How Web3 and DAOs Can Be a Blessing for the Music Industry
The music industry is changing. Revenue from recorded music sales has been changing for more than a decade thanks to streaming, and the trend shows no signs of reversing. Although as a macro trend streaming accessibility is positive, it offers a less accessible revenue pool for unknown, underground and niche artists without a full team behind them.
This problem is not unique to the music industry; it is symptomatic of a larger trend towards disintermediation, in which consumers increasingly obtain their content and services directly from technology layer providers, and rarely from sources closer to creators.
The advent of peer-to-peer file sharing has made it so easy for individuals to pirate copyrighted material that content owners have been forced to adapt, leading to a “race to armaments” to control digital music and digital rights. However, they have done so in a way that has empowered intermediaries at the expense of creators, and new models of intermediaries are making it increasingly difficult for artists to get their work out into the world. This means that the founders and CEOs of the world’s music companies make more money than any of the top musicians.
For the music industry to thrive in the future, it must find a way to distribute revenue that properly incentivizes all ecosystem participants, from artists and fans to technologists and investors.
DAOs can benefit everyone
A potential solution to this problem is the creation of Decentralized Autonomous Organizations (DAOs), which could act as collective decision-making bodies for the music industry. DAOs would allow artists, consumers, and other stakeholders to interact directly with each other without the need for third-party intermediaries.
DAOs could help rectify imbalances in the music industry 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 such as management and record labels a chance to collaborate with their core demographics and connect with the music itself like never before.
DAOs could be used to distribute profits more evenly within the music industry. For example, ticket resale sites receive a significant portion of revenue from all concert tickets they sell on their site, whether those tickets are sold for $5 or $5,000. A DAO that represented musicians and viewers would not need to charge these exorbitant fees and could instead redistribute the profits more equitably.
One of the main advantages of a DAO is its ability to operate at scale. A DAO can process and act on an unlimited number of decisions, collaborations and interactions without requiring human intervention. This would be a significant improvement over the current system, in which decision-making is often hampered by a small number of gatekeepers.
DAOs could also help reduce costs and increase efficiency in the music industry. For example, a DAO could manage rights and royalties in a more streamlined and automated way than is currently possible. This would free up time and resources for artists to focus on creating new music.
This would be particularly beneficial in the music industry, where royalty payments and settlements are often slow and inefficient. A DAO could also help reduce fraud and piracy in the music industry by providing a secure and transparent platform for artists to distribute their music.
DAOs offer consumers a more democratic and equitable way to access music.
In the current system, major record labels and centralized technology platforms wield considerable power over the music available to consumers and the prices they can charge. This system benefits labels, but it doesn’t necessarily help consumers, who are forced to accept the music that labels decide to release.
No battle necessary
None of this says the music industry should be broken up or burned down. The label and music management layers are not an opposing force, and we believe an authentic music DAO will welcome everyone to the table. There is no need to pit musicians against music industry professionals.
Instead, blockchain technology could create a more transparent and fair framework for collaboration among artists, fans, producers, marketers, and others involved in the music industry. If properly implemented, this would allow all parties to benefit from an improved information flow and decision-making system.
By assembling these types of collaborative communities, DAOs could help reshape the dynamics of music creation and consumption. Blockchain-based technologies can enable a fairer distribution of power in the global music industry with the right mix of transparency, fairness, and automation.
The music industry needs major changes and DAOs can be the answer. By allowing artists and consumers to interact directly with each other, DAOs could help create a more equitable and sustainable industry without needing to rely on the intervention or permission of gatekeepers.
This article was originally published on CAD MOD. you can read it here.