Spotify Launches New Ticketing Service
Spotify has announced plans to launch a new ticketing service so people can buy tickets on their platform, but what impact will this have on the industry?
Streaming platforms have been a source of contention for some time, but this week the royalty rate that artists receive has been increased
For several years, there has been an ongoing battle between musicians, artists and streaming platforms. Tech giants like Apple Music, Spotify and YouTube have profited from the work of artists, who in turn see little in the way of royalties from the streaming of their music.
Streaming platforms have been a source of contention for several artists for some time, but this week the royalty rate that artists receive has been increased from 10.5% to 15.1%, applied retroactively from 2018.
The move comes as the Copyright Royalty Board finally agreed the increase proposed in 2018 would be upheld after it was challenged by Spotify, Amazon, Google and Pandora in 2019. With the challenge to the increase under review, artists have been receiving the original lower royalty rate until a settlement was reached.
On the 1st of July 2022, the court ruled that the increase proposed in 2018 was valid, ending a long deliberation over the revenue that artists and performers are entitled to from streaming services.
Although this is an excellent win for artists with music available via streaming platforms, it’s still only a small step forward for royalties in the digital world.
While it is now commonplace for artists to release new singles, albums and LPs via streaming platforms, the publisher or producer of the music is the initial point of sale. In turn, streaming platforms can be considered a secondary marketplace where listeners can access artists’ music on demand, as and when they choose.
For artists, whether musicians, illustrators or filmmakers, secondary production of their work has always represented a problem. In the physical world, the reproduction of artistic works requires specialised equipment. It was more difficult to do at scale (though pirated copies were semi-readily available). However, the introduction of the digital era brought with it the ability for images, video and audio to be mass reproduced at scale.
Almost as soon as the internet became commonplace in households, the fight against copyright protection began. P2P sharing platforms like LimeWire and Napster offered the public free access to digital content. In turn, no royalties went to artists or creators.
The fight against P2P sharing of copyrighted works continues, but affordable streaming platforms emerged, offering a middle ground for fans and creators. However, this affordability from a fan perspective came at a cost, as the platforms argued there was little profit left for them if they paid the creators of the content streamed the dues they asked for.
The next evolution of the internet, known as Web3 and powered by blockchain networks, may provide a solution. Blockchain offers a way for digital assets to have pre-defined royalty splits governed by smart contracts, a feature which has been explored in the NFT art boom and is finding its way into the music industry.
Creators must be recognised for their work, as creativity is both a process and a talent, the results of which are enjoyed by billions of people worldwide. Smart contracts have begun to ensure that artists and creators of digital media can receive royalties not only on the initial sale of their work but also on any secondary sales. Already they are being touted as something that can change the world.
These royalty splits can also be applied to other industries born of creative work too, like event ticketing.
Artists and performers who put on a show are often plagued by scalpers, who snap up tickets to popular events to sell at a profit. The profit generated by these resales is never seen by any of the people whose hard work is why the event took place.
Issuing tickets as NFT assets on a blockchain would enable these smart contracts to determine where revenue generated by secondary sales is directed. This enables event organisers to allow ticket resales and a healthy secondary marketplace while still ensuring that the hard work of putting on a show is rewarded with relevant dues.
It’s hard to avoid Web3 at the moment. However, with blockchain-based applications beginning to appear in many industries, it’s becoming clear that decentralisation has the potential to transform the way technology serves society.
We’re using the NEAR Protocol blockchain to build an NFT ticketing platform that offers a way for artists and event creators to use smart contracts to determine where revenue from secondary sales is directed. SeatlabNFT also features a secure secondary marketplace where attendees can legitimately resell tickets and NFT collectables that can be bought with confidence.
Royalty splits are a key feature of the SeatlabNFT marketplace, and we wanted to make it easy for event creators and artists to determine who gets paid what, from secondary sales.
Using our seller dashboard, you’ll be able to determine individual or multiple beneficiaries to receive revenue from the secondary sale of any NFT ticket. This will ensure that the hard work of artists is rewarded, and impact the ability of scalpers and touts to profit.
Royalty splits also apply to the NFT collectables that can be minted on our platform. Event creators are able to mint NFTs that can be airdropped to selected ticket holders, who can keep them, or resell them on our secondary marketplace if they choose. Again, smart contracts will govern these resales and a percentage of the resale revenue will be directed automatically to the wallets as specified in the smart contract.
To learn more about our redefining of the event ticketing industry, keep an eye on our socials, blog and subscribe to our newsletter.