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@ 2140 Art
2025-04-25 12:56:37Originally posted on 04/12/2024 @ https://music.2140art.com/bitcoins-role-in-the-new-music-economy-more-than-an-ecosystem/
The phrase “New Music Economy” seems to be popping up more frequently lately. It caught our attention recently when we noticed others using it to describe shifts in the music industry—more control for artists, fewer intermediaries, and innovative tools for direct fan engagement.
Initially, we were intrigued but sceptical. What they described didn’t quite feel like a true economy. Was it really something new, or just a repackaging of old systems with modern tools?
This curiosity led us to dig deeper. We came across some of the term’s earliest uses, including a 2007 report titled “Social Interactions in the New Music Economy“ and a 2008 blog post by venture capitalist Fred Wilson. Both framed the “New Music Economy” as a reaction to the traditional industry’s inefficiencies and barriers, championing decentralisation and direct artist-to-fan relationships.
Fred Wilson, for instance, described the “New Music Economy” as an era where artists could bypass labels and connect directly with fans via platforms like SoundCloud, Bandcamp, and Kickstarter. While groundbreaking at the time, these solutions still relied heavily on legacy financial systems. The flow of value was streamlined, but the underlying economic structure—centralised payment processors, fiat currencies, and reliance on intermediaries—remained intact.
This made us realise something important: without fundamentally rethinking the financial layer, what we’ve seen as the “New Music Economy” is really just a better ecosystem. Bitcoin, however, has the potential to transform it into a true economy.
What Defines an Economy?
An economy isn’t just a system—it’s an infrastructure for creating, exchanging, and preserving value. Historically, the “New Music Economy” has been more about redistributing control than reinventing the infrastructure itself. Platforms like Spotify or Patreon help artists reach audiences and earn money, but they remain bound by centralised, fiat-based frameworks.
Fred Wilson and others rightly pointed out that artists no longer need gatekeepers like major labels. But what was left unsaid is that they’re still beholden to payment processors, inflationary currencies, and the rules of the traditional financial system.
Take, for instance, the concept of “fairness” in royalties. Artists rely on complex systems managed by labels and platforms to determine how much they’re owed. This creates an inherent opacity, and disputes over unpaid royalties or missing revenue streams are common.
And let’s not forget geography. Artists in emerging markets are often excluded from the global music economy due to a lack of accessible payment systems or expensive remittance fees.
This is where Bitcoin steps in to change the equation.
Bitcoin: The Financial Layer the Music Industry Needs?
Bitcoin does more than streamline payments—it replaces the entire financial layer with one that’s decentralised, global, and incorruptible. Here’s how it transforms the “New Music Economy” into something truly new:
- Censorship Resistance: With Bitcoin, artists can receive payments directly, bypassing platforms that can freeze or block funds (a real risk with PayPal, Patreon, or even banks). This is especially vital for artists in politically or economically unstable regions.
- Global Accessibility: Fans can support artists without worrying about remittance fees, currency conversions, or banking infrastructure. Bitcoin opens up a global marketplace for music.
- Deflationary Currency: Unlike fiat, Bitcoin isn’t subject to inflation. What an artist earns today won’t lose value tomorrow—it may even appreciate, making it a reliable store of value for long-term financial stability.
- Immutable Royalties: Bitcoin’s programmable nature allows for smart contracts. Artists can automate royalty splits and ensure they’re paid instantly and transparently whenever their work is sold or streamed.
Imagine a world where every time a song is streamed, payment flows instantly and directly to the artist, producers, and collaborators. No waiting months for a royalty cheque, no confusing statements, and no middlemen taking a cut.
Fred Wilson’s vision of artists controlling their own destinies was ahead of its time. But Bitcoin takes it a step further, addressing the economic shortcomings of platforms by creating a financial system that artists and fans can truly own.
Expanding the Vision with Real-World Examples
Let’s look at a practical scenario. An independent artist uploads their music to a decentralised streaming platform powered by Bitcoin. Every stream automatically triggers a micropayment through the Lightning Network, or other Bitcoin Layer 2’s splitting revenue between the artist and their collaborators according to a smart contract. Fans can also tip directly, sending Bitcoin with no middleman fees or delays.
Or consider an artist in a country with hyperinflation. Without access to stable banking systems, their earnings in local currency rapidly lose value. With Bitcoin, they have a deflationary currency that retains its worth, empowering them to support their craft sustainably.
For fans, Bitcoin creates new opportunities to engage directly with their favourite artists. Imagine buying concert tickets or exclusive content directly from an artist’s website using Bitcoin, without the inflated fees of ticketing platforms.
This approach isn’t just theoretical. Platforms exploring decentralised music solutions are already experimenting with these concepts, hinting at the vast potential of a truly Bitcoin-powered music industry.
The even further takeaway is that deeper-diving musicians, who understand the importance of running and operating their own Bitcoin nodes, never have to trust any platforms whatsoever with uploads either. Through protocols like V4V and Podcasting 2.0, musicians could in fact keep all of their masters on their own hard drive or server and stream them across every major platform with a feed.
Just these things at the tip of the iceberg with Bitcoin already brings being both the platform and the payment processor directly into the hands of the artists themselves; the bonus is that they can also be on every streaming platform at the same time without ever signing up to or involving another entity.
Without Bitcoin, It’s Just a System Upgrade
Let’s be honest: without Bitcoin, the “New Music Economy” doesn’t quite live up to its name. It’s still reliant on intermediaries—banks, payment processors, and fiat currencies—that introduce friction, fees, and vulnerabilities.
Sure, platforms like Patreon or Bandcamp make it easier for artists to earn, but they’re not fundamentally changing how value flows. It’s more accurate to call this a “New Music Ecosystem”—an improvement but still tethered to the old system.
Bitcoin flips the narrative. It removes gatekeepers entirely, enabling a direct, censorship-resistant, and inflation-proof flow of value between artists and fans. It’s not just a tool for payments; it’s the foundation of a new, decentralised financial infrastructure.
A Revolutionary Shift, or New Music Economy?
Fred Wilson’s early vision and the 2007 discussions around the “New Music Economy” planted the seeds for artist empowerment. But Bitcoin brings those ideas to their logical conclusion, creating a truly global and sovereign economic framework for music.
So, is the term “New Music Economy” overused or misunderstood? Without Bitcoin, it might be. But with Bitcoin, we’re looking at something genuinely revolutionary—an economy that finally lives up to its promise.
The question now is: are we ready to embrace it?