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Music streaming and revenue

Music streaming platforms are often presented as a success story. After years of declining revenues caused in part by piracy, streaming services made music easily accessible and helped the recorded music industry return to growth.

However, this success has not benefitted all actors equally. Research on the streaming economy suggests that revenues are increasingly concentrated among a small number of major rights holders. While digital technologies were initially expected to lower barriers and benefit independent artists and niche genres, streaming markets appear to reinforce the dominance of established players.

One reason may be the growing importance of visibility and marketing. When listeners have access to tens of millions of tracks, attracting attention becomes as important as producing music. Major labels have substantial marketing resources and extensive catalogues, giving them significant advantages in recommendation systems, playlists, and promotional campaigns.

The exact distribution of revenues remains difficult to assess because many contracts, agreements, and platform arrangements are protected by non-disclosure clauses. Independent artists and labels frequently argue that streaming has not improved their economic position to the same extent as it has for major industry actors (Nordgård, 2017).

Licences and copyright institutions

Research also suggests that contemporary copyright enforcement is increasingly mediated by digital platforms. While copyright law is intended to protect creators, the practical enforcement mechanisms deployed by large platforms often favor actors with the resources to navigate and influence these systems (Kaye, 2021). Copyright governance and enforcement practices may play a role as important as digital platform governance in shaping the contemporary music ecosystem (Hesmondhalgh, 2023). Independent artists and small labels therefore face a double challenge: competing for visibility in highly concentrated streaming markets while also navigating opaque copyright enforcement processes.

Creative Commons licenses offer one possible avenue for addressing some of these issues by giving creators greater control over how their works can be shared, reused, and distributed. However, their wider adoption depends in part on the cooperation of state managed organizations such as SACEM and GEMA. These organizations play a crucial role in ensuring that artists can experiment with more open licensing models while still benefiting from collective rights management and protection against unauthorized exploitation.

Governance, transparency and the fediverse

These debates highlight two recurring concerns: governance and transparency. Who controls music discovery? How are revenues distributed? Which actors benefit from recommendation systems, platform design and licencing laws?

The previous points, together with recent research on the Fediverse, suggest that technology alone will not solve the problems of concentration and market power in the music industry. We do not subscribe to a techno-romantic vision in which decentralised technology automatically produces fairer outcomes (Xavier, 2024). On the contrary, meaningful change requires collective action. We need to build inclusive communities and organisations that can influence not only technology, but also the legal, economic, and cultural structures that shape music distribution and discovery.

Federated music platforms can nevertheless contribute to this effort. By organising music communities around multiples instances, they create opportunities for music discovery that are driven by social relationships and shared interests rather than exclusively by marketing budgets and platform interests. This may reduce some of the advantages enjoyed by actors with the largest promotional resources and allow a broader range of artists and labels to reach audiences. Federated infrastructures can also provide artists and labels with greater freedom in how they distribute and present their work.

However, decentralised platforms alone are not enough. We also need a common front capable of advocating for laws, licensing frameworks, and technologies that better serve independent artists, labels, radios, cultural organisations, and listeners. This could include promoting wider recognition of Creative Commons licences, exploring fairer compensation models for artists, increasing transparency in recommendation and distribution systems, mitigating popularity and algorithmic biases, and respecting artists's preferences regarding how their music is presented and discovered.

The challenge is therefore not only technical but political. Building a more diverse and equitable music ecosystem requires combining technological alternatives with collective governance, institutional engagement, and advocacy for fairer rules.

Funkwhale's role in the ecosystem

  • Transparency: The funkwhale platform serves as the reference implementation for transparent algorithms, e.g. for recommendation and for federating audio medatada
  • Accessibility: Without paywalls, with open licenses, and with decentralized infrastructure, our distribution channels are harder to control and surveil by autocratic regimes or corporate monopolies that rely on DRM, closed ecosystems, and concentrated copyright ownership
  • Diversity: Curatorial independence from large labels, rich metadata, and rejecting dark patterns such as engagement-driven algorithms, attention capture and gamified rewards, help preserve and foster cultural diversity
  • Creator autonomy: Artists have full control over metadata and licensing
  • Democratic governance: Funkwhale is governed by its community to prevent capture by monopolist interests - with the new Funkwhale Collective association, we are formalizing this.

The Funkwhale collective

To bridge these decentralised and collective ambitions, we have created (well actually revived) our association: The Funkwhale Collective. It's a non profit association based in France aiming to develop the Funkwhale software and experiment fairer music streaming and distribution pratices. We are fully aware that the challenges described above extend far beyond what we can do as a single project. However, by embedding these objectives into the association's mission, we establish a clear direction for the development of the Funkwhale software and for our collaboration with artists, labels, cultural organisations, researchers, and other federated projects.

Our goal is not merely to build software. We want to contribute to a broader ecosystem that promotes transparency, accessibility, cultural diversity, creator autonomy, and democratic governance in music distribution and discovery. The Funkwhale Collective provides a structure through which technical development, advocacy, research, and cooperation can reinforce one another.

We believe that meaningful change begins with building projects capable of connecting technological innovation with collective actions. Join us :)

Sources

  • Ferraro, Andres, et al. What Is Fair? Exploring the Artists’ Perspective on the Fairness of Music Streaming Platforms. 2021, pp. 562–84. arXiv.org, doi:10.1007/978-3-030-85616-8_33. Hesmondhalgh, David, et al. “The Impact of Algorithmically Driven Recommendation Systems on Music Consumption and Production: A Literature Review.” SSRN Scholarly Paper no. 4365916, Social Science Research Network, 9 Feb. 2023. papers.ssrn.com
  • Kaye, D. Bondy Valdovinos, and Joanne E. Gray. “Copyright Gossip: Exploring Copyright Opinions, Theories, and Strategies on YouTube.” Social Media + Society, vol. 7, no. 3, July 2021, p. 20563051211036940. DOI.org (Crossref), doi:10.1177/20563051211036940.
  • Lee, Minhyung, et al. “Cannibalizing or Complementing?. The Impact of Online Streaming Services on Music Record Sales.” Procedia Computer Science, Promoting Business Analytics and Quantitative Management of Technology: 4th International Conference on Information Technology and Quantitative Management (ITQM 2016), vol. 91, Jan. 2016, pp. 662–71. ScienceDirect, doi:10.1016/j.procs.2016.07.166.
  • Mazziotti, Giuseppe, and Heritiana Ranaivoson. “Can Online Music Platforms Be Fair? An Interdisciplinary Research Manifesto.” IIC - International Review of Intellectual Property and Competition Law, vol. 55, no. 2, Feb. 2024, pp. 249–79. Springer Link, doi:10.1007/s40319-023-01420-w.
  • Nordgård, Daniel. “Assessing Music Streaming and Industry Disruptions.” Policy Implications of Virtual Work, edited by Pamela Meil and Vassil Kirov, Springer International Publishing, 2017, pp. 139–63. Springer Link, doi:10.1007/978-3-319-52057-5_6.
  • Xavier, Henrique S. “An Evidence-Based and Critical Analysis of the Fediverse Decentralization Promises.” arXiv:2408.15383, arXiv, 27 Aug. 2024. arXiv.org, doi:10.48550/arXiv.2408.15383.