The recorded music industry made $35 billion last year.
Sounds like a lot, but, for context, that’s about 1/10th the value of Walmart.
Can you really say that ALL music, the most beloved artistic medium, an essential part of the human existence, is one tenth of a retail store?
No.
The value of music is artificially capped, downstream of a single pricing decision at Spotify.
$0.0005 per stream.
Every measure of music’s value as an industry is derived from this single figure — a decision made behind closed doors, with no input from artists who made the music.
Music is not a free market. It is a fixed-price market with an infinite supply.
It’s the result of an old guard who never adapted to the internet and has strangled an entire class of creatives for 20+ years using antiquated ideas from physical sales.
So, what’s the answer?
You could say … “pay more for music.”
But we realised that people are not paying $10 per month to Spotify for the music.
They’re paying for the data.
Most people already think of music as free. It’s on the radio, it’s all around us in stores, it’s on video games, movies, YouTube and all over the internet.
People don’t pay Spotify $10 per month for music, they pay for the convenience.
Personal playlists, recommendations, new releases, saved songs, Spotify Wrapped.
Spotify’s value, and hence the entire value of music, is a function of the data on a centralized server.
How much more could music be worth if that data was open to all the artists who could upsell their biggest fans with higher-ticket purchases and rewards?
How much more could music be worth if the data was open to entrepreneurs who could build new products on top of it? Who could unlock more value through new incentives and trust that their access to data would not be turned off at any moment?
The answer is not simply paying more for all music — an impossible battle against the open nature of the internet.
The answer is unlocking the artist-fan relationship that is currently owned by one entity.
It’s hard to extrapolate how much value this would create for the recorded music industry. Our $4 trillion figure is entirely made up — but is it too ridiculous to imagine? We won't know the limits until we remove the artificial caps that are holding us back.
We need to live upstream of the antiquated music valuation model and then, maybe, we can unlock the true potential upside of music.
Coming soon: Poke
Next week we're launching a new app on Oscillator called Poke. Make sure you're in our Telegram chat on Monday to try it before anyone else. Sign the manifesto to join.
