You can stick with the traditional methods of music monetization, or you can tap into the massive opportunity of blockchain technology. The choice is up to you.
image by @atopy
The Internet and Music Monetization
When the internet emerged as a popular technology, a lot of people in the music industry were talking about revolution. The old models were being disrupted and now finally artists could take control of their own work.
The revolution was a half truth. The truth came in the distribution of information: Artists were now free to create and share exactly the kind of art that they wanted to.
But they were not free to earn money exactly how they wanted to. In this way the revolution was a lie. DIY music gained some new tools, but the fundamental feeling of most musicians remained the same: Survival as a musician is a fight no matter how good you are, unless maybe you are a winner of the major label game.
And thus, most musicians continue to follow the traditional methods of monetization for music.
The Traditional Monetization Model for Musicians
That method is simple: Sign away the rights to your music and take a loan (in industry parlance, an “advance”) to survive off of, then spend the next decade trying to generate immense amounts of income so that the financial model makes sense.
Nine out of ten artists who enter this system burn up before they make it to orbit - but for the few survivors, great rewards await.
In this model, everything has to be huge. Financial survival means earning enough money to pay an entire band (often 4+ members), while giving a huge cut of the money to other groups (label, agent, publisher, etc).
You start out $100k in the hole (er, “advance”) and only earning a 10% royalty of the income from your own work. Good luck.
The only way to win here is to sell tons of records and tickets. You need to become a famous musician. Even among the famous musicians, many only last a few years - even fewer end up in any sustainable, comfortable position with their career or their finances.
The more realistic traditional path is what the vast majority of “successful” musicians I have met do - they juggle music and work, often doing full time jobs 9 months a year just to fund the other 3 months of touring.
Shifting Perspective: From Traditional Monetization to a Beautiful New System
Here’s a thought experiment to help you use your own common sense to contemplate the future:
Think about how limited information was before, and how absurdly free it became in the last two decades.
The internet did this, setting information free. You and I both saw it happen. You used to have to go to a record store to buy a song, now you can stream any song ever from your phone, or your computer, or your fucking watch.
Blockchain is doing that to money. So imagine that kind of transition, but instead of information (media) flowing freely, money does. Allow yourself to dream of a world where money flows rapidly and easily around the world, going wherever it feels like.
Then consider that money is information, just a different form. Money is data in the form of a generic “IOU” that we all pass around to each other.
Now think about all of the music that you listen to and engage with. Think about all the songs you enjoy but never contribute financially towards - all those songs you hear in coffeeshops and movies and blog posts, that just kind of pass you by.
Or even all of those songs on Spotify, that you technically pay for, but you have no idea where the money is going. What if there is a better way?
A World Where Money Flows Like Information
Now imagine that the money flows easily where it wants to go. You love a song, and you wouldn’t mind throwing it a few cents. So $0.03 goes from your wallet to the artist’s wallet.
No accounting, no labels, no royalty splits. You just wanna support the artist a little bit so you give them $0.03 and they get exactly $0.03. Or maybe the three members of the band each get $0.01, and then the drummer gets an extra cent because you love the groove.
Now imagine all throughout the day a similar process happens - one cent to this song, half a cent to that one. By the end of the day you’ve distributed $1.50.
Of course, not all of it came out of your pocket - $1 came from Steem-powered upvotes. In this utopian future, with Steem integrated into everything, you can “upvote” anything. You upvoted your mom for $0.10 this morning because she told you a funny joke, and then you upvoted a beggar who said he was two bucks short of a bus ticket.
The other $0.50 was voluntarily tipped from your “donation” account. You didn’t have to give it away, but you ran out of upvotes and felt like giving away some more money. It’s just so easy, and it feels good to contribute.
This sounds like a nice world.
We’re going there.
In fact, we are there. Just a smaller form. Cuz if I wanted to upvote my mom, a beggar, and some musicians - I can do it. I just have to log in to steemit.com.
In the future, everything will be connected to the world’s global reward system, a little thing called Steem. Just like many people move through the internet today off of one login, usually Gmail or Facebook, people will move through their financial lives easily. Upvotes will be instant and frictionless.
Personally, I’d like to be in on the global reward system of the entire world a little early. That’s why I am on Steem NOW, working hard to build it into its mature form.
Take the Leap
The old and new worlds of monetization are largely incompatible. If you sign away your rights, go into debt, and promise 90% of your music income to the label (a “traditional royalty structure”), it’s going to be very hard to enter the blockchain world.
Blockchain is small and slow. We’re working out the details. Here’s how it feels to get involved as a “part time” content creator on Steem:
(1) Starting Slow: You’ll earn rewards here or there, maybe a few good upvotes, but it’s pocket change, beer money, not significant income.
(2) Medium level: After a few months of hard work, you are now earning $100 per week! Nice!
(3) Full-Time: Two years in, you’ve finally put away enough savings to hedge against crypto volatility. You are earning an average of $600 per week from Steem and finally quit your job waiting tables at the local pizza place.
This is a simple path that most people can pursue even if they already work full time. But it only works when you are able to keep the money you earn.
If you’re in a traditional financial deal as part of the music industry, by Step #3 in the above example, you’ll only be personally earning $60 per week while the label pockets $540. They will offer to loan you another $100k to run ads and try to become a “Steemit Superstar”… good luck.
The most unfortunate person in the music industry will be the last one to sign a traditional major label deal before the world finally moves towards Blockchain as its main monetization mechanism.
The luckiest and smartest ones are already joining Steem and other great projects (LBRY, Musicoin) like it.
Which side are you on? It’s not too late to be an early adopter to Steem.
Leave a comment and let me know what you think if you want to talk more about this, I try to make time and respond thoughtfully to as many people as I can.
