The Beat of Disruption: How B2B Marketplaces are Reshaping Music Rights
In the rhythm of daily life, music is a constant. For some, like me, it’s an obsession — Spotify’s Wrapped informed me that I’ve listened to music for over 125,000 minutes last year, which averages almost 6 hours daily, not accounting for YouTube, films, or games!
Even the ‘average’ adult commits over three hours a day to music, a testament to its deep-seated presence in our lives. The music industry is not just vast in audience but monumental in value — over $28 trillion annually — a figure that’s hard to grasp.
The music landscape is also characterized by its rapid evolution. Consider that CDs, which now make up a mere 10% of the market, were once the powerhouse of music revenue, constituting over 95% just two decades ago. The journey of the music industry from vinyl and cassettes — my personal starting point — to streaming is a clear indicator of its transformative nature.
This industry serves as a lens through which we can observe the operations of creative sectors at scale. It highlights potential bottlenecks that such industries might face. Intellectual Property (IP) rights and their related segments are particularly crucial as they bridge the creative and commercial worlds, ensuring that talent is not only recognized but also rewarded in today’s society.
Why Does the Music Rights Industry Need a B2B Marketplace?
Much like other sectors, the music rights market possesses all the characteristics necessary for a B2B marketplace to flourish. It’s a highly fragmented industry, with millions of artists and hundreds of thousands of agencies collaborating to deliver music to billions. The value chain and processes are convoluted and grossly inefficient. The lack of transparency in licensing, technology, and distribution creates a substantial opportunity for a B2B marketplace to disrupt the outdated status quo.
For instance, imagine a computer game incorporating a Beatles classic, reimagined with new lyrics, a modern band’s lead vocals, and portions performed by AI mimicking Michael Jackson. Add to this a multilingual presentation and diverse geographic royalty structures, and the complexity of IP rights management becomes apparent. Such intricacy invites a B2B marketplace to simplify and streamline the process.
Disruption Opportunities in the Music Industry
Many segments of the music market lack platform solutions. Distribution and pricing of music and IP rights, IP use and regulations monitoring, the licensing process, and plagiarism checks are ripe for innovation. A B2B marketplace could also transform interactions between artists and labels or directly with fans, facilitating, for instance, fundraising for new albums. While the elusive ‘hit’ creation remains an art, the journey from guitar string to listener’s heart can be made more transparent and efficient with platform solutions.
The Benefits of B2B Marketplaces
Data reconciliation and improved transparency are at the forefront of a B2B marketplace’s benefits. These platforms can match sound and publishing records, track usage, and make the entire process more transparent. This eliminates costly industry issues and enables the verification and transaction of IP rights in minutes rather than weeks.
Moreover, marketplaces can enhance collaboration across the industry, from songwriting to optimizing label interactions, and overhaul distribution, thus expanding artist reach and pioneering new monetization strategies.
Predictions for the Industry and B2B Marketplaces
- The continued growth of streaming services will likely be bolstered by the development of B2B marketplaces that manage interactions among artists, labels, and streaming platforms.
- We can expect on-going democratization and increased transparency in royalty distributions and artist compensation however, NFT marketplaces and cryptocurrency platforms are not the solution. Whilst we have seen a number of them crop up and for sure, blockchain technology can serve as a solid foundation for industry platforms, they will not positively lead the music rights industry.
- The role of labels as middle-men may diminish, with labels pivoting towards specialization and providing additional value to artists.
- The integration of AI will further transform the IP segment and enhance platforms with more advanced recommendation engines, content curation, and predictive analytics.
The music rights industry stands on the cusp of a transformative era. As a passionate advocate for both music and technological innovation, I see B2B marketplaces not just as tools for efficiency, but as instruments for fairness in an industry where every note counts. They hold the potential to harmonize the needs of artists, producers, and consumers, ensuring that the industry’s future is as dynamic as its past. In this evolving symphony of music rights, B2B marketplaces are the conductors, orchestrating a new era of accessibility, transparency, and creativity.
In the conclusion, a few names from the industry we believe will be leading the play:
- RouteNote | music distribution marketplace, UK
- Ditto Music | music distribution and record label services platform, UK
- Tangy Market | Stock exchange for music rights and royalties, Sweden
- AimiFM | Platform for collaboration of humans and AI and to create continuous music scapes, USA
- Create Music Group | Rights management, syndication, and distribution platform, USA