It’s not a secret that covid pandemic hit the musicians hard. Although even without the pandemic upcoming musicians or those that decided to work independently without huge music labels’ support used to struggle with finances. Independent artists who fund the entire production process and their own marketing, are facing difficulties always. Especially during a pandemic when live music is canceled.
It’s well-known that music streaming services, such as Spotify, Tidal and Apple Music, don’t pay artists much when somebody streams their songs. In fact, according to headphonesty, to earn $1000, an artist would need 100,000 streams on Apple Music, around 300,000 on Spotify, and over 900,000 on Deezer.
Now, with the new streaming service built with blockchain technology, Tune.FM, which is combining music streaming and payments in crypto independent artists can get paid and grow their money as the tokens. This model could completely revolutionise how independent artists are paid today and in the future, and help build a new sustainable model that will disrupt the existing industry leaders.
Artists have, for decades, generated revenue from their music from two key sources; sales and live performances. According to a 2019 Forbes article, performers generated around 75% of their income from live events and tours, compared to less than one third in the ’90s. This demonstrates how far sales have fallen for artists, and how much more they rely on live gigs.
Buying music has all but disappeared in the lastdecade with the emergence of streaming services. Most of these services like Spotify, Apple Music, Deezer, Tidal and Amazon don’t have a fixed “pay-per-stream” rate when it comes to paying out music royalties to artists. There are lots of factors that determine how much money one stream is worth in royalties. The main factors include the listener’s country and location, whether the listener has a paid subscription or free account, the specific artist’s royalty rate and the relative pricing & currency in different regions.
Is crypto the way to ensure independent artists get paid a fair rate for their work?
Just like NFTs seek to democratise the artworld and help artists generate income and royalties from their creations, streaming services based on blockchain technology seek to do the same for musicians. An example is Tune.FM, which combines music streaming and payments in crypto in a fully tokenized music economy.
Musicians can publish their music on the decentralized Web3 marketplace for free, and also mint NFTs for their fans, while listeners pay in the native JAM token. Importantly, the platform is non-exclusive so artists can pursue opportunities elsewhere. The Hedera Hashgraph is the digital ledger powering Tune.FM, which is faster and more cost effective than Ethereum, which makes micropayments to artists economically viable. This model could revolutionize how independent artists are paid today and in the future, and help build a new sustainable model that could challenge the existing industry leaders.
These tokens can be traded both by retail and institutional traders on exchanges so that if interest in the projects gains momentum as users migrate from Web2 services, artists could benefit from the growth of the value of the JAM token as well as being paid more of the revenue (90%) from the stream than with traditional intermediaries. The music industry may look very different in a few years if these new models prove successful.
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