Blockchain Technology Could Transform The Digital Music Industry By Benjamin Roussey
When was the last time you bought a record? You don’t remember. No one does, because people hardly buy records anymore. Even with lower tax cuts and jobs everywhere, no reason to buy something you really don’t want nor will use.
Gone are the days when music lovers dropped into their neighborhood record store to browse and buy the latest album from their favorite artist. Musicians still give out signed copies of new CDs as a promotional gimmick, but listeners ultimately turn to streaming sites for maximum convenience.
Just not Practical
There’s a reason why physical forms of music have been dwindling. CDs are expensive, and apartment living has robbed us of the space to store a growing collection. They are inconvenient to carry, and also break and get damaged from prolonged use. With so much inconvenience, it’s no wonder that digital music has been the only form of music lately.
The ease and convenience of digital music has made CDs and records almost obsolete. From SoundCloud to Spotify to
Apple Music, there are more digital platforms for music today then we care to count.
While some streaming services offer a free trial period, almost all of them have a monthly fee for users. One would think that a part of the fee gets passed on to the artist, but in reality that’s not what happens.
Everyone Wants Their Cut
If things were simple, then the artist would receive a certain amount of money depending upon the number of times the track has been played. But there are other people too – music labels, producers, vocalists, musicians – and they all want a share of the revenue generated.
It becomes a complicated task to figure out exactly who to pay and how much. The metadata that comes with music tracks has the information about right holders but this data is often incorrect or missing. Without metadata, it becomes difficult to pay artists for their music, and this often makes smaller artists turn to other sources of revenue.
Blockchain Enters the Music World
Since this has been a huge problem ever since digital music gained popularity, work was in progress to find a solution for the revenue sharing issue. In 2018, it has been found the Blockchain is the answer to this problem. Because of its decentralized nature, Blockchain has been adopted by several industries, from IT to healthcare to education.
With the help of Blockchain, data can be easily stored and shared, and no one can erase the data. Once any data is entered into the global decentralized ledger, it remains.
One of the features of Blockchain, which could specifically prove to be useful for the music industry, is smart contracts. With Blockchain, there’s no need to pay middlemen, saving time and hassle. This is also why banks and other organizations are turning to this technology.
What are smart contracts? To put it simply, a contract needs to get prepared by a lawyer, and it takes a long time while you wait for the document.
A smart contract is a digital document. It’s like a vending machine, where you put in a bitcoin, and the contract is dropped into your account. This feature of Blockchain can make it easier to determine the percentage of the revenue that goes to the artist/band member, manager, label, etc. Blockchain is also a quick way to get in touch with all the right holders.
When all the information regarding right holders is logged into Blockchain, one decentralized is created, and it can be viewed by anyone at any time. Musicians and right holders can receive their revenue quickly instead of having to wait months or years.
The new streaming platform Musicoin aims to do just this with its own cryptocurrency $MUSIC. Musicians who publish their content on the platform receive are paid on a per play basis. The platform isn’t ad supported and there’s no fee to be a user. Rather, Musicoin encourages users to either tip the artists or buy tickets with the $MUSIC currency. Musicoin believes that the creator of the music should be rewarded for their work and the compensation should go up with their activity on the platform.
On this platform, smart contracts also help the artist and fans interact in a unique way. Artists on the platform can include in their smart contract a parameter that shares a percentage of the revenue with fans who share their music. Though many of them may not be impressed with the music played in the 2018 half time Super Bowl show via Justin Timberlake though this is another topic!
This is a poignant way of promotion and referral that can be done when the artist launched a new track or album. If the artist doesn’t want to continue with the revenue sharing, it can be easily stopped by modifying the smart contract. Users with the acquired tokens can spend them by buying merchandize or tickets. This creates a healthy ecosystem.
A Long Wait
Piracy is a big setback for artists, and though Blockchain cannot stop piracy, it can help musicians make money again. There has been no major change in the music industry in the last 30 years. Artists still receive their share of revenue no sooner than two years.
There is no proper rights management system. Another concern is unpaid royalties, which happen because of missing metadata or rights ownership information. It is also hard to get access to digital sales data in real time, without which it’s hard to plan marketing campaigns effectively.
Another issue faced by music artists is the lack of transparency in sales. Even though according to the Digital Service Providers (DSPs) there’s a large volume of transactions from digital streaming, the artists receive only a small percent of them.
So much so that several music artists choose to keep their music off streaming sites, depriving listeners who depend on these sites for their share of music. It is hoped that Blockchain could solve many of these problems.
Too bad no one solved the problems with the script for Thor III, Guardians of the Galaxy II, and Neighbors II but let’s get back on track!
Although it will take time, the big question is whether or not the music industry will agree to adopt blockchain technology.
The industry is still where it was 30 years ago, with no major change during this time. There is every possibility that music producers and middlemen may not want to let Blockchain take over the industry, for their own interests (remember the situation with iTunes and Steve Jobs?!). In that case, the industry will be no better and artists will continue to suffer.