Universal Music Group’s (UMG) uneasy relationship with major music platforms is no industry secret. UMG negotiated with Deezer in 2023 to depose ‘functional music’ in favour of original work from legitimate artists; insisting on higher payouts for those with a minimum of 1,000 streams and 500 unique listeners per month. The following year, UMG withdrew consent for its artists’ music to be used as backing tracks (‘sounds’) for TikTok creators across the board. The label cited royalties were only a ‘fraction’ of what artists were expecting to earn from their key role in the TikTok ecosystem.

The divide is growing between large music organisations, who understand professional artists as key drivers of traffic, and tech platforms, who regard artists as interchangeable (‘content creators’) and user taste as malleable. The ensuing conflict raises an existential question for digital music. Is the product on music platforms the music itself, to which the UX is secondary, or is it in fact the way that users are made to consume it, through algorithms, playlists, and so on?

Spotify especially has played its role in altering the balance of power. Under its Wrapped feature, the platform recommends users their favourite artists and tracks, but not their most listened-to albums. Artist-curated projects are increasingly obsolete in a world of now much shorter songs, with playlist-ability and viral potential shouldering most of the value. Likewise, changes to the way that artists are compensated via the platform, and reluctance to share detailed user data even with top-performing artists, point to a certain self-assuredness in the streaming platform, and a totally different vision for the future that deprives labels of the symbolic significance of ‘owning the masters’. As the industry at large becomes more consolidated, gestures and provocations by key players are becoming the rule.

Against this background, UMG’s tactical use of the ‘streaming 2.0’ in press releases is a formidable response – ‘Yes streaming is a primary part of our ecosystem…[but only with seismic changes made to its execution]’. A reflection of labels’ growing confidence in emerging routes to market – especially the direct-to-fan or ‘superfan space’ – the promotion points to changes in digital music affected by new platforms and trends among artists.

As the group most vulnerable to changes in the industry, artists and their teams stand to benefit from the new disruptive approach. But what does the future look like, especially for artists at the lower end of the growth spectrum?

The market from a consumer perspective will become more differentiated. If not paying for new music outright, listeners will increasingly find themselves taking a more active role in the digital circles of their favourite artists. Streaming platforms that do not adapt will be relegated in the new arena, catering to a second tier of more passive fan-artist relationships, and importantly, without the same cultural capital that enabled top-down control of consumer listening habits. Moreover, as the era of superartists – totally globalised artists with cross-demographic support – comes to a close, the proposition of finding superfandom in smaller acts will find renewed interest. As a result, emerging artists leveraging short-form content on Instagram and TikTok may find these platforms with a more distinct role in their growth funnel. Content with viral potential catches the attention of would-be fans, while exclusive content and incentives on other platforms draw them closer into the artist’s ecosystem. Once these leads become qualified, artists will discover opportunities to make sales and collect data not previously available to them on the ‘Streaming 1.0’ generation of apps.

It’s important in this sense to treat artists as legitimate subjects of business criticism/analysis. Rob Abelow calls this out in his post ‘Artists are the worst direct to consumer brands on the internet’; with the right tools and mindset artists can overcome the concentration of power in one or two digital platforms; building their communities over time rather than gaming algorithms to compete for attention.

Never before in history have fans enjoyed such privileged access to their favourite artists. We have click-of-a-button access to entire streaming catalogues on our phones, 24/7 coverage of creators on social media, and millions-strong legions of fans forming music communities across the web.

Why then, are we at a historic low in terms of industry support of up-and-coming artists? In spite of burgeoning technology, there is a growing sense that smaller creators are being marginalised at best — and exploited at worst — by some of the industry’s biggest players. What are the factors that lead to this mess? And where do we go from here?

Streaming giants are designed to cater to celebrities

People are often surprised to hear that revenue sharing among streaming giants like Spotify and Apple Music is pegged at only a few thousand dollars per million streams. Aside from their ability to make tracks easily accessible on smart phones, conventional streaming platforms remain largely unviable for smaller and medium sized artists.

Grassroots solutions, including Patreon and Bandcamp-like services, have acted as a tonic for struggling artists, but without addressing systemic inequalities in music distribution and monetisation.

Social media fragmentation is toxic

Lack of community features — an issue endemic to music platforms both on Web2 and Web3 — has forced artists to spread the bulk of their social capital and resources over mainstream social media.

Lacking in native options for monetization however, platforms like Twitter and Instagram require fans to then go back to streaming service to achieve conversion, making outreach on these platforms far more convoluted than it needs to be. With their online persona fragmented across the web, artists have struggled to discover unique ways in which to promote their music. In the fallout, fans are being deprived of better, more streamlined content.

What about Web3?

Web3 infrastructure is ripe to meet the needs of up and coming musicians, but new avenues for artists seeking self-promotion are desperately needed. The majority of Web3 integrated music projects operate on a stakeholder model; fans may utilise NFTs to purchase shares in individual tracks, albums, or even artists themselves, and earn revenue from future streams and/or in a secondary market. While more well established musicians have enjoyed great success in leveraging on-chain tech, the existing songs-as-NFTs model has been difficult to infiltrate for the vast majority of smaller and medium sized artists seeking to monetise their content.

Enter TRAX

A purpose-built platform for artists and music lovers, TRAX delivers a curated feed of music content wrapped in a social media interface. In the style of popular membership platforms like Patreon, TRAX joins up content distribution and outreach with monetization. Users may access creators’ streaming catalogue and social media content at the same time through one individual subscription, giving artists commercial and creative control over their career in a single Web3 space.

TRAX’s solution to iniquities in the music industry is simple. Firstly, we replace dated revenue-sharing models with a social marketplace model, allowing creators to benefit directly from subscriptions and purchases from fans. Secondly, we entwine parallel streams of music and social media content, creating a one-stop-shop for artists to list and promote their music. Finally, we leverage emergent Web3 tech on the ICP network, allowing us to foster a transparent environment and share growth with users as the platform develops. Read more about TRAX features and join the new movement against music industry exploitation, from the sound up.