The music industry and technology? To borrow Facebook’s lingo, the relationship is complicated.

File-sharing service Napster’s emergence in 1999 was the cue for more than a decade of fear, loathing and ill-fated decisions from major music companies, and perceptions of a gulf between the worlds of music and tech that linger to this day.

That’s not the whole story. Even in 1999, there were plenty of music executives excited about digital disruption rather than panicked by it – even if many were too junior to influence their bosses’ strategies driven by the latter emotion.

In 2016, the two worlds are more intertwined, culturally, than ever before. Anyone in tech peddling claims that “the labels” are a homogenous group of digital dinosaurs is as blinkered as anyone in music suggesting that “tech people” just want to enrich themselves and their investors at the expense of musicians.

The fact that you’ll still hear both views shows that for all the bridges that have been built between the music and tech industries, tensions still bubble below the surface. Or, as happened with 2016’s bitter war of words between labels and YouTube, explode into the open.

The annual Midem conference, which turned 50 this year, used to be a glamorous affair where more than 10,000 music execs gathered to strike deals and flaunt their (large) expenses budgets in the hotel bars of Cannes.

In 2016, Midem is much smaller – “4,400 or so” delegates according to its organiser – and with many fewer high-rollers in the bars, but a lot more discussion on conference stages about the digital present and future for music.

Imogen Heap is one of the first musicians exploring the blockchain. Photograph: Christie Goodwin/Redferns

New kids on the blockchain

2016’s buzz-panel of choice for any music conference is blockchain technology. The industry is getting its head around how the idea of a decentralised database of music rights could solve some of its pressing problems.

One of the biggest: knowing which labels and publishers (and, at the next level down, which performers, songwriters and producers) own the rights to songs and recordings, and what their split of the royalties is.

The blockchain might even sort out the payments of those royalties: supporters of the technology foresee a world where every time a song is sold or streamed, the royalties are divided up and paid immediately.

“Amazon Prime can deliver an object to your house in an hour. We ought to be able to process a music payment in less than two years,” said Vinay Gupta, release coordinator and general strategist for blockchain firm Ethereum.

Musician Imogen Heap, who has launched a blockchain-based platform called Mycelia to experiment with the technology, compared a database of “permanent records of who did what” to another entertainment industry’s most famous website.

“The film industry did this with IMDB … if you were going to redo iMDB today, you’d do it on the blockchain,” she said. “The core model is something kinda like iMDB that handles payments as well as information about who did what,” added Gupta.

Could YouTube (chief business officer Robert Kyncl pictured) be a better friend to music companies? Photograph: Danny Moloshok/AP

YouTube solution in sight?

Meanwhile the anger of many music industry companies about YouTube in 2016 cannot be underestimated: they genuinely see the company as determined to destroy their business.

Many of those critics are hoping for new legislation to strip YouTube of its “safe harbour” protection, putting it in a much weaker position when striking licensing deals with music firms.

At Midem, one well-connected industry exec – Daniel Glass of Glassnote Entertainment – suggested that this year’s attacks may have stung YouTube enough to change its tune already. “By the end of the summer we’ll see a settlement. They can’t be deaf to what’s going on,” said Glass in a panel on the future for music.

“The revolution always begins at the bottom. The little guy, the indie artist, the country singer or that rapper who’s going to be upset. They galvanise revolutions, and I think there’s a mini-revolution building in the world with people who are upset about compensation,” said Glass.

“By the end of the summer I think you’ll see a new system or monetary compensation package that people will be much happier with.”

Spotify’s Today’s Top Hits playlist has 8.5m followers

Playlists are powerful – but who controls them?

According to various estimates at Midem, around 20% of plays on the big streaming services like Spotify and Deezer come from the playlists created by their in-house teams of editors. Spotify recently said that its playlists are generating 1bn streams every week.

These playlists have growing clout when it comes to breaking new songs and artists. Spotify’s Today’s Top Hits playlist now has more than 8.5 million followers, and according to industry analyst Mark Mulligan, generates 120.4m streams a month.

Mulligan’s company Midia Research recently ran a survey that found that “the percentage of people who make their own playlists on streaming has dropped by 10 percentage points in just one year”.

It’s a sign that many of the new users added by Spotify in that last year are happy to turn to its Today’s Top Hits, Afternoon Acoustic and Your Favourite Coffeehouse playlists rather than make their own.

Mulligan talked about two possible effects. One: globalisation, where the popular playlists mean the biggest (invariably American or British) stars rack up the most streams around the world at the expense of local artists. Two: internationalisation, where those local artists can find new fans outside their home countries if they make it on to those popular playlists.

“The playlist curators are the ones who will ultimately decide whether streaming is about globalisation, or internationalisation,” he said.

Sitar Teli and Mark Piibe on stage at Midem. Photograph: Stuart Dredge/Public Domain

Labels want to be friends with startups. Don’t they?

It’s also true that a number of people in the tech world still perceive labels’ attitudes towards startups as either not understanding them, or wanting to squeeze money out of them until the pips squeak.

“It’s been a really shitty industry to work with for years,” said Sitar Teli, managing partner of VC firm Connect Ventures, whose past investments include SoundCloud.

She suggested that the music industry’s experience with filesharing had created distrust. “The reaction to that was to be distrustful of technology companies … There’s a lot working against startups that’s related to the structure of the industry, and to the concentration of power.”

Teli later clarified that music companies are more willing to strike deals with startups than they used to be, and that was mirrored by Mark Piibe, digital boss at major label Sony Music, who (slightly awkwardly) was sitting next to Teli throughout her comments on how difficult his industry has been to work with.

Piibe said labels want to see startups as partners, not enemies or cash cows to be milked. He cited the latest crop of social music apps like Flipagram and Musical.ly as examples.

“We do have deals with a lot of the companies,” said Piibe. “Typically, these things end up in licensing relationships rather than litigation.”

Spotify is the biggest streaming service, but can it ever make big profits? Photograph: Christian Hartmann/Reuters

Streaming losses and fear of big tech

The final key theme of Midem was something that’s being talked about more openly within the music industry: whether music-streaming services that aren’t backed by a technology giant (namely Apple, Google or Amazon) can survive in the long term.

Spotify made £1.5bn in 2015, but lost around £140m that year – and has racked up more than €566m of losses since the start of 2009. Its fellow “pureplay” rivals are a similar story. Pandora? Losses. Deezer? Losses.

Many Midem attendees were chattering about Australian streaming service Guvera which claims 14 million users and has just filed to go public, yet whose revenues of just $0.87m in its last financial year saw it post a $58.9m net loss.

In her Midem panel, Teli described Spotify as “massively unprofitable” and said she judges the health of companies by whether they can be independent and profitable.

“I actually can’t think of a music-tech company that has done that. Which is very worrying,” she said. “Even the largest, most successful company in this sector is Spotify, and it lost a couple of hundred million dollars last year, so it’s still not there.”

Veteran entertainment industry lawyer Joel Katz expressed similar sentiments in another Midem panel. “The record companies made a bet that streaming was going to be the future, but unfortunately we have seen that so far, no streaming company has ever made a dime,” he said. “They don’t report profits and they have very little ability to make profits.”

Midem’s panel session on how startups and big music companies can work better together.

The prospect is of a digital-music world dominated by the big tech companies. A prospect that’s already being raised by some of the streaming services trying to figure out the economics.

“The music industry is going to be a miserable world if your only path to your fans is via Apple or Facebook or Amazon or Google, because those are not music services,” said Pandora’s chief operating officer Sara Clemens.

Her point was that those companies’ bigger priorities are not how to make money for musicians and the music industry, but rather selling devices (Apple), selling advertising (Google, Facebook) or selling memberships (Amazon), with music likely to be a loss-leader.

Then again, the music industry spent much of the downloads era complaining about the dominance of just one company: Apple and its iTunes store.

Perhaps three (or four, if and when Facebook makes a music move – many of the people who gossip about Spotify’s long-term future think it will follow WhatsApp, Instagram and Oculus Rift into Mark Zuckerberg’s arms at some point) tech giants competing in the music-streaming world is a better prospect.