A New Dimension to the Music Business
NFTs are shaping the future of the music business, bringing artists and fans closer together and potentially removing record labels from the equation. Fans can now invest in their favorite artists via an NFT and receive royalties from their music as it is played.
This concept has recently hit the mainstream spotlight with Rihanna selling a portion of her song “Bitch Better Have My Money” through Swedish company AnotherBlock.
As growth in on-demand streaming numbers continues to surge, owners of popular music will start seeing bigger and bigger royalty payouts. This means that decentralized ownership of music rights will only get more attractive.
However, the hype around music NFTs has overshadowed another big mover in the music industry, decentralized streaming platforms. In this article, we’re going to explore what decentralized streaming platforms are, how they work, and how they’re going to continue strengthening the artist-to-fan relationship.
Let’s start by looking at what these platforms are and how they’re different from traditional on-demand streaming platforms like Spotify, Apple Music, or Soundcloud.
All decentralized streaming platforms offer something slightly different. But their foundation is generally the same. The platforms are powered by a blockchain protocol and owned by the community, not the founders, VC firms, or shareholders. This is where the first part of decentralization comes in.
In terms of listening experience, there’s not that big of a difference. It’s pretty much what you would expect from music streaming. Search functionality, playlists, player controls, etc.
Another component making these platforms more decentralized is content storage. A platform like Spotify needs to store all its music somewhere. Similar to Google or Facebook, Spotify will have a number of data warehouses that store all the musical content. These are controlled by Spotify, making their whole catalog centralized.
Decentralized streaming platforms, on the other hand, rely on a network of node operators to store and index content. Node operators receive rewards for keeping the network running in the form of a native token. But why would you need the musical content to be decentralized?
As with most blockchain protocols, we could think about decentralization from a censorship perspective. Today, Spotify has the ability to censor any artists they see fit on their platform. This isn’t the case on a decentralized platform as it would require consensus from the whole network. But more importantly, a decentralized streaming platform provides artists with immutable and timestamped records of their creative works. This adds a layer of creative security to up-and-coming artists sharing their music. I’ll be talking more about the implications of this in future articles.
So where can you find these platforms?
Let’s have a look at a few of the most interesting and exciting platforms in decentralized music streaming right now.
Audius
Audius is a next-generation streaming platform built with artists in mind. The platform allows artists to upload finished music as well as share works in progress while interacting with their fanbase. Unlike a platform like SoundCloud, Audius isn’t designed as a platform for artists to graduate from. It’s engineered to cover the artist’s entire lifecycle. This includes a social media layer, allowing artists to build and interact with their fanbase while growing their creative brand.
Audius rewards artists and listeners for streaming and uploading music using their native $AUDIO token. This token is also used to reward node operators of the Audius network.
Audius has over 100,000 artists on the platform today and is supported by the likes of Katy Perry, Steve Aoki, and deadmau5. They also boast a range of pioneering investors including Coinbase Ventures. This is one to watch.
Emanate
Similar to Audius, Emanate is a decentralized streaming service built on the Ethereum blockchain. The platform exists to help reward artists for their creative work using the $EMT token.
Additionally, Emanate allows artists to distribute their work across multiple platforms, all in one place. This includes the regular web2 music streaming platforms that we’re used to such as Spotify and Amazon Music. For the up-and-coming artist looking to gain exposure to as many platforms as possible, including web3, Emanate could be a game changer.
BitSong
Web3 music streaming platform BitSong is an entire ecosystem built for artists, fans, managers, and record labels (believe it or not). Outside of the normal streaming, we’re used to as music lovers, BitSong offers a marketplace for music NFTs and a decentralized exchange for Fantokens. In the words of BitSong, Fantokens is a means to enrich the musical fan experience.
Some of you might think that building a web3 platform for labels isn’t aligned with the crypto ethos. This may be true, but like it or not, record labels will be joining the next generation of music platforms. These are a big threat to them. For a platform like BitSong, it might be a good idea to work with them.
Tamango
SoundCloud meets BitTorrent. No gatekeeping. No advertising. A new way to stream music.
With playlists being fan and artist-curated, Tamango is a fully decentralized platform that takes centralized actors out of the equation. Unlike a platform like Audius, Tamango is targeting more of the “underground” music crowd. Think of SoundCloud in its early days.
By leaving playlists and content curation in the hands of the community, the platform encourages a 100% peer-to-peer approach. You’ll never find editorial playlists or “Tamango Recommended” music. This means there are no financial incentives for companies to run ads or for certain music to be featured over others.
In tech, it appears to be trendy to speculate on when certain technologies will take over from their counterparts. When will AI take over the workforce? Will the iPhone dominate Android? You get the gist.
Even within the crypto space, people talk about the Ethereum to Bitcoin “flippening”. When will ETH become more valuable than BTC?
So naturally, people start wondering, will decentralized streaming take over from Spotify? I think this debate is pointless. Web2 technology isn’t going anywhere, and neither is web3. So why can’t we accept both? Why does it need to be binary?
They tend to have complementing strengths anyway.
I believe this is the direction we’re heading in the music business. Artists and fans will find joy and great value in web3 technologies. But that doesn’t mean web2 technologies will go away. At least not in the near future. And I don’t think they should.
