Why Blockchain Isn’t Even Close to Fixing Musicians’ Problems

Here's Why Gareth Emery's Choon Won't Fix Artist's Problems

According to a new study published by Choon, a blockchain-based streaming platform, 52% of people said they would use an alternative streaming music service if it rewarded artists more fairly.

76% said they’d love to see their favorite musicians support themselves.  In addition, almost a third of consumers, 31%, believe it wrong for organizations to ‘part-own’ streaming services.

Censuswide conducted the independent study, interviewing 2,029 consumers in the UK aged 16 and above.  But the research group also found that most people don’t know how royalty payments work, especially young people.  More than 1 in 8 ‘Internet natives’ (16-to-24-year-olds) believe artists receive royalty payments the same day their music is streamed.  A fifth of respondents – with a free subscription – believe artists receive money owed in royalty payments between one and three months.

Choon, of course, was quick to spin the results in its favor.  DJ Gareth Emery, co-founder of the largely unproven digital music platform, slammed major streaming music services.

“Streaming music is a huge driver of change in the music industry.  With almost unlimited music on tap, consumers can listen to whatever they want.  The problem with the streaming sites is they currently offer a terrible deal for artists.”

Though it makes sense, Emery’s argument isn’t anything new.  And neither are the bottom-scraping payouts that musicians receive.

Indeed, artists (and most recently Elon Musk) have long complained about “crazy low payouts.”  On Apple Music, musicians earn $0.00783 per stream.  To earn $1,472 – the US monthly minimum wage amount – on the service, artists need about 188,000 total plays.

But that’s considered good.  Spotify pays $0.00397 per stream.  Musicians need around 370,781 streams to earn $1,472.  And I won’t even mention how many plays they’ll need to earn the US monthly minimum wage amount on YouTube, which pays $0.00074 per stream.

Seems like a great problem for Gareth Emery and Choon to solve.  But Emery has yet to address the key hurdles facing Choon prior to its launch.

Why?  Because the magical answer is ‘blockchain,’ that’s why.

First, most people have no idea what Choon is nor what it does.  They know even less about blockchain technology.

Choon’s business model appears to only rely on people who remain convinced that “artists need fair payouts.”  Even worse, it’s buoyed by blockchain hype, without the requisite business model and strategy needed to make this work.

Judging from Censuswide’s results, it seems young people – a group not known for their spending – would prefer using the service.  But they’re not, and part of the problem may be that a blockchain-based, crypto-focused streaming service is too unstable and fringe to make sense for most artists and fans.

Second, blockchain remains largely untested.

Last December, the digital music platform announced its NOTES token payout system.  Artists would have complete control over their content.  They’ll share their music directly to consumers.  Fans can purchase their favorite music using NOTES.  Choon would only keep a 20% commission.

Sounds promising, right?

The only problem: most people don’t know how blockchain works.  In actuality, Ethereum varies greatly in value.  What’s cheap one day could soon skyrocket – or flat-out crash – the next.  Imagine building a music marketplace around this clearly unstable currency.  That’s Choon in a nutshell.

Choon would first have to convince fans that purchasing ‘TOKENS’ is more practical than automatically paying $9.99 for a streaming music service.  It would also have to convince artists.  Cryptocurrency isn’t a practical alternative for musicians who need to make a living.

Imagine having to figure out how to receive payments in Ethereum right when the rent is due.  Or, when you’re out of gas.  Let’s not even mention when you need to buy groceries.

Third, to remain afloat, any company, no matter how ambitious, needs a solid business plan.  It also needs a steady source of income.

Gareth Emery’s platform, no matter how optimistic, is no different.  Most consumers already use an established streaming music platform.  It remains much easier for music fans to use major platforms – Spotify, Amazon, Apple Music, YouTube, etc – to listen to their favorite songs from popular artists.  They can use mobile apps on their smartphones and listen on the go.

Plus, in this industry, you’ll need the support of all three major labels.

Major labels have posted record revenue thanks to established streaming music platforms.  These provide a steady source of income.  They also readily support major streaming music platforms.  With the self-releasing artist market only accounting for 2.7% of global recording sales last year, why would they support an unproven currency?

How would Choon, or any other blockchain-based digital music platform, convince major labels to hop onboard?  Simple.  Higher royalty payments.  Choon promises to keep just 20%.  But, in order to become a viable music platform, it’d have to convince major labels to hop onboard.

And the only way you can do that is by giving them at least a 55% share of all revenues earned on the platform.  And you can’t pay that in crypto.

Emery remains optimistic that Choon can solve artists’ woes.  But until he actually manages to address how his digital music platform will actually resolve its own problems – including painless royalty payments and an acceptable user base so artists can actually earn money on the platform – don’t expect Choon to solve musicians’ problems anytime soon.

For now, blockchain is an idea.  But it’s not one that solves musicians’ pressing financial problems — including having to eat.

 


Featured image by S.Camelot (CC by 2.0)

13 Responses

  1. BAAB

    Choon has its heart in the right place but its business model is non-workable in the present environment. token-based streaming services like Choon can only work if cryptocurrencies like Bitcoin and Ether become a stable form of monetary exchange. When people can start paying rent and buying stuff easily at 7-11s with Bitcoin or Ether, that’s when a business like Choon might work. Right now cryptocurrencies are just a scam, look up Greater Fool Theory.

    Reply
    • In the Know

      Here is a idea, how about skip licensing with the Majors, it would save this streaming service a ton of $$. Make the platform pure indie music.

      Reply
      • Frankie

        Choon is premised on new indie music – so long as your music is assigned, Choon is not open to you. It’s entirely direct, independent distribution without intermediaries.

        Reply
      • Smurf

        Choon is only for indie artists that own their own Music so you’re spot on there.

        Reply
  2. The Pope says

    New platforms all seem tone deaf to the one big issue facing their own new music platforms..their own platform is going to help artists make money money yet no-one has heard of it and very few people are actually on it. Cool story bro

    Reply
  3. Streaming race

    Streaming music apps and discovery services are a dime a dozen. Blockchain is just the new thing because Spotify/Apple/Amazon have got the subs in now for life. There isn’t two facebooks and isn’t room for that many streaming services either. Choon can’t launch a 9.99 new sub service cause that game has been won so they go blockchain and sell it that way

    Reply
  4. King Shlomo- Blockchain Gang

    Some valid points. For starters Choon isn’t the only blockchain company doing this. Why signal them out? author is stretching to say they can’t pay rent in ether. They can’t pay rent with streaming pennies either. You’re assuming most indie artists pay their rent from royalties. Doubtful no matter what currency. Blockchain will help these artists in the future more than this shortsited article mentions. Like create a universal database of indie songwriter rights for brands to easily license. Major labels/publishers ain’t doing that buddy. There are holes in Choon. Holes in blockchain. But to completely write off blockchain is naive. You probably thought the biggest taxi service couldn’t possibly happen without owning taxis. Either that our your shorting your Choon Notes

    Reply
    • Ellie M.

      This lame lazy reporter clearly doesn’t get it. Blockchain and smart contacts are great for micro payments, much faster, more accurate and fully transparent. Not sure why this reporter doesn’t think that is an improvement over the traditional 50 page paper record contracts and waiting 1.5 years to get paid. Choon uses blockchain for royalty accounting payments which i believe happens every day according to their white paper. not in 1.5 years which Spotify pays. How is that not an improvement lol… do your research Daniel lol

      Reply
  5. Kryptokind

    Jesus. Did you even read the whitepaper?

    The fact that it’s on the Blockchain, or that artists get paid more fair is not what will make Choon work. Not at all. People don’t give a shit. It’s a nice bonus, but it has to be beneficial/convenient for them directly. – And the Choon founders know this so well.

    What will make it work, is the fact that everyone who contributes and provides value gets rewarded. Playlist curators gets a % of all the streams they generate even, which makes so much more sense than the current model.
    Mixes will also be a thing at a later time, where the artists making the songs will also get rewarded. Two-way tipping, so artists can tip their favorite listeners, and listeners can tip their favorite artists.
    There will also be a system for making remixes. A domain where it’s currently common to not get paid at all, artists are making remixes for promotional purposes.

    And “normal” people won’t even notice it’s on the blockchain. For them, it will just be a normal streaming service where they pay a subscription fee in fiat, that gets converted to notes in the background. (Choon will buy back notes from exchanges with this fiat and put it back into the Choon ecosystem)

    There will be incentivized plays inside the platform – A way of advertising music that makes a lot more sense than the current ecosystem. Paying in notes for the first play to promote your track, vs. a Facebook ad to get people to a music platform they may or may not use, paying top dollar for the click that will not be profitable anytime soon.

    The founders are constantly making great decisions, they are fully focused on building and expanding the platform. They have lots of experience, as well as Gareth himself has quite a following, and can easily stirr up some press.

    On top of all this, everything is transparent, and they are following all regulations. You can see who gets what, who the founders are, and what their plan is. (Unlike Tidal, hehehe)

    Of all the “competing” music services popping up on the blockchain now, Choon is already miles ahead, and have a working (though barebones) product, even 6 weeks before the token sale.

    Reply
  6. Club Power

    Choon will fail because it won’t scale. 100%. How much have they raised? When will they be profitable?

    Reply

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