Let’s find out how a plausible path to a future with a broadly accepted music blockchain would have to look like. As you will see, the industry incumbents — the major labels — likely wouldn’t play a big role in it. And Spotify is particularly well positioned to pull it of (compared to anybody else).¹

A word of warning: I don’t claim that the following is going to happen. But I do regard it as feasible:

Create a digital music distribution system that establishes a direct relationship with users Grow it to the point that artists can reliably use your system to reach a sizable audience and establish a working business model Once the platform scaled on the user side, start offering services that present a different solution to managing rights & royalties. Target it at new artists. Don’t try to own the rights. Simply create the infrastructure that gets the job done. Iterate on that system until it works flawlessly and grow it over time Once it has proven to be a workable solution, start to target established artists

A few remarks.

I’m well aware of the delicate balancing act streaming services and labels are performing in their struggle for power. I’ve written about it at length. But the appeal of the approach above is that you might be able to pull it off without creeping on the label’s turf too obviously. You don’t set out to take artists they already signed away from them. It’s basically the Soundcloud approach — yet with an established distribution platform and a business model in place.

A critical component would be to not even try to own the rights. Currently, any large-scale attempt to do so by a streaming platform would certainly result in displeased labels. As any streaming service relies on the access to their catalogues, that’s not an option. But you might get away with trying to build a rights-management infrastructure, especially when targeted at newcomers. It doesn’t necessarily take blockchain technology to build such a system, but it certainly has some useful things built-in.

If you could pull that of, time would work in your favor. At least if your system is profitable. Than, more and more young artists might end up using it. At that point, having a large-scale distribution platform and a business model in place matters. Young artists love Soundcloud. But once they become famous, Soundcloud no longer is a good option because it doesn’t make you money.

Spotify is in a different position though. While the company is still fighting to become profitable (its new deals certainly are an important step in the right direction), it is continuously growing its base of paying users. A few months ago, it has crossed the 50 million subscriber milestone. That’s great because Spotify’s revenue depends on scale. But profitability is also contingent on the cost of content Spotify has to bear. Lowering these costs by being less reliant upon the labels’ catalogues might go a long way in that regard.

That doesn’t take a full-blown attempt to turn into a label. Creating an alternative rights-handling system as infrastructure for artists might do. It’s not a quick fix because it takes time to come to fruition. But it might be feasible, whereas the former isn’t (at least right now). The prerequisite, of course, is having a large user base that makes it attractive for artists to join.

Spotify fulfills that criteria. It isn’t just another obscure blockchain startup. It is the biggest platform of paying music fans. If anybody is in a good position to try and build such a system, it’s Spotify. Particularly if it can do so without offending the labels in the early stages. To that end, their established relations with the labels (including their minority stake in Spotify) and the sizable revenue it creates for them are assets.

This, in brief, is what David’s analysis, in my opinion, undervalues: Spotify “owns” music users. Hence, it is better-suited to experiment with alternative rights-management models than almost anybody else. In the long-run, such a system comes with upside: the potential to grow into an alternative to labels. Yet, the money Spotify makes them, might just convince the labels to resist not quite as bitterly as they do with every other technology.

Making a desired future happen takes time, the resources to survive the meantime and a good strategic position. Twice so in the face of powerful incumbents. Right now, we don’t even know whether Spotify even wants to go in the direction I laid out. Even if they do, success remains uncertain. But pursuing that path would be aligned with the company’s best interest. And as of right now, they are in a pretty solid position to try.