Can Steemit & The Blockchain Kill Spotify?

in #music7 years ago (edited)

Hi! I'm Benbrick - a Platinum-selling songwriter fascinated with new technology.

My article on how I connected with Ricky Gervais hit the #1 trending spot on the front page.



Today, artists premiere songs on blogs that generate $ but pay us 'exposure'. We upload to a myriad of streaming services for visibility even though we'll only average 0.0020 $ per stream. Our work is monetised with adverts on YouTube which are not always distributed back to us. The infrastructure is simply not there to manage the data and ensure creators are paid fairly.



One of the more outspoken critics of the rate songwriters receive is Aloe Blacc. He cowrote the Avicii track "Wake Me Up" which quickly becomes the most streamed song in Spotify history. It was equally successful on Pandora where the payout for the 168 million Pandora streams was just $12,359. Aloe wrote the track with two other people so that 12k was further diluted. The effective streaming rate: 0.00007$ per stream.

This article is not trying to say that music streaming does not generate money - more that the correct systems are not in place to ensure a fair distribution to the songwriters.



The rates paid out vary so wildly and in personal experience can often take years before you begin earning for a piece of music. The blockchain would ensure all information is correct and all payments are made instantly, fairly, and most importantly transparently.

"The back end of the music industry is just a nightmare... It gets so complicated, even more so with digital services. People don't know who to pay." - Allen Bargfrede, Professor of Music Business at Berklee



In terms of ownership every song is split into two parts - the composition and the recording.

The composition is the song itself - the melodies, the chords, and the lyrics. The songwriter usually assigns this to a record publisher to collect/distribute royalties. The recording side (more commonly known as the master) is the actual finished recorded version of the track. It is usually owned by a record label.

This distinction is very important - the deals made with the various streaming services are heavily weighted in favour of the record label at the expense of the publishers and writers.



A lot of bad press gets heaped upon Spotify, but in their defence their website very clearly lays out how they distribute royalties and how 70% of all money is given back to right holders.

Apple very recently released a proposal to simplify songwriter payments. The New York times said, "the proposal would significantly raise the rates that Spotify pays."

The New York Times article does not tell the whole story: Apple's proposal to pay 9.1 cents for every 100 streams would leave to an effective 0.0009$ per stream. This is less than Spotifys average payout of $0.002.



If you're still reading, then congratulations for sticking with it. As you can see it's very murky and complicated. There are a couple more bits to bear in mind:

Streaming favours big labels: A big label has a big catalogue of songs. Your Spotify royalty is worked out as a % of the total number of streams. (source).

Confusion over licenses: Universal music has just agreed to pay $11.5 million to settle it's ongoing dispute over royalties. It had been claiming a bigger % of net receipts by treating digital downloads like old fashioned sales. In an era of digital downloads they had been claiming for things like physical CD packaging. (source)

Equity stakes: According to The Guardian the major labels own ‘close to 18%' of Spotify. It makes it easier to see why the streaming service has less power to change the rates paid through to songwriters when the labels have that much influence.



The licensing deals Spotify signed with the major labels have up until now been clouded by nondisclosure agreements.

In 2015 The Verge obtained a contract between Sony Music Entertainment and Spotify. The contract uploaded in full (but since removed) detailed just how favourable the major labels deal with Spotify are. Key highlights are mentioned below:

  • Sony will be paid a $25m advance over 2 years. There is no stipulation over what they do with that money but as reported in The Verge article "labels routinely keep advances for themselves".
  • Sony is guaranteed a better streaming rate of 0.00225$ per stream which can jump to 0.0025$ if Spotify misses targets.
  • Sony will be given free advertising slots worth up to $9m at 'heavily discounted rates' and a further $15m at a further discount. There is no stipulation over what Sony does with this space so they are free to resell advertising.



Utilising blockchain technology will clear up the mess surrounding songs and their corresponding rights. Payments can be made quicker and more transparently as there is currently no centralised database. Whether it can affect the rates paid through to writers remains to be seen. There is a fascinating article here by Benji Rogers detailing a proposed .bc format.

Spotify et al. have massively cut the illegal downloading of music but current rates are not in the best interest of the songwriter. I believe Steemit provides a fascinating alternative. I plan to curate my artists, record exclusive videos from my London studio, and share them here. I'll split revenue with the artist, and use a % of it to advertise videos on YouTube.



I believe we can build a front end music portal. Streaming and downloads would be possible - paying and earning Steem for listening, sharing and downloading. I'm interested to hear any further ideas anyone has on how we can begin this process.

(Image sources)



Streemit is gonna take over the music industry and empower artists. Its only a matter of time.

How the middle man can survive if you win this war?

Nice write up.

Aurovine ( a platform that has mostly gone under the radar that I believe will be a strong contender in this market. AudioCoin (ADC)  is the blockchain that supports it.

Worth a look.

i just signed up. I need to find a second to really get into it!

i just signed up to, what should i do

great post! would love to see some more posts about music on steemit!

thanks oz! Please follow for more.

My music is on It is a cryptocurrency based music platform. You can get paid by paypal or audiocoin. I really enjoy it!!! I'm in the process of uploading my entire back catalogue here after taking my albums off of tunecore

We are actively working on this @thisisbenbrick

We had to pivot to de-bundle our two in one product (confusing pitch!) and we are releasing a fan engagement platform first - called Troopeers. Followed by what you describe - called PeerTracks. Let me know if you want to get in touch!

Yes please. I'm on rocket chat.

Chat soon.

Steemit, Streemit, Aurovine, Bittunes, whatever. We need to keep slinging it until something sticks. It sucks yuge that talented artists so often die broke.

bittunes is a great name!

Bittunes is more than a great name. It's a real platform that's been in beta for over a year. Artists get 40% per sale immediately, 40% goes into a pool to be shared by fans and early adopters of said track (much like Steemit), and 10% goes back into the platform and devs to keep developing the platform and you know, run a cool biz. Shooter Jennings has stuff on it. Others are hit or miss. Overall, It is truly a sustainable model (Steemit maybe not.. we'll see), and has been using bitcoins since day 1. I have almost as much in rewards now as I have spent on tunes, even while the user base so far is pretty tine. Imagine if it were to go viral if one of its artists were to get a big hit. You could make money from your 'ear'. :-) No need to go to an exhange for BTC you get it directly from the app's wallet.

Check Bittunes out at the Android Play Store, and probably at iOS App Store too.

I hope It will kill Spotify! Cut out the middle man!

@mauricemikkers, that's the key right there.

Fantastic breakdown of these streaming platforms! Thanks for the good read.

Well, you've done it again, my friend. This one is particularly relevant to artists of all kinds. The "cut" we have been getting is no longer making the cut. Let's all take back control of our work. Nonnegotiable.

Excellent post @thisisbenbrick. Lots of interesting information here.

To date, things don't seem as if they've changed all that much, even in this digital download age, where you'd like to think artist's would be benefitting from the now un-required infrastructure expenditures of the C.D era and back.

Roll on the cutting edge present, and the genius of the Blockchain presents artists with a far more encouraging proposition than anything that has ever come before.

Time to say goodbye to Mr.Middleman. If you haven't already heard, you'll be absent from every part of the process from here on in...... from creating to publishing :)

Music will only benefit from the subsequently more personal, artist to listener experience that will be one of the many positive feedbacks of this tectonic shift in the creative landscape; I'm really looking forward to these unstoppable developments bringing in a new musical era; a golden age where the unsung and talented artist's have a simple, fair and direct to market support network for their hard work.

If you haven't already, check out:

Incorporating something similar into steemit, or as some kind of platform collaboration, would be really exciting!

Another great post. Thanks for sharing.

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