Jeff Ponchick is the co-founder and CEO of Repost Network, a music distributor on a mission to help independent artists make a living from their work. Prior to Repost, Jeff was an early employee at Jukin and Fullscreen.
In the latest episode of All Things Video, we discuss digital’s tremendous impact on the music industry, from online piracy sites like Napster’s erosion of physical sales to the advent of digital distributors. The iTunes Store, which launched in 2003, pioneered transactional monetization and a consumer-purchasing shift from albums to singles. And Spotify, which followed in 2008, birthed a new era of subscription music services. (You can listen to this podcast on Apple or right here).
These digital distribution platforms weakened the power of traditional record labels and led to an explosion of new artists. As I observe during the show, “The scarcity problem is gone. Before, there was a limited amount of radio playtime. There was a limited amount of promotional space for physical distribution. And now, those barriers have been eliminated. Through online streaming services, anyone can create, release, and monetize their own content.”
This is a great sign of progress, but the music industry still has a long way to go. As Jeff explains, “Of the $38 billion per year in the music industry, only 12 percent of that is paid back to the artist.” This is largely due to unnecessary intermediaries and systemic inefficiencies for claiming royalties. But new technologies like blockchain offer promising solutions to the complex rights issues, while new monetization approaches offer independent artists more opportunities to earn a living than ever before.
Near the end of our discussion, Jeff and I evaluate the value gap between ad-supported and subscription-based streaming services, and we comment on the resurgence of touring and music festivals as a lucrative means of offline monetization. Finally, we offer a few predictions for the future of the music business, including the continued rise of independent artists.