Vincent Van Gogh, Sammy Davis Jr., Edgar Allen Poe and William Blake. What unites this list of stunning artists in their various fields? All of them died penniless, victims of an artist and patron society that largely ignored the artist while appreciating the art. Now some start-ups are stepping up to redress the balance.
Indeed, if we take Sammy Davis as an example, it is incredible to think that he made $50 million (m) singing, dancing and cavorting with the Rat Pack. Yet by the time he passed away he was impoverished and deeply in debt to the U.S Internal Revenue Service. And following his death, Davis’ estate lost all rights to his name, image and music.
While these artists are now gone, many artists today are in the same position - making genuine works of art - but barely able to survive from their earnings as an artist.
The reason for this disconnect between greatness and monetary gain is the difficulty of centralized patrons. In the nineteenth century the patrons were rich barons and dukes, able to afford to keep artists on the payroll for their own pleasure.
In the 21st century, the patrons are centralized corporations, keeping artists on the payroll for financial gain. Yet much of the best art never produces monetary gain, either for the artist or those who promote them, because corporations take the bulk of profits. And, it would probably shock many fans to discover just how little artists make from the corporate structures that control their work.
How Big Are The Art & Music Markets?
According to The Art Market Report, which is issued by The European Fine Art Fair (TEFAF) each year during its 10-day March event in Maastricht in The Netherlands, this year the art market was sized at c. $40 billion (bn).
While this is a big number produced by TEFAF, whose findings are regarded as something of bible for costs and trends in the world’s art market, the figure shrunk from last year’s $60bn figure. This decline of around $20bn was accounted for by a change in the metrics used in measuring the art market by the new economist and report’s author, Rachel Pownall, Maastricht University professor of art market & finance.
Moving over to the music business, according to the IFPI Global Music Report (formerly called ‘Recording Industry in Numbers’) published this April, the global recorded music market saw revenues grow by 5.9% in 2016, which represented the highest rate of growth since the IFPI started tracking the market back in 1997.
And, with total revenues hitting $15.7bn, 112m users of paid streaming subscriptions driving streaming revenue growth of 60.4% and digital income now accounting for 50% of global revenues, there would seem much to disrupt. Their report, which contains comprehensive data for nearly 50 territories, is one indicator of the state of play.
Separately, a forecast from statista of global music industry revenues worldwide from 2012 to 2015, as well as a forecast for 2016 to 2021, indicated that revenues will grow from $45.5bn in 2012 to just over $57bn in 2021.
However, despite the growing market for music services, the present bureaucratic system of labels, artist managers and distribution services are argued to have largely choked the smaller artist who unable to negotiate sponsorship deals with big brands, and who rely on direct artist-to-fan sales.
Add to that centralized streaming platforms can take up to 80% of the entire revenue stream, which clearly has an impact on many small artists. Consequently artists today are forced to rely on monopolized streaming platforms such as Spotify, which pay as little as $0.0003 per play. While established artists that rely on tours and sponsorships can handle this, smaller artists out there who have a fan base of a couple of thousands simply struggle to survive on this tiny revenue stream.
So enter Blockchain technology, a system designed to distribute the centralized management of data. The technology that supports Bitcoin and other cryptocurrencies and is now being used to decentralize other industries as well.
Given that the blockchain is a distributed ledger and completely secure and transparent, users are able to be connected to each other without the centralized hub of a corporation. Simply put, management has been replaced by machines.
In this new decentralized world, art has been one of the first and greatest use cases. Artists who otherwise would have been forced to use a large-scale centralized company to distribute their work are now able to distribute work in a decentralized way, and to receive rewards for their creations without profit-skimming corporate structures in place. And, are there entities seeking to disrupt matters, although whether they can succeed in their endeavours is another matter.
Monetizing Internet Content
WildSpark, for example, is a new decentralized platform that allows videos, text and other content to be shared between users. The platform is the first application built by a team at Synereo and is designed to create a system where artists can upload and offer content, be rewarded for that content monetarily. And, all without the need for a corporate structure.
The system is built on blockchain technology and uses a digital currency called AMPs. Currently worth about $0.23 each, AMPs are used to reward content creators and can be given to creators in order to have access to download or share their content.
Users are able to give AMPs as a way to reward creators monetarily, while creators are allowed to use the digital currency as a way to buy attention from users. The more AMPs, the greater attention a video, article or other content piece receives. Well, that is the logic.
By using this monetized system, a market for attention is born. Content creators have a way to upload, distribute, and advertise their creation, and users (‘curators’ in the WildSpark ecosystem terminology) are able to reward creators they appreciate, and also benefit themselves as content is accepted.
Artists are able to promote their latest works - in whatever medium - and receive compensation directly and nearly instantaneously via the tokenized, decentralized ecosystem created by Synero’s AMP model.
The tech team behind the Synereo/WildSpark development. (Image: Synereo).
Other industries - from the music business to entrepreneurs in the Virtual Reality (VR) space amongst others - are getting in on the act too. The need for decentralized systems to distribute artistic content is clear. Companies are taking advantage of the blockchain system to create new and exciting ways to share other content as well.
Another organization, Opus Foundation (Opus), has begun offering a way, via their digital tokens, for musicians to upload new music without the cost of paying YouTube, Apple or Spotify.
Touted as a “decentralized music-sharing platform”, Opus claims to address the issue of music ownership and sharing in what is described as “an infrastructure and protocol level” by leveraging the speed of a novel Interplanetary FileSystem on the Ethereum blockchain. (Note: A recent 42-page whitepaper on the concept behind Opus looks at the issues being addressed and outlines the technology and the project's roadmap).
Here users of the platform can also download and enjoy the music anywhere in the world, since the blockchain allows for a fully secure network of ownership. Some 97% of profits are funneled directly to the artists themselves - all in real time. It sounds all too good to be true.
Founded by ‘Forbes 30 under 30 winner’, Mateusz Mach, a 20-year old Polish serial entrepreneur from Gdansk, Poland, this company created as a simple but highly effective tool for artists and users alike. Removal of centralized music platforms will help to produce greater freedom for artists, greater openness and availability for users, their mantra goes.
It was Mach who founded his first start up whilst still in middle school, unveiling his app, Five, and raising around $150,000 finance in the process from venture capitalists in his homeland - not Silicon Valley. This app essentially allows people to send one another custom hand signs, akin to what rappers do. With that slug of capital he wanted to turn Five into the ‘world's first sign-language messenger’ for deaf people.
Mateusz Mach, Co-Founder and COO of OPUS, created the world's first sign language messenger while he was in high school. (Photo credit: Five-App PR).
Likewise Cappasity, based in Santa Clara, California, has a stated mission to “make 3D digitizing as easy as photography”, has created a system that allows artists creating 3D imagery to monetize their content and share it via their tokenized ecosystem.
In all these scenarios, companies are seeing that, by utilizing blockchain technology, artists and content creators are able to get paid for the work that they are doing, while at the same time incentivizing others to find it.
The decentralized system that blockchain provides creates a platform where management is ‘machined’, and profits are kept. The future applications may be limitless, as the patron economy for art is destroyed by the power of blockchain as some protagonists contend. It’s all rock ‘n’ roll. Carpe diem.