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Blogpost - March 25, 2016

Rock the Labels

Will it be likely that the current type of licensing in the next decade is still the main type of licensing for the digital streaming audio market in the USA?

MARKET INSIGHTS FOR THE STREAMING MUSIC INDUSTRY
Are you ready for some darkness, are you ready for some good time. The music landscape is ever changing and the way of orchestrating, delivering and monetizing lifestyle, mood, brand and leisure will flip back to empower the original owners again. The increase of connectivity and the rise of decent networks make it normal to stream data as we go, in the car, in the train, at home, in a game on a device of choice. In 2014 Edison Research and Triton Digital conducted a research related to streaming audio in the United States, the result is that the audio consumption time for users older than 13 years the daily behavior is 4:05 hours per day per user.

    

The current market is populated with a great variety of digital players however these vendors only represent a fragmented share of the total amount of listeners. The overview of the same research will tell us that 66% percent of the audio consumption is related to non-digital media, the other remaining 34% is dedicated to digital media. Within this share there is drilldown of: 20% for downloads (itunes, google play, amazon mp3, emusic and wallmart), 12% for streaming (spotify, apple music, pandora, rdio, deezer, tidal, google music, soundcloud) and 2% for podcasts.

The revenue in the United States, consumer and advertising spend on music listening, takes up over a third of listening time, but less than a fifth of total revenue; 4.5 billion Dollars. The three biggest online music services last year that dominated were youtube, pandora and spotify. These vendors have different user experiences and different monetization models however the common factor of these is the fact that the audio assets are being played or streamed. For example; Spotify has 75 million users (20 million paid) worth a 1.2 billion Dollars in subscriptions resulting in a 1.3 billion Dollars in revenue from which 100 million Dollars is coming from advertisement. Pandora has 83 million users (4 million paid) worth a 190 million Dollars in subscriptions resulting in a 920 million Dollars revenue from which 730 million Dollars is coming from advertisement.


“The system will be fair and transparent. Because the artists have complete control, we will split the money with exactly who should be paid. And because everything is connected through blockchains, the transfer of money will be instantaneous. We can also decide whether we want to release our music for free, or what the subscription base should be, or whether to agree to a per-play model. It is liberating” - Imogen Heap -


RECORD LABELS ARE LOSING OWNERSHIP OF THEIR ASSETS
With a dependency in third party intermediaries record labels are relying on other business models in the digital music landscape. Streaming services are on their way to becoming dominant players. Music consumption is shifting from ownership to access. Record labels are losing its revenue streams to a wide variety of online vendors. And vendors making sure that record labels have limited control regarding the actionable data and business intelligence that they collect.

MUSICIANS ARE STRUGGLING TO IDENTIFY RIGHTFUL REVENUE
Large pools of royalty revenue end up outside the artist’s reach in a so-called ‘black box’. There is no industry-wide system that is tying the knot (usage to ownership). Artists don’t receive the rightful royalties they deserve having major labels and publishers benefit from the currently complex and inaccurate system. As a result artists are fighting digital music services to once again gain control over their music assets.

THE MUSIC INDUSTRY IS HEADING TOWARDS ITS NEXT DISRUPTION
By harnessing the power of the blockchain record labels are able to serve their music through an immutable and open platform. Orchestrate assets; music, copyrights, royalties and licensing, that are being shared throughout the digital landscape. A platform to manage and track online payments through the value chain directly from fans to music creators. A great way to create more transparency in the digital landscape of music.

       

THE ORCHESTRATOR
The near future will bring us new layers of trust. These layers of trust will initiate new business models and new challenges. The music industry is losing control over there content and have historically a bad score related to artists and the management of their interests. The man in the middle has resulted in damaging the relationship between eg. artist and label. There are now some new and exciting solutions introduced to reclaim trust from the majority of artists towards the music industry. A register that monitors all played content and transfers fees based on ownership and rules; briljant!

The solution that we are working on at “Alvis” is being centred around the thought that different types of smart assets can be monitored and monitezed on a new decentral method. The main thought behind it stays the same, you want to take back control over what was in the first place; yours. The orchestrator service in Alvis reaches out in giving individuals, groups and or organisations the ability to add business logic and business rules attached to their indiviudal assets or to their complete ecosystem. These new platforms have complete control over the costs that have been made as well as the costs that will be split up and transfered to all beneficiary stakeholders.

THE MONITORING
The platform is returning insights from our high performance computing instances. Our challenge was to search for new and next level methods to get all this valuable blockhain data back to the main users and present this in a way that they can do their jobs more efficient and at the same time reduce the costs of that individual or organization.

The Alvis monitoring is providing everything you need in terms of smart assets monitoring, reporting and management. It gives insight in new trends, new hotspots, new views for the allocation of budget, entertainment gaps, career opportunities and many more. The advantages are therefore advanced reporting, tracking and monitoring of these smart assets, segmentation of assets flows insights, flexible charting levels and the ability to monitor the allocation of budget. The platform also has the possibility to share notifications and alerts in case of abnormal behavior of the usage of the smart assets.

THE WARP DRIVE: DISRUPTION AND CONTROL
The upcoming years a significant change will take place. New creators, directors, makers and artists will arise. New mechanisms of monetizing ownership will gradually replace the dinosaur license structure. Not only the owner will gain back control but new business intelligence and business models will evolve from this opportunities. Face it; decentralize what can be decentral and centralize what needs to be central. Sounds simple but actually it’s a hard mindset for a huge amount of current business models.

Alvis has processed these signals of neo control plus disruption and created an platform in which smart assets can be managed. Based on the contracts and conditions thess assets will always be shared under the same conditions. We provide a new way of transacting and splitting credit flows control within an ecosystem for any organization. In the future changes will take place; be it the music industry, be it the independent movie maker, be it the entertainment industry, be it new education services, be it current career services, be it the energy supplying farmer, be it the new housing services or be it the photographer with the stock photography licensing challenges. Alvis will provide these services for all these types of assets and control your ecosystem immediatly by taking advantage of the trust, fair transactions and new actionable insights.


Signal, the licensing industry is at a dead end. The license is a mausoleum. The license is an outdated husk, and the license will be destroyed. Yes: The license of the future is no license at all.

Tags algorithms datainfrastructure api innovative

Leo Bekhuis Technical Strategist 3 posts

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