The music industry has experienced a new lease of life with global recorded music sales totalling $15.7 billion in 2016. About 50% of this revenue is squarely due to the increase in popularity of streaming services such as: Spotify, Apple Music and Pandora. If 50% of an entire industry’s revenue is generated from digital channels alone, then I as an artist would rationally assume that this is where I would make most of my living. However, in 2016, digital streaming service Spotify, paid out rates of $0.00437 per stream to artists. This means, artists would need to receive streams in the hundreds of thousands just to make minimum wage. This may be an easy task if you are a superstar like Taylor Swift, Rihanna and Ed Sheeran, but a notoriously difficult one if you are budding musician just starting out.
In this article, I will explore some of the dubious working practises of the music industry that disadvantages music artists, writers and the fans alike, and how one ICO, Potentiam, is working hard to level the playing field.
Once you understand the general structure of the music industry, it becomes immediately clear why music artists earn as little as they do.
This image represents a layout of how the music industry is organised, and upon seeing this image, one word comes to mind: Middlemen.
Middlemen are the intermediaries that lie between an artist and his/her listeners, with each middleman trying to add value in their own way. For example, a manufacturer’s job is to create duplicate versions of an artist’s recording, whereas, a distributor’s job is to get that recording into the hands of the listeners. However, the issue with this setup is it heavily disadvantages the music artist. With each middleman that exists, that is another piece of the pie that has been taken away from the musician.
The immediate objection to this is: “Well, the musician knows exactly what their getting themselves into and so cannot complain”. However, it misses a critical point. It fails to acknowledge the lack of autonomy that has been forced upon an artist, which therefore leaves them no choice but to rely on middlemen. To perfectly illustrate my point, consider the scenario that you are periodically required to send money back to your family in another country. In-order to make this payment, you must rely on a middleman, in this case, a bank. This bank charges a fee for this service, a fee that has been known to reach as high as 10% in some cases. In this scenario, the same argument of “I know what I am getting myself into and so cannot complain” can be made. However, I argue that simply because of a lack choice, a lack of autonomy, I am forced to use a bank to make such a transfer. Conversely, with cryptocurrency and blockchain technology, I no longer have to rely on a middleman to make this payment. I can instead send my money in a cryptocurrency directly to whoever I choose, without the need of incurring large fees.
This is exactly what the ICO, Potentiam, is seeking to do within the music industry. They are working to give more autonomy to music artists, writers and anyone else who inevitably becomes disadvantage when they decide to pursue a career in music.
Music to My Ears: Potentiam
Potentiam is a decentralized & incentivized music platform that aims to bring music creatives into direct contact with their target market. Through the Potentiam platform, creatives can fund and promote themselves without the need to rely on middlemen. Through Potentiam tokens (PTM), there becomes an economic incentive for new users to stay and use the platform. This translates into a much stronger community that artists can then leverage in-order to promote and fund themselves.
Creators can also crowdfund on the Potentiam platform through what are known as “Decryption tokens”. These tokens are exchanged for raising project funds which are then required to access the content of a creative. This has the advantage of providing an alternative way for music artists to fund themselves, therefore giving artists the autonomy that they so desperately desire.
In addition, the team at Potentiam have numerous years of experience within the music industry. They have an intimate understanding of the issues that the music industry faces, as well as the solutions required to solve them. Having already founded the music publication, Britznbeatz, a publication with over 150,000 subscribers, there is no doubt that Potentiam is the team to give creatives their autonomy back.
You can find out more about Potentiam and their technology here.
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