Mapping innovation in the Music Industry: new business models at a crossroads

A new research from the Fair MusE project delves into how streaming services and emerging platforms are reshaping the industry, and what this means for fairness, diversity, and innovation. Now available on the project’s website, the slideset offers an overview of this research with a sharp analysis of shifting value networks, platform dynamics, and the future of music monetisation in Europe.

How are business models in the music industry evolving in response to platformisation, digital fragmentation, and the growing demand for fairness? A new research from the Fair MusE project, now available in the Resources section of our website, offers a rich and timely overview of the shifting business landscape in the music sector. Compiled by Dr. Adelaida Afilipoaie (imec-SMIT, Vrije Universiteit Brussel) in collaboration with Valdy Wiratama, Heritiana Ranaivoson, and Anders Henten, the slideset summarises findings from Deliverable 3.3 (D 3.3) “Innovative business models in the music sector”, with a particular focus on innovation, value creation, and the challenges of transparency in the digital age.

What emerges from the analysis is a music sector in flux where traditional roles are blurring, boundaries are shifting, and players are reconfiguring their strategies to remain relevant. More than thirty companies were examined, from major streaming platforms and aggregators to data intelligence firms and social networks. The landscape is increasingly defined by experimentation and convergence: streaming platforms are adopting new monetisation strategies, record labels are investing in direct-to-fan experiences, and social media giants are becoming unavoidable gatekeepers in the music economy.

At the heart of this transformation is the growing influence of platform ecosystems. Companies like Spotify, Apple, Amazon, and YouTube are not merely services. They are powerful intermediaries that control discoverability, monetisation, and audience engagement. Being part of a larger tech conglomerate often provides a competitive edge, whether through bundled services, algorithmic optimisation, or cross-platform promotion. The research underscores how this integration offers undeniable benefits to major platforms while raising concerns about market concentration and the potential marginalisation of smaller players.

D3.3 also delves into the paradox of innovation and inequality. Many independent labels and aggregators are making strides toward fairer artist contracts and transparent business practices. Yet, the overall picture remains one of uneven power dynamics. While services like SoundCloud have introduced artist-centric remuneration models, they remain the exception. Most platforms still operate within a framework where revenue distribution is opaque and heavily skewed in favour of major rights holders and platforms themselves. The remuneration challenges are even more pronounced on video and social platforms like TikTok and YouTube, where copyright enforcement mechanisms are often inconsistent and still based on right-holders’ notice-and-takedown requests rather than on preventive metadata exchanges.

Metadata, or the lack of it, emerges as one of the most urgent challenges in the digital music ecosystem. The complexity of rights ownership across sound recordings and compositions means that small metadata mismatches can result in substantial revenue losses. Despite ongoing efforts by collecting societies, aggregators, and data firms, metadata inconsistencies remain widespread. These challenges are compounded by the fact that many platforms do not share data openly, making it nearly impossible for artists, especially those without the backing of major labels, to trace the use of their work or verify earnings.

In addition to technical hurdles, the research points to deeper structural questions. As platforms increasingly rely on artificial intelligence and big data to guide discovery and engagement, new tensions are arising around algorithmic accountability, user autonomy, and fairness. The hybridisation of business models (combining subscriptions, advertising, merchandising, and partnerships) complicates the already murky terrain of value creation and distribution. Meanwhile, the rise of the so-called “superfan economy” highlights how fan engagement is becoming a core driver of innovation, even as it raises questions about the commodification of cultural participation.

To explore the main findings and insights, a publicly available slideset can be accessed here.