The Music Industry Is Built on Artists, but Shuns Creators

At first glance, gaming and music look strikingly alike: both shape popular culture on a huge scale, generate billions of dollars in consumer spending every year, and place #1 and #2, respectively, when Gen Z consumers are asked how they like to spend their free time.

Having spent the past 20 years in the music business, however, I see two vastly divergent approaches toward leveraging technology, building community, and engaging fans. Never has this competition been more stark than in the months following March 2020’s Covid lockdowns, which sent video game usage surging and music streams tumbling. While both industries are growing—a remarkable feat for the music business, which many left for dead amid the piracy wars of the 2000s—gaming is increasingly leaving all other forms of entertainment in the dust. In 2021, estimates of the gaming market range from nearly $180 billion for game sales alone to $336 billion inclusive of hardware and B2B/B2C software. By contrast, the recorded music business generated $21.6 billion in 2020, roughly one-eighth gaming’s sales.

As it turns out, the gaming and music story is really the tale of two very different industries. Over the past 40 years, gaming has been unyielding in its adoption of new technology, expansion-minded in its approach to copyright and IP management, and heavily committed to forming global communities of deeply engaged fans, allowing many to become creators too. By contrast, the music business has used narrow and punitive copyright policies and has not succeeded in creating immersive, community-driven ecosystems built on top of its large IP base. In its present state, music is treated as disposable, easily swapped out not only for video games but also for podcasts, audiobooks, and news.

The music industry needs to rethink, from the ground up, what copyright and major project releases should look like now. By setting up universal copyright “rails” to enable user-generated content (UGC) at scale, the music industry can restore its image as an innovator, compete credibly with other entertainment forms, and build a new future centered on fans.

Natural selection in the attention economy

The “attention economy” has become a defining feature of the 21st century. Games have become the leading entertainment form in what is increasingly a zero-sum fight for consumer time.

Games have advanced from basic graphics to realistic simulation; from comparatively short, arcade-centered titles to vast, continually growing worlds; and from small, local single- or two-player settings to global, hyperconnected real-time experiences linking millions. Playing an AAA game in 2021 is a dramatically different experience from playing one in the 1980s.

If that sounds self-evident, the recorded music industry seems not to have gotten the memo. To be sure, streaming services like Spotify have made it dramatically simpler to find something to hear (services that, I would point out, were not created by the industry itself), and a single smartphone can now hold more music than anyone once imagined in the cassette and CD era. But the experience of taking in an artist’s major release in 2021 is not fundamentally different from what it was 40 years ago. There is still a shortage of ways to support artists directly while listening to their music, and little truly engaging content surrounding major releases for consumers. The main tools for fan engagement and branding, such as music videos, have in fact declined as an art form over the last several decades.

Where music has changed in response to the attention economy, it has mostly done so with an inward rather than outward orientation: producers, labels, and artists have concentrated on making their song compete with other songs instead of thinking about how music competes with other entertainment forms. Meanwhile, streaming services understand perfectly well who their rivals are: Roblox, Fortnite, and other video games. The music industry as a whole has missed the bigger picture.

Music’s lost empire

Given the data and trends above, one could fairly conclude that gaming is larger than music simply because there is not that much money in music. Looking at the financial and cultural wealth created by music’s biggest stars, however, suggests a very different picture.

From a cultural standpoint, musicians are the most influential class of creators in any industry. Three of the four most-followed Twitter accounts and 23 of the top 50 Instagram accounts belong to musicians, while only six belong to athletes. When followings are combined across all major platforms, the pattern stays the same: an outsized share of the world’s most-followed people are musicians. Beyond follower counts, meme culture—just “culture” to anyone under 25—is led by musicians, whether that means Drake’s repeated viral hits, Cardi B’s “Okurr,” Lil Nas X’s unmatched grasp of internet engagement, or Megan Thee Stallion’s everywhere-used catchphrase, which lasted long enough to become a dominant cultural phrase across two summers, an eternity in our short-lived society. That is not to say gaming does not create memes and cultural influence—Fortnite dances, for example, have gone viral more times than one can count—but music’s reach is difficult to beat, at least for now.

Financially, music’s leading creators are among the richest celebrities in any field. Oddly, though, that wealth is rarely, if ever, generated mainly by their music itself. The world’s richest musicians form a list where the same pattern repeats again and again: a creator gains enormous cultural relevance through music, then monetizes it in a completely different industry. Think of Rihanna, now worth $1.7 billion, with 82 percent of her wealth coming from Fenty Beauty; Dr. Dre, whose stake in Beats earned him more than $350 million in Apple stock; Kanye West, whose wealth is chiefly driven by his Yeezy brand and other fashion ventures; or Diddy, whose Ciroc partnership helped secure his place on Forbes’ Highest Net Worth lists.

One of the main reasons most musicians—not just the top .01 percent—have to earn money beyond recorded music is that streaming economics make it extremely hard to make a living, let alone build wealth, from listening alone. That is why the music business must rethink, in a fundamental way, the possibilities of interactivity, community building, and immersion.

Open worlds vs. innovation through litigation

I believe the crucial reason gaming has risen to economic and attention dominance is the industry’s progressive, open-minded stance on copyright, user-generated content (UGC), and modding of its IP, while the music business takes a draconian and paranoid approach.

Few examples better capture gaming’s approach to IP protection than livestreaming and esports. Right now, more time is spent watching other people play video games on YouTube and Twitch than the total viewing hours of Netflix, ESPN, HBO, and Hulu combined.

Esports and livestreaming have become so popular that we often overlook the fact that the whole practice is, technically, an exhibition of copyrighted material to thousands or millions of viewers. Game developers do not merely let gamers stream walkthroughs and live sessions of their game for free, of course: they let gamers monetize those streams, producing millions in payouts for top players and large advertising returns for platforms such as YouTube and Twitch.

The broad practice of modding—in which gamers alter existing commercial games to better fit their play style or creative impulses—offers another revealing look at gaming’s copyright-management approach. Modding, which is an even more hands-on and directly monetizable form of copyright alteration and use, has fueled viral releases like Counter-Strike and greatly prolonged the life of dozens of major game titles. At one point, modding even made up the top three most-played games on Steam, the world’s largest digital distribution platform for PC games. Overwolf, a software platform that lets developers support UGC and modded content in their games, shows that the modding business is large and expanding. Although not every game publisher welcomes modding, the practice has undeniably affected the ability of individual gamers to take part in the gaming ecosystem at scale, further fueling overall industry growth. It is revealing that Warner Music Group, one of the “big 3” labels in the U.S., appears prominently among Overwolf’s investors—accepting a very different copyright standard for gaming than for its own industry.

Gaming has likewise led the way in community building, creator monetization, and growth through its embrace of UGC, which is becoming an increasingly central meta-trend across the industry. Three of the industry’s biggest success stories of the past decade—Roblox, Minecraft, and Fortnite—are either games deeply invested in user generated content, or are themselves platforms for user-led game creation. Most importantly, both Roblox and Minecraft have less advanced graphics than most modern games: they owe their success less to powerful GPUs than to the strength of networked technology when paired with IP, interactivity, and community building.

While the gaming industry has welcomed livestreaming with open arms, the music business has mounted numerous recent DMCA takedown campaigns across Twitch and YouTube gaming channels, leaving even long-established creators with no hope of appeal or recourse. Consider the confusing position many game streamers now face: they are free to use gaming industry IP however they choose (and can monetize that use), but they cannot use most copyrighted music, even at low volume in the background of a stream. Two very different copyright philosophies, indeed.

Stories of copyright trouble in music do not stop at livestreaming. Law professors who try to teach the fair use doctrine in lectures have faced takedowns; so have YouTubers who dared to speak Bon Jovi lyrics or educational guitar channels showing users how to play chords from famous songs. In some cases, the crackdown has threatened not only individual creators, but whole platforms: SoundCloud, famously, landed in a fragile spot with the industry in the mid-2010s, when the app’s abundance of UGC led to broad takedowns and account removals, including my own account over an un-monetized remix.

I am not advocating loose copyright enforcement that leaves creators and labels unpaid for their labor. Instead, I am urging the industry to build the technological foundation—the “copyright rails”—that would make boundless remixing, modding, and reinterpretation of any commercial work possible while still making sure the original rights holders are paid.

Any discussion of the music industry in 2021 would be incomplete without TikTok, now the single most important channel for breaking new artists and records. At first, TikTok’s success—and major labels’ readiness to license the platform and cooperate—might appear to clash with the claim that the industry must rethink copyrights. The first issue with that argument, though, is that TikTok is very different from modding or UGC game creation and enhancement: it only permits licensed music to be synced to short video clips, a much narrower model than the monetizable world of mods and user-generated content that flourishes in gaming. Second, although TikTok marks an incremental rather than a transformational change in the industry’s approach to copyrights and licensing, its success actually supports, rather than undermines, my main point: look at how much can be won when the industry adapts and experiments with new technology. TikTok now independently breaks number-one records, turns musicians into overnight stars, and even revives 42-year-old songs and sends them back to the top of the charts—the same song, in fact, that once got me kicked off SoundCloud for remixing. Progress is good.

The mainstream music industry’s view of copyright, rooted in a deep assumption that all streams are the same no matter the setting in which they happen (for example, a high-fidelity Spotify play versus a gaming stream where a song is merely background noise), is mistaken and overly simple. I suspect it is draining billions from the industry. Here are some ideas for how we can create a better future.

A more open future for music

The music industry’s copyright evolution can and should unfold through three sequential and closely linked mechanisms:

• A rethinking of our shared copyright philosophy The development of universal and scalable copyright tracking technology Subsequent technological innovation allowing anyone to remix, reinterpret, modify, or create

The last several decades have shown that the music business does not fully grasp how technology has changed the way cultural trends arise, or what that means for copyright. Think about how musicians emerged in the 1980s: an artist would usually build a local audience through gigs and radio, draw the attention of label A&Rs, sign a deal, and then be pushed into the mass market through top-down marketing, including label-run promo tours, radio interviews, and MTV. Today, the exact opposite is true: artists build viral, fan-driven followings on platforms like TikTok, then get signed and use their already existing fanbase to monetize more effectively with help from the label. In the 1980s, talent rose from within the industry itself, from executives to listeners; in the 2020s, it is bottom-up, with fans shaping boardroom decisions.

Although the industry has adjusted its artist-signing process to fit this trend, the same cannot be said for fan-led UGC and content. Rather than encouraging fan-led creation, the industry often takes a “sue instead of innovate” approach to independent creators and remixers. How many culture-shifting works haven’t been created because artists fear takedowns, account deletions, or lawsuits, or lack the tools to make them?

There is strong evidence that remix culture is essential to music’s appeal. In the past several years, two remixes of otherwise average-performing records—Seeb’s rework of Mike Posner’s “I Took A Pill In Ibiza” and Imanbek’s rehash of SAINt JHN’s “Roses”—have become certified global smashes, each reaching 1.4 billion Spotify streams, 22 times and 14 times the streams of their original versions, respectively. Likewise, the two most commercially significant records of the past several years, Lil Nas X’s “Old Town Road,” which still holds the record for the most weeks at number one on the Billboard chart (17) and Olivia Rodrigo’s “Driver’s License,” which propelled the singer to unmatched gen Z influencer power, were both surprise hits. “Old Town Road,” in fact, spread as a viral trend (via TikTok) so fast that radio DJs, who usually receive records from labels, were ripping the song’s MP3 from YouTube and sending it to one another simply to satisfy listener demand.

Although neither single began as a remix, my point is straightforward: nobody knows what will become a hit. Yes, some industry veterans may have a better ear than the average consumer, but hits are unpredictable and singular events, a pattern that has become even more true in our hyperconnected culture. If nobody knows where the next smash will come from, then using a top-down approach to copyright enforcement against UGC—where the industry assumes “We know better; this won’t work”—is short-sighted. We should be encouraging and empowering creators, modders, and remixers everywhere, not holding them back.

The next step in enabling a limitless culture of remixing, reinterpretation, and UGC at scale is to build the technological copyright infrastructure that will let it function and compensate rights holders at the same time. Fintech’s expansion over the last several years shows how much growth a legacy industry can see when universal rails are built that support the creation of complex user-facing applications on top of them. Just as Plaid’s APIs allow many wildly successful financial applications to integrate and work together smoothly, music needs a technology-driven copyright layer to make UGC work at scale.

Picture what becomes possible in a world where a universal copyright layer exists. Any song could be broken into its component parts—often called “stems” in music production—and marked with a unique signature that identifies the original rights holders, splits, monetization accounts, and contact details. From there, digitally signed stems could be brought into Digital Audio Workstations (the software applications such as Ableton Live that music producers create in) and be combined, remixed, sampled, and rearranged without limits, while remaining identifiable through digital signatures and inaudible watermarks. Once a creator is ready to release a work containing digitally signed stem(s), streaming platforms could automatically identify the underlying rights holders in the work and provide seamless, automated, and instant monetization at scale—a far cry from the industry’s current sampling and licensing processes, which are manual, burdensome, and restrictive. Emerging blockchain technologies may well become the technological backbone for flexible copyright management at scale: without industry buy-in, however, we will likely see gradual rather than dramatic progress.

Of course, any grand vision for our industry should not only affect skilled creators who know Ableton Live well: these copyright rails would also allow powerful consumer-facing applications to launch with built-in monetization for rights holders from day one.

Several intriguing startups give us a glimpse of what that future could resemble. Producers and creators now have access to millions of premium, on-demand samples, like those that now dominate pop music through Splice; the music collaboration platform also supports its creators financially, having paid them more than $30 million as of 2020. More recent startups are leading the way in breaking songs down into stems with multiple variants, which can then be recombined into new original works and cryptographically signed unique NFTs (Async.art); others are building the world’s largest library of pre-cleared music samples from commercially released works, greatly streamlining the long-standing practice of “crate digging” for music producers and DJs (Tracklib). Even tech giants are starting to innovate here: Apple, which acquired Shazam in 2018, recently introduced an Apple Music exclusive tool, powered by Shazam’s technology, that can identify individual songs and samples in DJ mixes, allowing mixes to be monetized and streamed legally on the platform—an industry first. Some startups are aiming even higher, developing forward-looking copyright infrastructure that is very close to what I describe here (like Pex, for example). Their challenge will likely be industry buy-in, as they try to overcome deeply rooted attitudes toward UGC and creation at scale.

But while these companies are inventive, they currently mainly serve experienced creators. The real “unlock” for the music business will arrive when universal copyright rails let ordinary users easily mod, remix, and play with their favorite songs in musically coherent ways through consumer-facing applications. The inability to do this is not a technological limit, but a lack of imagination, willingness, and underlying copyright infrastructure.

Startups such as Audible Reality, which provide flexible “audio filters” to alter the listening experience of music, offer an early look at what such a world might be. Imagine a future in which anyone, anywhere, can build a unique way to hear a song already loved by millions, then distribute and sell that audio filter at scale. Such a world sounds remarkably close to gaming’s current mod culture, and is one the music industry needs to move toward quickly.

Universal copyright rails would likely release the creativity of millions, along with billions of dollars in revenue for the industry and a thriving startup ecosystem. The music business needs to empower technology startups to do for audio what TikTok did for video, putting the power of limitless creation at scale at the fingertips of all. If and when music recognizes the power of unbundling the song by modularizing its constituent parts through copyright innovation, I think the industry will see engagement and growth that make the current streaming boom look like a side hustle.

This vision may seem far-fetched and perhaps absurd to some in music. I would ask them to stop and consider one thing: how do you think the idea of game livestreaming and esports sounded 20 years ago? Nobody can foresee the future. Gaming has shown us the need to throw open the doors to innovation and see what appears.

On building experiences and virtual worlds

Although copyright innovation is an essential move toward helping music command a greater share of attention in the future, that cannot be the endpoint. Reimagining what a music release is calls for an equally ambitious vision.

Music is famously a “fat head” business, where the biggest earners absorb the full long tail of attention and money, and that pattern appears to intensify every year as streaming expands and physical record sales flatten or fall. For context, more than 90 percent of streams are captured by the top 1 percent of artists: from my own experience at a streaming company and as an artist, I believe that this top 1 percent is itself similarly tiered, with the creators at the very top collecting the overwhelming majority of total streams.

This lopsided revenue split means the music industry, much like film, runs on hits: one blockbuster covers a hundred flops or smaller bets. Push that point further: if the industry is not fully monetizing releases from its marquee artists because of marketing myopia, the consequences cascade downward for smaller artists, whose very survival (at least inside the label system) quite literally hinges on superstar success. The more income labels can extract from top earners, the more risk they can (ideally) afford in signing new, emerging, or distinctive artists, which helps the long tail.

The consumer experience has also changed very little, aside from the ease of streaming. A recent ultra-top-tier album rollout is a useful example of how little is invested in giving listeners an immersive experience: when I opened the album on Spotify, the so-called “first of its kind” listening experience was just a few brief videos of the artist discussing the album, some custom UI styling, and not much more. The gaming industry is creating immersive virtual worlds, linking millions across the globe at once, and enabling anyone, anywhere, to be a creator. Are a few vertical clips of an artist on a soundstage really the best we can do for a AAA album release?

Even though the industry now seems unwilling to build persuasive extra-musical material for branding and revenue growth, that has not always been true. In the 1980s and ’90s, music leaned hard on a new technology—cable television—to dramatically widen its reach in popular culture and strengthen its finances through music videos. Michael Jackson’s “Thriller” video, the canonical work of the medium, is a prime illustration of how much growth and influence the industry can achieve when compelling IP is matched with bold spending on new technology and storytelling. The video, which became an unmistakable cultural event still known today, did more than establish Jackson as the world’s top entertainer: it revived its namesake album from falling sales, turning Thriller into the best-selling album of all time worldwide, with more than 70 million units sold.

In the years since, though, music videos have largely slipped to the margins of pop culture (with a few notable exceptions, such as Drake’s Hotline Bling), sharing the fate of many legacy media formats in our era of interactive hyperconnectivity. The music business needs to rethink what the “music video” of the next decade ought to be. I strongly doubt it is a few short videos on a streaming app.

Picture an interactive album release, powered by a custom-built mobile app, that lets fans enter an immersive, exclusive audio-visual world that changes and expands over time: behind-the-scenes clips from the album’s making, live virtual performances by the artist, interactive community tools to connect with other fans, and the option to engage with—and alter or remix—the album yourself as a fan, then share that work on social media to keep the attention flywheel spinning. While this kind of experience will probably first be limited to top-selling artists, I believe it is an area where a vibrant startup ecosystem will one day open these capabilities to artists of every size.

This type of experience already has some precedent: Travis Scott, Ariana Grande, and Lil Nas X all performed virtually during the Covid pandemic, with astounding results: notably, though, those experiences took place in the previously mentioned virtual worlds of Fortnite and Roblox, not in worlds created and run by the music industry. Scott’s Fortnite concert attracted more than 12 million live viewers, reinforced his image as a larger-than-life cultural figure, and generated enormous social buzz and brand equity. Compare that level of engagement with the 2021 MTV VMAs—a show that included dozens of artists, not just one—which drew only 1.49 million total viewers, an all-time low. The lesson is obvious: legacy fan experiences simply no longer measure up. Gaming has literally changed the game for every other media form, and the music business would be smart to follow suit.

From a business standpoint, creating interactive fan experiences would address one of music’s most persistent issues: the absence of a direct monetization path between artists and fans. Right now, artists and labels have to monetize their fan bases on terms set by other platforms—mostly streaming apps, though social media, retailers, and live events also matter—leaving them at the mercy of intermediaries, platform fees, and an inability to control the brand-to-consumer relationship (think email and credit card info) that is essential to long-term brand building and revenue creation.

To be clear, I do not believe such interactive experiences could or should replace streaming apps—it is not only unrealistic but would likely be illegal—but I do think the industry must radically broaden the reach of its focus, overcome the marketing myopia that is widespread in bringing artists to market, and capture the economic upside of such a vision. My hope is that this kind of industry shift would let labels and other copyright holders take more risks, sign a broader range of creators, and enlarge the pie for everyone.

Designing music’s future

The rapid ascent of gaming over the last four decades provides a model for how to win engagement in today’s attention economy, where time is limited and choices have never been more plentiful. Its nonstop drive toward community, interactivity, and creativity—made possible by technology being stretched to its edge—is the secret sauce of the media format now consuming all other kinds of entertainment.

As with any legacy media business, the music industry can learn a great deal from gaming’s rise from niche pastime to worldwide giant in order to expand its own share of voice and financial performance. Unlike other legacy formats, though, music has a built-in and potent edge: its creators are the arbiters of pop culture, pushing our shared reality forward through their creations, memes, and syntax. Bringing music’s cultural power together with a more forward-looking idea of what music can be in the 21st century would likely be a truly powerful force for the industry, artists, and fans everywhere. It is one I genuinely hope we get to see.