New business models in the music industry; aligning incentives

Jul 28, 2017 | blog

New business models in the music industry; aligning incentives


Being a musician is a broad definition. Musicians earn money with composing songs, live performances, teaching, merchandise, song sales, royalties, endorsement deals, licensing their song, session acts, or performing in exchange for other goods. They are probably one of the most creative business people around. Every single (starting) musician has his or her own way of creating revenue and making a living. This is one of the beautiful things of the music industry while at the same time being one of the major challenges for starting artists: There are so many different roadmaps, possibilities and challenges. If we phrase it from a business perspective we could say that musicians enact a set of large set of different business models.


In our last blog we introduced our view on some of the main challenges within the current music industry; to coordinate a global infrastructure with all industry actors; to create sustainable business models for all participants; to put the musician in the centre of the industry again. We think these challenges can only be overcome by addressing them together. Or to phrase it differently; why not address these challenges together if we have the chance? So, for starters; what should a global digital infrastructure look like and what should it be able to do?


Ideally, musicians – as well as record labels and publishers – can easily register themselves on a globally accessible service. A service that has low barriers to entry (costs & user experience), can serve legal registrations (ownership rights, contracts, donations). A service that will be maintained by actors with the incentive to create tools and services that create more value for musicians or the infrastructure (infrastructure). A service that connects all these participants, where all participants own a small portion of the service itself, and where network effects create more value with every new user (fair share of “stocks” & network infrastructure). In this situation participants (musicians, record labels, developers, etc.) should be gaining revenue from the additions of the other participants.


This cannot be solved efficiently in a traditional manner where all the different administrative efforts and communication channels must be managed manually. It will be partly possible in a way current platforms are created – the last era has seen a rise in platforms and online e-commerce such as google, facebook, amazon, followed by the sharing economy platforms like Airbnb and Uber. Although then we would still have problems with aligning incentives and creating a fair division of revenue as the current platforms are not created to share revenue with the creators of the content.


This is where the blockchain enters the scene; a blockchain gives the possibility to create a platform where the incentives of the participants are aligned in a way where they amplify each other. Musicians are being rewarded by putting their music, ownership rights and brand on the blockchain. Record labels and other industry actors are awarded by the digitisation of administrative efforts and by the possibility to enact new business models. Developers are being rewarded for creating services that help these different actors. And listeners are being rewarded by having the possibility to support their favourite artists and acquire a small part of the revenue at the same time.
It works with the use of a cryptocurrency. This digital currency facilitates the infrastructure and functions as a store of value (a share of the platform) too. In that way the platform does not need to appropriate revenue to the top layers. The platform that does not need to create all software within a closed company (open source). The end-user is not merely a user but a participant and shares in the value creation of the whole. This enacts a new way of thinking where we are able to align incentives of all participants.


Thus, to create the ideal situation that provides the abovementioned features we will provide this blockchain solution. We will call it The Moosty Blockchain Platform: It will serve as a platform for musicians, streaming services, record labels and listeners. As a musician you can register your music, manage and pay-out royalties, and execute crowdfund actions. Create or connect a streaming service with existing contracts, including payment services. Record labels can easily move their artists on the blockchain to automate processes and agreements between them and their musicians. Listeners can listen to music legally, donate or invest in musicians and/or their songs.


The infrastructure consists of a blockchain solution with its own cryptocurrency “MooseCoin.” and it will incorporate the following three fundamental applications;

  • Moosty Registration Portal (incorporating the account & the wallet)
  • Moosty Marketplace
  • Moosty Streaming Network


In conclusion we provide a new digital infrastructure for the music industry where all participants are able to connect with each other. It puts the artist in the centre of the industry again. Provides more autonomy and aligns the incentives of the most important participants; artists and developers. This new infrastructure creates a much more efficient way of enacting the current business models, enables new business models, and forces larger actors to rethink their business models again.


You can find elaborations of the three fundamental applications within our first conceptual whitepaper, our next blogs or you can get in touch through Slack, Reddit, or by sending an email.


Our next blog will elaborate on the different parts of The Moosty Blockchain Platform and give a more in-depth insight in the specific incentives of the different participants.

Cheers!

The Moosty Team


These blogs are meant to introduce to you the overall picture of the landscape, the origins of our thoughts, the reason why we would like to change the industry and give insight from multiple perspectives; music, business, technology & innovation. We are happy to answer all questions coming to mind, so don’t be shy asking them!