The music business is evolving. For more than a decade, revenue from recorded music sales has been shifting via streaming, and the trend shows no signs of abating. Although the accessibility of streaming is a favourable macro trend, it provides an income source that is less accessible to unknown, underground, and niche artists that do not have a full-scale crew behind them.
This is not an issue specific to the music business; it is indicative of a larger trend of disintermediation, in which customers are increasingly acquiring their content and services directly from technology layer suppliers, rather than from sources closer to the artists.
With the introduction of peer-to-peer file sharing, users were able to easily steal copyrighted material, forcing content owners to respond, resulting in a “arms race” to control digital music and digital rights. However, they have done so at the cost of creators, and new intermediary arrangements are making it more difficult for artists to get their work out into the public. As a result, the founders and CEOs of the world’s music corporations now earn more money than the top artists.
To prosper in the future, the music business must find a mechanism to share money that appropriately incentivizes all ecosystem members, from artists and fans to engineers and investors.
Everyone can gain from DAOs
The formation of decentralised autonomous organisations (DAOs), which might serve as collective decision-making bodies for the music business, is one possible answer to this challenge. Artists, customers, and other stakeholders would be able to connect directly with one another via DAOs, eliminating the need for third-party middlemen.
DAOs have the potential to help correct music industry imbalances by giving artists a direct say in how their work is distributed and consumed, giving audiences a direct connection to the musicians they support, and giving infrastructure layers like management and record labels a chance to collaborate with their core demographics and get closer to the music itself than ever before.
DAOs might be used to more equitably divide earnings within the music business. For example, ticket resale services take a substantial share of all concert tickets sold on their site, regardless of whether they are sold for $5 or $5000. A DAO that represented artists and concertgoers would not have to demand such expensive fees and could instead share revenues more equally.
One of the primary benefits of a DAO is its capacity to function on a large scale. Without the need for human involvement, a DAO could process and act on an infinite number of choices, partnerships, and interactions. This would represent a big advance over the existing system, in which decision-making is often stifled by a small group of gatekeepers.
DAOs might also help the music business save expenses and improve efficiency. A DAO, for example, might handle rights and royalties in a more efficient and automated manner than is now feasible. This would free up time and resources for musicians to concentrate on developing new songs.
This would be especially useful in the music business, since payments and royalty settlements are sometimes sluggish and wasteful. A DAO might also assist to limit the amount of fraud and piracy in the music business by providing musicians with a safe and transparent platform to distribute their music.
DAOs allow consumers to access music in a more democratic and fair manner.
The large record companies and centralised internet platforms already have significant authority over what music is offered to consumers and what rates they may charge. This method favours the labels, but it does not always benefit the customers, who are compelled to accept whatever music the labels choose to release.
There’s no reason to fight
None of this implies that the music business should be abolished or destroyed. We think that a true music DAO will invite everyone to the table, despite the fact that the record label and music management layers are not an antagonistic force. There is no need to put artists against professionals in the music business.
Instead, blockchain technology has the potential to provide a more transparent and egalitarian framework for cooperation among musicians, fans, producers, marketers, and everyone engaged in the music business. If properly implemented, all parties would profit from improved information flow and decision-making systems.
DAOs might assist to transform the dynamic of music production and consumption by creating these sorts of collaborative groups. With the appropriate combination of openness, fairness, and automation, blockchain-based technology may enable a more equal allocation of power in the global music business.
The music business need significant reforms, and DAOs may be the answer. DAOs might help establish a more egalitarian and sustainable economy by allowing artists and customers to communicate directly with one another without relying on the involvement or permission of gatekeepers.
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