, for every new ingenious protection there was an equally intelligent hacker, opening up the opportunity for the buyer to dispose of the purchased goods again. Representatives of the music industry talked about the fact that MP3 and file sharing networks are killing their business.
The music sellers (as well as films and other products spreading in the “figure”) have realized: it is necessary to forbid customers to dispose of the purchased goods. It is necessary to introduce new forms of ownership: when the buyer seems to have purchased the product, but he has no right to do anything with it (except for the specified actions). The anti-piracy flag was raised. A user who copies a music album from a CD to a hard disk has been declared a gangster.
At this point, the victims appeared: Metallica and Dr.Dre, with their lawsuits against the Napster file-sharing resource and the users who downloaded their tracks. Napster didn’t survive, while other similar services followed, and there came a complete victory of good guys over common sense.
The subscription music access services saved the situation. The most famous of them are probably iTunes (now Apple Music) and Spotify. Suddenly, it turned out that it is much more convenient for listeners to buy records selectively or to get access to a multitude of tracks paying a monthly subscription for instance. Talking about thieves, copying the records of stealing the poor representatives of the music industry, they took a back seat.
In iTunes, for example, by the end of 2008, the copy protection mechanism that was previously integrated into the service was deactivated — it became meaningless since it turned out that customers need something else. Much more important than copying and distribution was the ability to receive the most diverse content for a reasonable fee.
One might have thought that now everything in the music industry is getting better: disputes, lawsuits, persecutions, pressure and resistance are no longer relevant. Well, it’s not and the pendulum seems to have swung the other way: now the musicians are increasingly speaking out against streaming services, accusing them of extremely low payouts for their compositions.
According to Statista, in 2018, streaming services served about 250 million US users each month. According to previously published data, most of the profits generated by these services are taken by the giants of the industry – the owners of the musical rights. The Taylor Swift demarche was widely known, she left Spotify and removed her tracks from the catalog of this service. The following data was cited: for 46.3 million plays of her song, the reward was 390,000 dollars. According to CNBC, for 1 million plays, the artist receives $7,000 from Spotify and $1,650 from Pandora.
Choon. The service, created on the basis of Ethereum. Its appointment is “solving the fundamental problems of the music industry,” as stated in the About section of the site. Choon is a streaming service that operates with smart contracts. Musicians who have placed their compositions in it receive payments that make up 80% of the income received from the broadcasts.
Resonate. A service in which users pay to listen to the track: less when they get acquainted with the piece, full price when they play the song they like again. Musicians are paid a reward of $0.006 per song. The calculator on the site shows that for 500,000 plays of the track, the artist’s profit will be $7630.
Ujo. This project also works on the Ethereum platform and operates using a smart contract system. The base of musical compositions and ownership rights is recorded in the blockchain. Each musician, having placed the works, has an opportunity to regulate their distribution. Payment by users of compositions is possible exclusively on the air, rewards to musicians are also made by Ethereum cryptocurrency. The service works using one of the browsers: Brave, Chrome, Firefox with the plugin installed – the Metamask cryptocurrency wallet.
Musicoin. This is a blockchain platform that has released its own MUSIC tokens – they are used to pay for the musical works in which it is placed in the system and to receive rewards for listening. The platform does not receive commissions, the track author receives 100% of the profits.
BitSong. This digital decentralized streaming platform that divides the profits between the musician and his listener. The project token BTSG is designed to reward users for listening to an advertisement, which the author of a song can place along with the track, and to support independent musicians at the request of the listeners.
However, the problems and shortcomings of this solution are very similar to those enthusiasts of decentralized technologies face in most other industries. With all the benefits, both ethical and financial, in order for the services described in this article to get a chance for wide distribution, there is little recognition of the injustice of the existing system and the moral superiority of the new one.
These services should attract musicians and listeners. It must be a mass movement. And as practice shows, for a larger number of users, their habits, convenience and immediate benefits are more important than all other characteristics.
Image courtesy of Single Grain