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Royalties alone will not fix the problems with streaming.

Streaming's problems will not be solved solely through the payment of royalties because there are multiple factors contributing to the issue. In order to address the challenges faced by streaming platforms, a comprehensive approach that addresses licensing agreements, artist compensation, and technological advancements is necessary.

The artist-focused royalty proposal from UMG and Deezers received the attention that both sides likely desired, if not the exact attention they were hoping for. But the goal was obviously to ignite a conversation inside the business, and that goal was accomplished. However, although royalties have naturally dominated the conversation—after all, this is a system based on royalties—they are really more of a symptom than a cause. The reason why royalties from streaming don't add up is that streaming doesn't add up. Royalty fixes are just one component of the answer.

DSPs offered music streaming services in the early days of streaming. They have evolved into locations for listening to audio over time. As streaming grew more widely used, its function as retail's replacement for music radios took precedence over that of the former. Lean-back listening, noise, useful music, and passive playlists are just a few of the unavoidable second-order effects of streaming as it follows behavioural data to satisfy customer demands. This is all the opposite of the past, when consumers were chosen by digital store managers and radio programmers. Back then, the public got what the public wanted, and now the public wants what the public receives. The issue is that public preferences lead to the creation of a system that neither creators nor rightsholders desire. Customers have, at least

It is possible that, as Steve Jobs often stated, it is not the responsibility of the customer to know what they want, or that Henry Ford once remarked, "If I had asked my customers what they wanted, they would have said a faster horse." But whether you agree or disagree that product strategy should be determined by user choice, consumer-led innovation is what makes today's digital world unique. This implies that any innovation aiming to challenge established behavioral hazards runs the danger of alienating the same clientele that the system depends on. So how do we literally square the circle?

This framework is used far too frequently backwards. Consider the never-ending stream of new tech start-ups that attempt to force unsuitable use cases onto their offerings. One of the primary reasons why emerging technologies, such as the metaverse, virtual reality, and NFTs, follow the boom-bust-rebuild arc of the hype cycle is that they are frantically looking for a use case. Any attempt to impose new royalty structures—whether user-centric, fan-centric, artist-centric, or something else entirely—runs the risk of prioritizing the supply-side needs of creators and rightsholders over the demand-side needs of consumers, either completely or partially. Although consumers power the streaming machine, art serves as its fuel (even if doing so allows them to profit from

The streaming economy is fundamentally driven by a variety of frequently conflicting demands. Achieving a pragmatic balance in fulfilling the needs of many stakeholders is essential for the operation of any effective system. However, a truly excellent compromise ensures that no one is genuinely content. This is the current difficulty that streaming faces.

It would be harsh to say that streaming has made anyone happy. Every stakeholder has a problem with the way streaming works, maybe with the exception of the user. This implies that any solutions—if they are to be successful, anyway—must benefit all parties involved, regardless of size. And doing so entails addressing the behavioral patterns of streaming that underlie the current problems with royalties.

It's a recurring cliché that music exists in excess. However, the problem is in handling quantity rather than amount per se. Nobody bemoans the excessive number of search results on Google. There are two main reasons why quantity is viewed as a streaming issue:

Creating a two-tier royalty structure by itself won't address either issue. There will still be a long tail. There will still be gaps in your listening. The problem with royalties is supply-side, not demand-side. And by spending time listening to an ever varied volume of music, the demand side is the one creating the issue. It is the behavior levers, not the compensation levers, that must be pulled in order to alter behavior. Using an algorithm multiplier that gives successful artists a higher weight is one method to do this. As a result, success encourages success. However, and this is a very important component, this algorithm multiplier needs to be optimized for various success levels. Thus, similar to how a hit song by a celebrity musician would be enhanced,

Although the algorithm multiplier would solve a lot of today's issues, it would not be sufficient on its own. To increase revenue for all parties involved and increase customer opportunities to become fans, more has to be added to the system. According to MIDiA, adding $2 artist subscription streaming bolt-ons to the system is one approach to do this and add additional value—both monetary and experiential. Another is to divide up artist development and marketing across different platforms.

It is obvious that streaming royalties require revision, but this revision must occur simultaneously with a rebirth of the behavioral architecture that underpins them. In the absence of this, there's a chance that the streaming economy will separate from the fan and artist economies. Maybe that will work to your advantage. Maybe not. It will not, however, be a low-risk, predictable future.

It is possible to build a public database of song ownership via blockchain technology. A parallel music economy, akin to the vinyl or CD market, emerges if streaming companies only confirm the license holder upon receiving a request for a single song. Play on demand licenses are paid for by creators, and they get paid again (though considerably less) if the license is resold. Don't complicate things! It is now again possible to pay musicians for music sales.

All of this can be resolved in a workable, sustainable way that considers POST and avoids setting up artificial boundaries that would allow certain artists to succeed while cutting others in half. The royalties structure ought to be entirely merit-based and based on currently in place procedures. I believe that is what you are supporting because this is the option that has been accessible for years. But since it can't be explained in an elevator pitch, no label, venture capitalist, or strategic partner wanted to hear about it. It's a sophisticated, multifaceted platform/app that caters to consumers while being impartial toward all copyright holders. I developed the app and the platform, and I've shown potential investors far too often. Until I develop a viable audience, no one will be interested.

I'm on the Henry Ford and Steve Jobs bandwagon here; I refuse to inquire what people want. They are clueless about what is feasible, sustainable, or even possible, so how can any Joe-Bag-O-Dounut decide what kind of music app they want to use? Naturally, they'll demand free, endless music! Take note of their actions and modify it to accommodate human nature, peculiarities, and habits. It's evident from the digital graveyard that novelty, fads, and games made up 95% of what came and died. Not a profitable enterprise, which was my goal and attention from the start.

LinkedIn: Eric W. Neumann (99+)

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