Home Crypto Education Cryptocurrencies How Can Blockchain Improve the Music Industry?

How Can Blockchain Improve the Music Industry?

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Music is a universal language that connects all of us, regardless of where we come from or what language we speak. Music makes us move and dance and lifts our moods and spirit. But how much do we know about what goes on behind the creative scenes? Unlike the music itself, the goings-on in the music industry are not as harmonious.

From delayed payments to a lack of transparency to artists earning way too little, the current way of doing things in the music industry is too fractured. The industry is rife with conflict between artists and managers and artists and distributing services. Claims of distributing content without permission or unclear revenue splitting methods are some of the persistent bones of contention. 

But this may change soon, thanks to the decentralized, immutable, and transparent blockchain. Blockchain is transforming the way the music industry handles contracts, how artists receive their deserved pay, and how royalties and copyrights are managed.

This piece explores this topic deeper by identifying the ways blockchain can improve relationships among various parties in music and how artists can catch a break from the currently skewed revenue-sharing model. We’ll also be looking at some exciting blockchain-based projects that are leading in this space.

Blockchain and Music: Use Cases

i) Decentralization

In the current musical setup, centralized entities, e.g., Apple Music, are the ones who provide music to the masses. This means they control what music is aired and that they (entities) are subject to the regulations (and whims) of the country they reside in, or indeed external governments with vested interests. This means they can delist musical content when instructed to do so. This can be illustrated by Apple Music removing the contributions of Chinese pro-democracy singers Li Zhi, Anthony Wong, and Dennis Ho – due to pressure from the Chinese government. 

Blockchain-based music distribution would be immune to this kind of censorship or unilateralism. With blockchain, no one can delete artists from musical platforms, and no one would be capable of taking any music down from the platform. Artists will be able to distribute what they like whenever they like, and to whomever they like. No government or states would have any say or influence whatsoever on what kind of content is played.

ii) Fairer Royalty Systems

The music industry constantly finds itself mired in financial squabbles over unpaid royalties. For instance, Spotify, the streaming giant, had to pay up to 30 million dollars in settlements after being sued by music publishing and songwriters over uncompensated work.

This fiasco testifies to the never-ending misunderstanding over who is owed what that plays out in the traditional music setup.

Blockchain would solve this problem by providing transparency and value for everyone involved. It can do this by tracking royalties then ensuring that they go to their rightful owners, as well as ensure various contributors are compensated for their input into a song. Smart contracts powered by blockchain can also streamline payments so that artists are paid for songs as soon as they are played or downloaded. This is in contrast to the current scenario where they have to wait for weeks, months, or even years to receive payment.

iii) Better Revenue-Sharing Model

Currently, musical artists are getting the short end of the stick. For instance, musicians got a meager 12% out of the total $43 billion in revenue for the music industry in 2017. And this was an improvement from the 7% cut that they got in 2000.

While recording companies and distributors bear much of the financial risk, the revenue distribution still seems unfair. Blockchain-enabled distribution platforms world cut out the many intermediaries involved in music distribution – ensuring only the contributing parties are on the payroll. This way, artists can go home with a fairer compensation for their work.

iv) New Monetization Models

With blockchain technology, artists can discover new ways of making money instead of relying on the traditional revenue model. The traditional model brings in money from touring, playing live, licensing fees, and so on.

Instead of depending solely on these revenue streams, artists can generate more revenue via blockchain-based models. For instance, they could come up with a cryptocurrency for a specific song or album. Through this cryptocurrency, they can create a virtual “stock market” through which listeners can purchase pieces of the rights of the song. Artists can then receive money from the money trickling down from the purchases. Blockchain-based smart contracts would ensure security, fairness, and transparency in this model.

v) A Global Music Registry

One of the challenges the music industry is grappling with currently is lack of a verified global registry of musical works. Attempts to build one have come to naught – resulting in the waste of millions of dollars.

A global music registry that identifies music rights holders would help streamline the royalties and rights management of music globally. Blockchain would help this by providing an open and transparent protocol where all musicians, composers, and other associated parties can have their rights managed more efficiently and fairly. 

vi) Change the Concept of Advances

An advance in the music industry refers to the pre-payment of royalties, whether by a label or a distributor to an artist. This arrangement has its share of problems. First, artists will have to recoup the advance at a later date, and the recording company bears the larger share of the overhead risk. 

Blockchain could change how advances are made – by distributing the risk among various stakeholders, facilitating a fairer distribution of royalties, and offloading much of the risk from the recording company.

Examples of Blockchain-Based Musical Projects 

MediaChain: This is a blockchain-based company that organizes open-source information with the use of unique identifiers for every single piece of information. Via the MediaChain platform, artists can also see to it that they paid fairly. By utilizing smart contracts, MediaChain allows artists to stipulate their royalties and rights without the need to integrate third-party intermediaries or contingencies.  The company has already been acquired by the streaming giant Spotify to assist in streamlining royalty and rights management in the music industry.

Ujo: This is a decentralized, blockchain-based platform on which artists can upload music, self-publish, and manage licensing and distribution. The Ethereum-based platform manages a database for music ownership rights and distributes royalties fairly and transparently via the use of smart contracts.

Choon: This is an Ethereum-based digital streaming platform that fairly and timely compensates artists for their work. On the Choon platform, artists can create smart contracts that ensure every contributor is fairly rewarded.  Rather than wait for weeks, months, or years to compensate artists, Choon rewards them almost immediately according to the number of streams the blockchain has recorded on any given day. Choon also features a crowdfunding function that allows burgeoning artists to gain a solid footing in the game. The platform also allows music fans to create personalized playlists and get paid for it.

VOISE: This is a blockchain-powered application that has its own token. The platform’s token enables artists to get paid for their music in a peer-to-peer marketplace. VOISE provides a collaborative platform through which artists can upload music according to fan preferences while getting almost 100% of revenue from the music. Artists using the VOISE platform can also determine how much listeners will pay for consuming their content. Artists can also offer free sample tracks to lucky listeners and receive feedback and support from the community.

Concluding Thoughts

Blockchain is making things better for music. Artists can get their fair pay without contention; risks can be shouldered by various parties so that record labels do not bear the brunt. Fans can participate in the music-making process, and artists can find support within the community. Everybody wins.

What we are yet to see, though, is the full-scale adoption of the technology in the industry. Perhaps this is because movers and shakers of the industry are yet to discover the revolutionary potential of blockchain, or because transitioning into a new way of doing things is easier than done. Either way, the music industry stands to benefit massively from blockchain, and the sooner it wakes up to this fact, the better.

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