Federico Scialabba speaks on the evolution of the music industry. Credit to 11:11 PR.
Los Angeles, California (May 14, 2025)- Federico Scialabba, founder of Music Brokers, has spent a lifetime immersed in the constant reinvention of the music industry. From his early days at MCA—before it became Universal Music—to building one of Latin America’s most recognized independent labels, his perspective is rooted not in nostalgia but in evolution. He’s not clinging to the past; he’s dissecting the present and scanning the horizon.
In a candid conversation, Scialabba reflects on the seismic shifts that have upended the business model of music. Gone are the days of unit sales, CDs, and physical inventory. In their place is a digital landscape defined by fragmentation, microscopic margins, and algorithm-driven consumption. “Eighty percent of the 125,000 songs uploaded to Deezer every day don’t get a single listen,” he points out. It’s not just competitive—it’s oversaturated. And for most, it’s unrewarding. The revenue per unit consumed has dropped by 99.96%. A stream today earns a fraction of what a CD once did.
At Music Brokers, the transformation was stark and swift. “We went from 180 employees worldwide to fewer than 20,” he recalls. Entire departments in sales, distribution, and inventory became obsolete with digitalization. While painful, the shift also cut operational costs and forced a leaner, more agile structure. But technology alone wasn’t the answer. A mental reset was just as crucial. “The hardest part was realizing that digital visibility is not the same as profitability,” Scialabba says. A viral hit can rack up a billion views and still generate less than $3,000 for the artist.
Streaming platforms have created a paradox: greater global reach, but tighter control and lower payoffs. Labels no longer dictate pricing—platforms like Spotify do. “I don’t decide how much Spotify costs in Argentina or Nigeria. Spotify does. And they control 80% of the market.” Scialabba adds that platform concentration and geopolitical events—such as the abrupt loss of 42 million users in Russia—highlight just how fragile and centralized the current model has become.
Still, he doesn’t see the future through a lens of doom. Quite the opposite. Scialabba believes that the next chapter of the music business will be written through innovation—particularly with artificial intelligence and blockchain. “AI isn’t perfect, but it’s here to stay. In the future, algorithms will identify musical influences and unlock smarter monetization paths,” he says. Blockchain, for him, is even more transformative. It offers traceability, ownership transparency, and an entirely new funding model. Fans can already buy fractions of songs and receive royalties—an early sign that music is becoming a financial asset class. With encrypted metadata storing every detail of authorship and revenue split, artists may finally gain control over what has long been hidden behind opaque systems.
He even imagines decentralized digital stores focused on niche genres, outside the control of streaming giants. The potential is vast—if the industry dares to pivot. Scialabba’s own evolution has been shaped by mentors like Mikel Barsa and Charlie Sánchez, who challenged his thinking and forced him to let go of outdated models. He’s also keenly aware that future-proofing a company means opening doors to younger generations. “We’re constantly bringing young people into the team. It’s essential. They see things we no longer see.”
Scialabba’s journey is not just a survival story—it’s a blueprint for resilience. His message is clear: resisting change is futile. Success lies in recognizing the new rhythm of the industry, adapting quickly, and anticipating what comes next. In this Music Industry 3.0, where the only certainty is transformation, Federico Scialabba stands as a seasoned guide, navigating the chaos with clarity and vision.
Who is Federico Scialabba? An Argentine entrepreneur and pioneer in the Latin American music scene, Scialabba began as a DJ and radio host before moving into the industry’s corporate side at MCA. In 1997, he co-founded Music Brokers alongside Julián Cohen, growing it into a major force across Latin America. Known for its signature compilations like Bossa n’, Jazz and ’80s, and Pericos & Friends, Music Brokers has since expanded into digital content with platforms like MB Playlists, Selecta TV (classical music on demand), Cooltura (eBooks), and Music Brokers Publishing. Today, Scialabba continues to push the boundaries where music, technology, and business meet.
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