By Dwight Miller - May 30, 2024

Since the introduction of the music industry, labels, managers, performing rights organizations and others have earned the bulk of music profits. Most musicians have been screwed over for example, a label may take up to 80% of the revenue generated, leaving the remaining 20% royalties to be split between the artist and any co-writers or producers.

Web3 Music completely disrupts that narrative. Web3 musicians can keep as much as 80% of their profits by using the easy-to-use web3 music technologies.

Reasons Labels Hate Web3 Music

1.   Disruption of Traditional Business Models: Web3 music promotes a decentralized model of music distribution and monetization, which can bypass traditional industry intermediaries such as record labels and publishers. This threatens their established roles and revenue streams, as artists gain the ability to distribute their music directly to fans and manage their own earnings.

2.   Loss of Control: Traditional entities in the music industry typically control aspects like marketing, distribution, and rights management. Web3 technologies, such as blockchain and smart contracts, empower artists to take control of these processes themselves, which can diminish the influence and control of labels and publishers.

3.   Financial Implications: Web3 can change how money flows in the music industry. For instance, smart contracts can ensure that artists receive payments instantly and transparently, which reduces the opportunity for labels and publishers to earn interest on held revenues or to leverage financial terms that are more favorable to them than to artists.

4.   Regulatory and Legal Uncertainty: The use of blockchain and cryptocurrencies in music distribution introduces new legal and regulatory challenges. Record labels and publishers, along with PROs, often deal with complex copyright and licensing issues. The introduction of Web3 adds another layer of complexity, potentially requiring new frameworks for rights management and enforcement.

5.   Technological Barriers: Adopting blockchain and Web3 technologies requires significant technological understanding and infrastructure adjustments. Traditional music industry players may be reluctant to invest in or adapt to these modern technologies due to the cost, complexity, and the risk of obsolescence of their existing systems.

6.   Quality and Curation Concerns: Record labels and publishers often take pride in curating and promoting high-quality music productions. There is a concern that decentralizing music distribution could lead to a flood of low-quality content, making it harder for listeners to discover well-produced music.

Overall, while Web3 music offers numerous benefits for artists and fans without third parties, it presents challenges and threats to the traditional structures and practices of the existing music industry, leading to resistance from established players.