The distributed register technology’s potential to fundamentally change the way ecosystems interact is one of the biggest breakthroughs for the musical industry. Blockchain can act as a surrogate for credit, and tie up the disrupt ecosystems with reliability and security, in the grand ecosystem of artists, managers, producers, record labels, distributors, promoters, and more all competing to gain revenue produced by one only creative product.
The music industry overall, due to the centralized and mediated nature of production and distribution, suffers mainly through these following issues:
Unfair revenue sharing
Feedback absence
Piracy
Improper rights and royalty management
Unfair revenue sharing.
Production and distribution houses acting as agents take a generous amount from the earnings of the actual musical product and very less gets passed on to artists themselves. In some scenarios, this reward has been as low as 10–20% for the artists and can take up to 2–3 years in actually reaching the artist’s bank account. This problem can be solved with autonomous smart contracts hosted on the blockchain which pays the artists in a matter of minutes.
Even major label artists are now seeking to use blockchain to gain back more of the control over the revenue generated. For example, Matt Sorum, former Guns N’ Roses and Velvet Revolver drummer, who announced the launch of Artbit, a live concert hosting platform and payment solution for musicians and performers based on Hashgraph blockchain. There is also the Monero cryptocurrency platform, created specifically for artists — and has many adopters, like Mariah Carey, Lana Del Rey, and The Lumineers. Icelandic songwriter Bjork has recently released an album in conjunction with Audiocoin, and gave customers a share of the emerging cryptocurrency in an attempt to kickstart interest in blockchain-based media; Grammy-winning DJ RAC launched his new album using the blockchain platform Ujo, built on Ethereum.
Feedback absence.
Even though it seems like the sales problems should now be easily avoided as the first step is taken, there is a new conflict appearing when adopting blockchain systems for the music sales. According to Billboard, 95% of revenue from the production and sale of music and related products comes from streaming. Here comes a new issue.
Firstly, even if artists stream their music on Spotify, Apple Music, or Google Play Music, they don’t get the actual digital insights to conclude any feedback on musical product or marketing strategy they adopted. All the analytics is mostly in hands of the platform, which uses the outcomes for its own inner recommendation process, sometimes excluding the least popular artists from the automatic playlists. Vicious circle, when small artist is mostly excluded from all the distribution.
Moreover, revenue stream for the streaming service doesn’t reflect what major artists make. It represents local artists, and artists whose music doesn’t fall neatly into radio-friendly categories (e.g., pop, hip hop, country, R&B, etc.). They are also part of the music industry. In fact, when discussing sheer numbers, there are many more artists falling into these categories than ‘superstars’. Obviously, those are artists who cannot be that sure in a contract that will be offered to them in the nearest future by a huge label. They need to own platform to get automotive recommendations to users, who are already tired from superstar playlists. The blockchain technology has a great potential to disrupt how those alternative and up-and-coming artists earn a living by providing a recommendation service inbuilt in the program.
Piracy and rights management.
The most complicated problem of rights and royalty management amongst various entities such as composers, producers, publishers, and singer can be done in an effective way.
If the artists are paid well and don’t need to worry about the monetary aspect, they will be more motivated to produce better content for their supporters. This aspect of blockchain has been recognized by quite a few artists around the world who have started launching their music on the blockchain. The popular recording artist Imogen Heap has launched a blockchain project Mycelia. Still in its infancy today, the project’s goal is to use the distributed register technology as a platform for hosting immutable metadata about songs, the artists who recorded them, and listeners — ultimately enabling peer to peer payments, restoring equity in songs to the artists, engineers, and producers who made them, and, most importantly, stating the rights. Early efforts were not by any means major financial successes, but they are a proof of concept.
To add to it, Pitbull, the famous American rapper, has recently understood the worth of blockchain for the music industry and has tweeted about his Smakathon-A blockchain music challenge for the developers to solve the problems of the music industry.
New challenges.
These new paradigms in the music industry make no mention of the platforms, studios, and record labels that have carved out their space as middlemen in the industry. That should scare any company who sees value in their business today from being a gatekeeper. Therefore, major music companies are forced into thinking innovatively as well. Warner Music is looking at the ways of using blockchain to manage global assets, while Spotify acquired Mediachain, a New York based blockchain startup that was working on music rights and royalties distribution already a year ago.
