What is the Problem?

The Web2 music streaming industry is inherently imbalanced, prioritizing mainstream artists and leaving independent musicians with few opportunities to earn and grow. Platforms like Spotify and Apple Music funnel the majority of revenue to top-charting artists, while smaller creators receive minimal payouts and face challenges in gaining visibility. This inequity in compensation and exposure makes it increasingly difficult for emerging talent to build sustainable careers in an industry dominated by a handful of major platforms.

1. Unfair Revenue Distribution

• Streaming platforms like Spotify, Apple Music, and YouTube take a significant cut of revenue, leaving artists with fractions of a cent per stream.

• Artists often receive less than $0.005 per stream, making it difficult for independent musicians to earn a sustainable income.

• Payouts are routed through third-party intermediaries (labels, distributors, and publishers), each taking a portion before artists see their earnings.

2. Long & Inconsistent Payout Cycles

• Artists must wait months to receive their royalties, making it hard for them to support themselves financially.

• Payment structures are often unclear, with platforms adjusting royalty rates based on their own business models rather than artist needs.

3. Lack of True Ownership & Control

• Artists don’t own their music data on Web2 platforms, meaning their content can be removed, restricted, or demonetized at any time.

• Music distribution is controlled by centralized gatekeepers, limiting how artists monetize and distribute their work.

4. Limited Fan Engagement & Monetization

• Fans consume music but don’t benefit from the streaming economy. They are passive listeners, with no financial stake in the success of the artists they support.

• Artists have few direct revenue opportunities beyond streaming, relying on merch, touring, and label advances to supplement income.

5. Platform Dependency & Algorithmic Bias

• Success on Web2 platforms depends on opaque algorithms that prioritize major-label artists over independent musicians.

• Discovery is pay-to-play, with major record labels spending millions on playlist placements and advertisements, leaving independent artists struggling to gain visibility.

6. Lack of Transparency & Middlemen Fees

• Artists often don’t know how their royalties are calculated or why they receive certain payouts.

• Traditional music distribution requires multiple intermediaries, each taking a commission, reducing the amount that reaches the artist.

The Web2 music streaming model is fundamentally flawed, as it prioritizes platform profits over artist empowerment and fan engagement. A new model is needed—one that puts artists in control, rewards listeners, and removes unnecessary gatekeepers.