This week’s strike by Hollywood actors, who have joined writers on a work stoppage, reflects a hard truth about the Web2 economy: the platform streaming industry’s economics don’t work.
It’s another reminder that everyone involved in creative production should now be looking at Web3 solutions, irrespective of ill-informed media commentary that has stripped the term of its mainstream appeal.
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During the COVID pandemic, a battle for market share saw platforms like Netflix, Amazon Prime, Hulu and Disney Plus fork out big for all manner of content. Now, makers of feature films, TV series and documentaries are being repeatedly shown the door, which is why there’s no money to pay actors or writers.
In music streaming, it’s arguably worse. Spotify now completely dominates the market. Pandora, owned by Sirius XM, is a shadow of its former self, as is Rhapsody, which rebranded to Napster after it acquired the legendary file-sharing service’s name in 2016 and then was acquired by blockchain developer Algorand in 2022. Yet Spotify itself has never made a profit since its founding in 2009. Last year, it posted a $430 million loss, its third biggest ever.
And the musicians? Well, artists reportedly earn a measly one third of a cent from each Spotify stream. During an interview at the Milken Institute, hip hop star Snoop Dog put it succinctly: ”can someone explain to me how you can get a billion streams and not get a million dollars. That s__t don’t make sense.”
If it’s not the platforms or the musicians, then, who are the winners? Maybe it’s the record labels, which a decade ago infamously inked multibillion deals with Spotify and other streaming platforms to license their music. (Spotify recently said total payments it has made on royalties approach $40 billion.)
By keeping so much for themselves and leaving musicians with the dregs – the labels could be killing their own business. New musicians are abandoning them. To make ends meet, they’re working in content marketing, or producing soundtracks for online games or finding other…
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