Web 2.0 Screwing Musicians Over Again

The need for Web 3.0 keeps growing each day. This is something that is becoming more evident as time passes.

Many of us are aware about the censoring campaign that established social media embarks upon periodically. Every few months we see content creators with large followings having their accounts mysteriously closed down. Often the reason is not evident.

Web 3.0 solves this problem by giving people the ability to control their own account. There is no way to close down an account or delete the data once it is on the blockchain. The immutability is something that many will consider once the applications are there for people to use.

However, there is another arena where content creators are being screwed over. This is coming from another set of traditional Web 2.0 companies.

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The Change In The Music Industry

Many are aware the music business was always one of the nastiest that existed. Whatever people think about bankers, they are school kids compared to the executives at record companies. When we discuss the presence of "gatekeepers", this industry is full of them.

With the expansion of the Internet, we saw a paradigm shift. The introduction of Napster really caused a lot of fallout for the record companies. Suddenly, there was a new distribution model, that was free. The illegal file sharing of music is something that cannot be stopped even to this day.

This caused the record companies to have to adapt. Apple was in the ideal position to offer them a deal to get some of the revenues back. While it did accomplish that, the record companies lost money on recorded music for more than 15 years. They had to make it on with concert tours.

Of course, Apple, and eventually other major tech companies, made out like bandits. They were able to cut stronger deals as their distributions channels grew. The popularity of Spotify and Pandora cannot be overlooked. They also started going direct to artists.

Cutting Royalties

All of this comes down to leverage. Whether it is with the record or tech companies, artists have a major problem. They have very little leverage. The platforms have all the power since the musician needs access to the distribution channel. Without it, their reach is rather limited.

The result, over the years, is they are asked to take a smaller piece. The rates paid out go lower and lower. This is no different than what the likes of Google do, constantly reducing their payout to content creators for the clicks they generate.

With the musicians, it is time for another haircut according to Pandora, Spotify, and Amazon. They are not keen on keeping the royalty rate up.

Every few years, there are negotiations about establishing the rates. This includes the mega-tech platforms along with the National Music Publishers Association. We can guess which direction the platforms want to take the royalty rates covering the next period in discussion.

For the upcoming Phonorecords IV term, the National Music Publishers’ Association (NMPA) had sought an increase in the headline rate to 20% of a digital service’s revenue. Instead, Spotify, Amazon, and Pandora have proposed lowering the rate to pre-2018 levels, with headline rates close to 10.5%.

Not surprisingly, legal action is also involved as there is a case before an appeals court. However, the technology companies defended their actions.

The Digital Media Association (DiMA) defended the lower rates, pointing out that streamers needed “billions of dollars invested into catalogs,” in order to be competitive, and arguing that an expanding listener base would lead to more revenue that would eventually trickle down.

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Ironic they use the term "trickle down" since it was proven over the last 40 years the ineffectiveness of that economic model. Nevertheless, it is smart to utilize it since it does benefit those who are at the top. In this case, the technology companies would eat up a bigger portion of the revenues (and profits).

Web 3.0 Changes This

Here we can see a clear pathway of how Web 3.0 can alter this. While the specifics are cloudy due to the fact the applications are not developed, we are aware of the framework this can operate under.

Web 3.0 applications can host the content in a manner whereby the musician can control the product. The fanbase can offer the ability to host said content. Through the tokenization process, rewards for supporting activities can be distributed. This gives the fans a "piece of the action" while also breeding a more loyal following.

The artist, of course, is able to fully benefit from the sale of his/her/their material. We see the removal of the gatekeepers since they are no longer needed. The community can grow through the viral spread via "word of mouth". Naturally, the community has a vested interest in this since they do have a financial stake if holding the tokens.

Being a token holder could also provide a host of benefits. For example, those who have a large stake might get early access to all new music rolling out. It also could be coupled with backstage passes at concerts. The artists' token would be the main currency for the ecosystem.

As time goes by, we see how the solutions we are discussing are finding greater needs. There is little doubt the market exists for applications to provide a different distribution and economic model. What is presently taking place in the siloed system is not working for most.

Here is where Web 3.0 enters the picture. With more people being screwed over by Web 2.0, the need is only increasing with each passing day. For this reason, we need to keep developing solutions that provides an alternative model to all that is taking place.

We have the ability to pull this off. Fortunately, when the market is large enough, the rewards will be great. Therefore, there is enormous economic incentive for us all to keep things moving forward.

Not only are well looking to make the pie larger, we seek to distribute the financial benefits in a radically new way. The demise of the gatekeepers cannot come soon enough.


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