The Steem-Powered Web Will Turn Musicians From “Unpaid Interns” to Paid Employees of Society

in #steem7 years ago

Society employs musicians via the “free” market, allocating as much capital to music as the community is collectively willing to pay for it.

There may very well be enough money to pay for a large and healthy “middle class” of original musicians in the world today. But, similarly to how world hunger is a distribution problem, our media system does not distribute money properly and therefore far fewer musicians are able to survive off of music than there could be.

Describing The Distribution Problem

Imagine a very simple society with five people in it. Each person is willing to pay $2 per year on music and it only costs $5 to survive for a year.

Since five people each pay 2, 2 * 5 = 10, and 10/2 = 5, so two people could survive as musicians in this society. That’s enough to get a band going and everybody wins.

Now imagine that the two musicians are “signed” to a third member of the society and have to give her 50% of their earnings. Now of the $10 allocated to music each year, half of that goes to the manager, thus leaving only enough money for one full time musician.

This kind of thing can be okay if the numbers work - if 10 musicians all share a manager and only give up 10% of their income each, eleven people survive and the manager is able to do the work that musicians don’t want to do.

The problem happens when a small group of powerful people are able to monopolize too large a share of the music economy. That can be a poor distribution of value - society doesn’t want to spend 80% of its music income on major label CEO bonuses, but it works out that way anyway.

Amateur Musicians Are Unpaid Interns of Society

Furthermore - think about social media platforms that are NOT Steemit and don’t pay money to most of their users. On platforms like Facebook, Instagram, and Twitter, most users are not earning a dime for their content. Yet they put work into creating that content.

Musicians who are trying to build an audience, creating and distributing music through these platforms, are like unpaid interns of society.

Sometimes unpaid jobs can be fine - I did them for some radio stations when I was younger. But in today’s world, most musicians are unpaid interns - even successful ones! You can sell 1,000 tickets to a concert and you still won’t earn any money for the Instagram post about it.

We have a problem where way too many people are forced to provide unpaid labor just to participate in the promotional system that makes a music career possible. If you don’t participate on the social web, you languish in obscurity.

Steem-Powered Systems Err Towards Generous Rewards

With a Steem-powered system, the situation inverts to the exact opposite: Even more people are compensated than is strictly necessary - there’s enough abundance to go around.

With Steem, rewards go to the users and the stakeholders via upvote rewards and curation rewards. When I upvote your post, we both are rewarded - you earn the main reward for creating the content, and I earn a micro-reward for helping to curate content.

This replaces the idea of monetization via advertisers. On Facebook, attention is sold by the centralized company (Facebook Inc) to the advertisers. You lose and they profit.

On a Steem-powered system, there is no centralized company selling ads. Instead, the community monetizes its own attention by issuing cryptocurrency tokens to the most popular content creators. This incentivizes the best creators to keep creating, generating a self-sustaining incentive loop of content creation and consumption.

Instead of social media companies and advertisers taking the value, the creators get most of it.

In today’s world, anybody posting on Instagram/FB/etc is helping them earn money. They are unpaid interns. In tomorrow’s Steem-powered world, these content creators earn the money for themselves.

Thus, all aspiring musicians will earn financial rewards as they go. The beginner will earn a few bucks for beer money. The aspiring professional is able to reduce hours at their full-time job thanks to moderate steem income. And that newly emerging breed, the Professional Steemian, earns a comfortable living thanks to their participation in the steem-powered networks.

Today’s system is built on scarcity and FUD. Tomorrow’s is built on abundance and inclusivity. Everybody is welcome aboard as we make the transition.

Closer Than You Think

This idea is not so far in the future. Steemit is a successful and proven use case that is now in the top 1,500 websites of the world. As Steem-powered systems move closer to the top of the internet food chain, more sites will take notice.

We may face competition - Facebook and Instagram could launch their own token. Or we could see adoption, where these major services eventually launch SMTs and get into the Steem ecosystem. Least likely, but luckiest of all, would be for the major players to miss the blockchain bandwagon for so long that Steem-Powered systems replace them entirely.

Whatever happens, I suspect that we’ll know who the winner is within the next 5 years.

If it goes the way I hope, we’ll have a social media landscape a lot like today’s, except ALL of the social media platforms will pay per upvote like Steemit does. Becoming a full time musician will be a much gentler and less risky endeavor in this future.

That’s why I am going to work my ass off to make Steem as successful as possible. I hope that you will too.

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I agree so much with you!... Steem is making such a great difference distributing the wealth, specially for musicians... I remember when we launched our first album with our band @echoes, we sold a lot of copies worldwide, tough we rarely saw any of those gains, and most of the money we got back barely covered all the debts we had... Now sharing our music on steemit (dsound) is actually giving us much more rewards, there is no middle man taking a stake and we aren't spending anything on advertising... And this is just the beginning...
I hardly doubt facebook or instagram will ever compete or create their own token to reward their users... They may start using cryptocurrencies in many different ways, they will look to a way to benefit them self and not the users, we must remember that those are centralized platforms and all they want is make money, and they can do a lot more if they incorporate cryptos, like accepting cryptos as a pay for advertisement etc

There are rumors that Facebook will launch a token in 2018 o_o

Yep a heard that rumor too!... But i am guessing that token will be used to purchase views and likes, and not as a reward for likes... of course that is only my guess

Nice post man. I don't really know anything about music or the industry but I would love to see a day where a child, who wants to be a musician or artist, doesn't immediately get the parental response of: "How will you make a living"?

It's very exciting to see these new possibilities coming into existence. The days are numbered for centralized platforms extracting free labor from everyone.

Yeah that would be amazing to see a day where musician is seen as not such a crazy career path lol

A great read, thank you, Matt. Enjoyed the example of a mini society of 5 people to really show the imbalance.

I hope at the same time you are gonna be working your ass off as a musician and see how it goes!

Hey, thanks for this one, matt:) Any thoughts on the upcoming Minds token?
I really have no interest in the entertainment industry anymore per se ( that sometimes happens to old people) but I still have my talents (whatever they may be) and think blockchain tech could be a supplement to a ​pension or even better- a basic income.
I do think you've hit some nails squarely on the head here: the economic problems are mainly about wealth distribution and that coupled with everyone having fair and equitable access to opportunity​.

I haven't heard anything about the Minds token yet to be honest. What is it for?

Minds is a social media platform that came online around the same time as Steem. It's a point reward system at this time but they released an email last month saying they will release a token white paper soon. I double post some of my stuff there but the site, in general, I don't find as friendly. Bill Ottman​ seems to be the man in those parts.

I do appreciate the promotion you make for Steem and I suppose also for other crypto currency based music platforms, however, some of your statement are simply not correct.

80% of the revenue of songs/tracks does NOT go to the bonus of the CEO of a label/publishing company. That is a plain wrong statement! Selling you music on iTunes, Apple takes (when I last checked some years ago) around 30%. Selling electronic music on eg Beatport, Beatport takes less than 25% as far as I know, leaving 75%+ to the label/artists.

Trying to sell your music to the mass market, is more than just creating the music itself. It requires a network with the magazines, ezines, radio station, tv stations to reach the mass market; and it requires all the time and money involved to get that side of selling music done! Even when you would argue that the mass market will eventually come to Steemit, you will have to do extra things to be discovered by the mass market. Today, there is still a very very few music posts on Steemit compared to all the music released in the whole wide world. Imagine that all music produced in the world would by published at Steemit. You will have to do a WHOLE LOT of effort to get your music noticed by the community, hence get votes and all.

Most artists are not business people, so they (have to) hire people to get gigs (bookers), to get advise on how to steer their career (managers), they sign with labels to get their work spread on the right media and through the right channels where consumers will actually discover/listen and buy your work and maybe get Vinyl/CDs created (labels), they hire publishing people/companies too get you interviews and promoted to all those channels consumers consume music. And whether you like it or not, a consumer will never ever go to 1000s of different sources for their music, they go to 1, 2 maybe 3 sources and these are in electronic music very simple: Spotify, Beatport and to a lesser degree iTunes.

Also, crypto based economies seem to work still, ie cryptos gaining value over time (all due to speculation). However, at some point in time, when cryptos are large enough to be comparable in market cap with eg US Doller or Euro, the value of the cryptos itself will not increase anymore, it will actually decrease over time due to inflation...Inflation is caused by the fact every single day new units are created for distribution, and that decreases the value of each unit in the market.

I'm afraid, no matter how you want to look at things, the real world is different to what most people try to push as the holly grail wrt artists and blockchains. The fiat world already have places to go to where you don't need big companies. In fact, in the music world you have 100.000s small labels, already 20/30 years ago before we even had the internet. When you want to end up in the top 40 every single week, then you may need one of the dominant players in the world, BUT that will also give you the associated return in money since the mass will buy your work much much much more, then if you would not end up in the top 40. And without the BIG networks, you will NOT end up in the top 40, it is as simple as that. Look at how difficult it is to get noticed when using YouTube as the channel? Maybe years of experience we already have with that channel, and it is a perfect channel to promote your music (although not monetised, but from a social point of view, a perfect channel to see if your music is getting somewhere).

And then this, on Steem. I'm not sure how much Steem is created evey day, but lets assum this is 40.000 Steem every day. And lets assume Steem maximum value is 10.000$, ie at some point in time Steem is valued 10.000$ and stays stable at that level, like the US Dollar is kinda stable and the Euro is kinda stable. Then each day 10.000$ * 40.000 = 400.000.000 Million $ worth of Steem is distributed every single day. Now also assume all the music in the world is published to the Steem blockchain and lets assume this is 1.000.000 tracks each day. Further assume of all Steem distributed every single day 10% goes to music. We then end up with: 40M$ for all music, and 4$ in average for each new track. We all know that at least 80% of the revenues will go to the top 20% tracks, so the long tail will get much much less than 4$ for their tracks. TO become part of the top 20% of earners, you have to do a LOT more than just posting your tracks at Steemit and we are back to all the things done in todays music industry.

I think musicians have, through much of history, had "portfolio" careers: a bit of teaching, a bit of composing, maybe a dayjob some of the time, and a fair amount of performing. In the 20th century there was a situation where you could reach a huge audience -- but only if you could access the equipment to record your work. And yes, some labels do take unfair advantage of musicians, while others are more equitable. But this thing where recording and distributing your own work required the services of a label meant that some people quite literally became rock stars, and some of them got very, very rich; and the average listener, through radio and television, got a lot more exposure to these musicians much more easily than they would have in e.g. the second half of the 19th century (back then, reaching an audience beyond what you could do by gigging was all about publishing piano sheet music.) So there's this expectation that if you're a good enough musician you, too, can be a rock star; but the reality is, as you say, somewhat different.

That said: what happened toward the end of the 20th century is that duplication and distribution of recordings got really, really easy, and to an extent less centralised. If you're a musician whose work fits a small niche, no, you're probably not going to get a huge following online; but you might well get a better following than you would have if you tried to go through a big label. Everything is a lot less centralised than it was a few decades ago.

I think this does make it a bit harder to reaching "rock star" levels of income, though of course some people do have their work go viral. But it also makes it easier to earn a modest income from music that's a little off the beaten path; there are people out there who are willing to pay for the music they like, and they will go looking for it. My own work is pretty niche: I compose choral music, mostly sacred at the moment, and no traditional publisher of choral sacred music will touch my work because of my commitment to Creative Commons licensing. So I self publish, and release my scores online, and the amount I made last year through Patreon is roughly equivalent to a year at the organist-and-director-of-music gig I left in 2016, while having a lot more flexibility. (That gig was somewhat underpaid, but I'm also somewhat desultory about my online networking, mostly because at the moment I'm working on a PhD). Meanwhile, most sheet music publishers would still want me to be active on social media and sending out links to my work and doing lots of networking.

And that's the thing, I guess: if you sign a deal with a label you still have to do gigs, if you publish your sheet music with a trad publisher you still have to do your own promotion, if you get a contract teaching violin or guitar or trumpet or whatever in a school or a music shop you probably still have to scrounge around for students.

I don't know enough about cryptocurrencies to have strong opinions on whether Steemit, in particular, will have a similar impact on my work; but I don't think @heymattsokol was trying to imply that just putting your content here and not doing any networking would be a viable strategy.

You are so right in what you write. The 'rock star' status is there for a few, and any artists have to do more than just releasing music. In the electronic music segment (the segment I know pretty well), releasing music is mostly not for the direct revenues, but the indirect revenues, ie it is marketing to stay in the picture of promoters since most of them require an artists to have recent releases to book such artist, and this includes artists taking good sums of money per gig the average person in the western world have to work a couple of month to a year for.

I like all these new platform that try to create alternative places for artists (mostly marketplaces for marketing and sales) to earn from their work. My statement was, and still is, many of those platforms are out in the market that are not based on blockchains and crypto currencies, while they support the artist in finding revenue. Too much hallelujah around blockchains and crypto currencies and earning potentials imho, since everything has a limit, and the value of a crypto has a limit, and the number of units as well. I simple tried to put some nuance to the original post as I tried to do in the post I refer to in another comment to this post :)

I know some people who have had great success with Bandcamp, and it looks like a pretty viable platform. As I produce sheet music rather than recordings it's not much use for me...

I think some of the issue, too, is that for most people, one platform isn't going to be the answer. That's mostly a good thing, because platforms come and go. When I first joined Twitter the signal to noise ratio was pretty good, and now it's terrible. I was never in the niche that found MySpace important, but when it basically collapsed (because Facebook had more people on it and was easier to use from a smartphone, among other things), some people who had been relying on it too much and not finding some other way to stay in touch with fans ended up being left behind.

So the thing that concerns me about Steemit isn't so much that I'm worried about blockchain currencies being Monopoly money (though I'm certainly skeptical), so much as the concern that people here don't seem to be linking to their mailing lists or websites or whatever very much: it's in the nature of the platform to encourage interaction here and here only. That's great until it implodes and you end up starting over elsewhere.

What is good about this platform, as far as I can tell, is that it does appear to work on the basis that the effort involved in writing blog posts, replying to comments, and so on is labour that adds value to the site (and maybe to wider society?) and as such should be compensated. To anyone who has spent half their life gigging for free "for the exposure" that sounds like a pretty sweet deal.

(Sometimes performance "for exposure" is actually a good idea, of course. It depends what kind of exposure you're talking about. I had an e-mail this afternoon asking if one of my pieces could be used for a choral conducting class at a university, and of course I said yes: having the next generation of choral conductors exposed to some of my work is a great thing, and this is exactly the kind of exposure I want. But that piece was already online for free anyway, so I didn't even have to think about it.)

Thanks for the yet another good comment with everything you state is not far of from what I think is the situation. Just to simplify: To monetise digital work, one need a place to store the work and can distribute it to those who wants to consume it. On top of that one need to use any appropriate channel to market their work. To market in the digital age using digital channels, I will say the same as you: Don't use a single channel. My producer friends are using Facebook a lot, but slowly they need to start incorporating Instagram and maybe in some years Snapchat due fans moving from Facebook to Instagram and the youth now on Snapchat, may stay on Snapchat when the reach the age being allowed to go out and party and with that become very relevant for artists to connect with.

I think it can be hard to predict which platforms are going to be around in five years, though.

I would suggest that a better strategy is to spend some time each week or month checking out new platforms, and starting to build some community on them. Not all of them will work out, and that's fine, but you won't find the new ones if you don't explore.

And, of course, have your own website and your own e-mail newsletter, so that if people from whatever platform want more of your work or want to keep up with what you're doing, it's easy for them to do so. The people who will sign up for your newsletter or read a blog at your own site or come back and look at your stuff when they're doing their Christmas shopping or whatever are the people you need to connect with; but you can't connect with them if they're on one platform and you're on another. So you have to go where people are, but make sure you have an online "home" that people can actually find.

I need to do better at this, myself.

I need to do better at this, myself.

That was also part of what I tried to say, not so many artists are business people, and/or know how to market themselves. That is where third party people and companies (big or small) come into play, they can advise, support, manage those aspects while the artist can concentrate on their work. I see to many good artists not reaching anything with their art, since they dont work with the right people to handle the 'business' side of things.

But a lot of platforms and businesses -- not all of them, but enough -- aren't interested in selling business and marketing services to artists at a reasonable rate. They're interested in owning the artist's output, and charging rents on it that the artist will mostly never see; and much of the time they are still expecting artists to do lots of networking and marketing, not letting them "concentrate on their work".

I'm really suspicious of any platform (whether it's a business or not) that tells me it's the only way to reach a certain part of the market. Most of the big labels are completely irrelevant for the type of music I compose!

I'm also really suspicious of any platform that's trying to be "the only place people go for X". The truth is, I probably wouldn't have access to a larger audience if my music were on iTunes, because I am actually more connected to my (very niche) audience than iTunes is. My niche is small enough that iTunes (or whatever platform), in turn, isn't going to put any effort into marketing my work, because they'll get a much bigger return on something less niche. The same is true for the vast majority of the big labels.

There isn't one solution that works for everyone, anyway; but the solution that works for the "big fish" isn't the solution that works for those who make good art, but are a little off the beaten path. The solutions that make occasional rock stars are almost universally unsuitable for someone working in a small niche.

And the thing is, and this is why it's relevant to @heymattsokol's post: everyone starts out in a niche.

Everyone starts out unknown. And to get known they have to be on a bunch of different platforms, going where people are, trying to find the group of fans who are dedicated enough to follow them. You can't skip that work by signing with a label. You can't skip that work by getting a publishing deal. If anything, once you've signed with a label, or gotten a publishing deal, or whatever else? You now have pressure from them to keep doing the social media marketing and you also have pressure to them to create work that sells rather than work that's true to your own artistic integrity (obviously, some work sells and also has integrity: but some doesn't).

@heymattsokol's point isn't that platforms like Steemit will mean artists don't have to do that work: it's that currently, artists doing that work on platforms like Twitter and Facebook are doing work by creating and talking about the content that makes the platform valuable and being rewarded by, er, being forced to watch ads, whereas here they are doing that work and getting paid for it in currency. That makes a big difference, especially if you don't spend that money on toys, but on things like music lessons, or rehearsal space, or maybe even something smaller like website hosting. Early on in my experimenting with Patreon I started spending the money I earned there on demo recordings of my choral pieces, and it made a huge difference to the accessibility of my music. I wouldn't have been able to afford that without the (small) income that I was getting from Patreon.

And now? Well, I'm probably never going to reach the rock star career trajectory, and that's fine. But the existence of and proliferation of alternatives to the prevailing model of how to get paid for making music means that I can expect, with a lot of work, to have a much higher proportion of my income come from composing and related activities than would otherwise be the case. My portfolio career can include more composing and less teaching, or less performing, or similar. I can pursue otherwise unavailable educational opportunities: my composing is paying most of the tuition fees for my PhD (the rest is covered by a scholarship).

None of that replaces me having to do work, both in terms of workng on my art and in terms of networking. But it sure helps.

If you sign to a label you really do end up only earning about 10% of the revenue from your music. You definitely don't get to keep the full 70% of what iTunes pays out, for example.

If iTunes sells an album for $10, they then send 70% ($7) to the LABEL, who then send the royalties ($1) to the band. So the band earns $1 per record lets say. Then 360 deals became common so now if the band earns $1,000 from playing a decent gig, they only earn 10% of that too.

The problem is that there is no good source of funding to bands early on. Therefore musicians do stupid things like sign bad deals that take away their ability to earn. Stuff like Kickstarter and Patreon has made a huge difference in the industry already, and Steem is like that on steroids. It will result in more musicians being independent and financially sustainable.

Yes, of course in the chain of selling your music, using eg a label, the label actually execute tasks you as an artist dont have to do, or may not even have the network to do so. That type of work is not free of charge in a capitalistic world. And to be honest, you can say: I sell my music on Steemit, but your audience is SOOO much less than through a channel like iTunes, you may limit the income. Yes, today we are in very early stages of crypto and crypto based services and competition is almost not there using these new technologies and when getting a single upvote from eg @dsound account, suddenly the revenue from posting a single track to Dsounds, becomes huge in comparison, with eg selling through iTunes while almost nobody using iTines knows you as an artists. But these times will change when competition increase and number of user of eg Steem, or Musicoin will increase (a lot), then you will have te spend a lot more time to get noticed, to get the votes, and will not be able to ride the relatively easy route Steem/Musicoin seem to be at the moment. Art NEVER sells itself, it needs a LOT of business work to sell it.

Agree with you many artists signing bad deals with labels, sure! And also agree with you that todays world, without the blockchain and crypto currencies already provide tools to do it differently, indeed the crowdfunding way for instance as you mentioned. I really dont see why blockchain is the driver to increase the tool set for bands and artists to create and sell their music. The blockchain will add value, I do agree, but to other elements of the complete puzzle, like control music rights, acces rights and permissions, distribution of the music itself and so on.

BTW, you dont need a label to publish your music on iTunes, or Beatport or other music selling platform. Or when for some reason these companies require a 'label' company, then create your own label, as I know quite a number of artist having their own registered label. Be prepared to do all the work yourself, or pay others to handle all the work required to run a label though.

In a more detailed way I posted about this topic in this post: https://steemit.com/blockchain/@edje/artists-music-blockchains-crypto-currencies-the-realistic-view

That's sad and true. I am a cellist in a country where the job opportunities are really few. The entrance to a big orchestra depends on your chances to become a friend of the supporters of this orchestra, not always fair. That's why lots of musicians try to advertise themselves on Facebook or Instagram, which usually doesn't bring a financial reward. Steemit might be used to support us. I am relatively new on the platform but I hope I could share some of my experiences. Thanks for the post.

Ahh yea you have it really tough trying to get into an orchestra. Thats the hardest gig in the world maybe. But maybe with steem there are new opportunities - like getting together with a few other up-and-coming musicians to form a Quartet, get paid to put out songs here, and maybe that helps you become friends with the orchestra :-)

This is such a greatly written article! I think others like me are finally glad to get paid what we're due for so many years. Steemit, DTube and DSound will definitely be the leading agents of tomorrow!

Well done Matt. After just a couple of months on the platform I came to the conclusion that Steemit could evolve into something quite different from simply being a social media platform.

It became clear that musicians and their fans could become island communities within the vast ocean of posts on steemit. I described it as a self-sustaining, self-perpetuating virtuous loop. It's a win-win for musicians and music lover.

Let's keep beating this drum :-)

" musicians and their fans could become island communities within the vast ocean of posts on steemit"

Beautifully said @roused, love this!!

Amazing article, Matt, I am not in the position to be frustrated with the way music industry works, but it's the second part of your point that I resonate with the most. Trying to build a following on any social platform is like pulling teeth and to me the whole idea of steemit was just extremely refreshing in it's own right. I can only hope my enthusiasm will continue to grow as it has so far and that the platform will find better UI and UX solutions to discoverability and fair attention to growing numbers of user submissions.

IT's awesome that Steem is giving you this first taste of a healthier social media environment. Just get ready because inevitably no matter how awesome things are, we do end up back in that "pulling teeth" phase - Steem is a bigger opportunity than ever before, but with new opportunities will come new challenges

I really really hope you're right! I'm willing to bet we're going to be hearing a lot of realllly unique artists on steemit too. If the music industry as a whole does eventually move towards this model, I'm willing to bet less artists are going to aspire to fit whatever sound is "hot" or popular at the time too. With that said, this kind of direct reward system for artists could very well change the entire direction of music. I'm super excited to see how things go!

Maaaaybe although you know I think that artists might always be craving acceptance and popularity, no matter how good the world gets :-P