If you are an artist, a music producer or just a huge music fan like me, you are probably wondering how Blockchain, the technology behind the digital currency Bitcoin, will revolutionise the music industry. But just as industries across verticals are leveraging Blockchain technologies to cut out inefficiencies and increase profits, the music industry too has a lot to gain from the technology that has been dubbed as the new Web 3.0.
Why the music industry needs Blockchain?
While music lovers have hailed digitisation as the democracy of the music industry, the 15.7 billion global music industry has paradoxically remained the same. Music piracy through illegally downloaded, copied and shared content eats into the artist’s royalties and music labels revenue. Added to this, is the lack of a robust rights management system, which leads to loss of revenue to the artist. And the revenue, by the time it actually reaches the artist, can take up to two years! Another area of concern is unpaid royalties, which are often suspended in various stages due to missing information or rights ownership. There is also a lack of access to real-time digital sales data, which if available can be used to strategise marketing campaigns more effectively.
Artists are also plagued by a lack of sales transparency where although Digital Service Providers (DSPs) report a huge volume of streaming transactions, they end up receiving payment for only 20 to 40 percent of these transactions. This has led to several artists choosing to keep their music off such on-demand streaming services, causing notable gaps in the libraries of popular services like Spotify, Tidal, Apple Music, and Google Play Music.
These very areas are where Blockchain can make a difference. As a publically assessable and decentralised database that is distributed across the internet, Blockchain maintains permanent and undeletable records in cryptographic form. Transactions occur across a peer-to-peer network, and are computed, verified and recorded using an automated consensus method, eliminating the need for an intermediator or third party to manage or control information. The very architecture of Blockchain being immutable, distributed and peer-to-peer brings immense potential to deal with the present woes affecting the music industry.
Blockchain can initiate change in several areas
A primary area in which Blockchain can bring positive change is in the creation of a digital rights database. Digital rights expression is one of the main issues afflicting today’s music industry. Identifying copyright of a song and defining how royalties should be split between songwriters, performers, publishers and producers is difficult in digital space. Often artists lose out on royalties due to complicated copyright environment. Blockchain’s immutable distributed ledger system, which ensure that no single entity can claim ownership, provides the perfect solution. Secure files with all relevant information such as composition, lyrics, linear notes, cover art, licensing, etc., can be encoded onto the Blockchain creating a permanent and inerasable record.
Blockchain technology can also be leveraged facilitate automatic payment of royalties through ‘smart contracts’. British singer Imogen Heap’s latest song “Tiny Human” released on a Blockchain powered site called Ujo Music allows users to purchase the song, as well as the key, tempo and stem of the track using the cryptocurrency Ether. And the ‘smart contract’ encoded in the Blockchain enables the proceeds to directly reach the artists as well as the producers, writers and engineers. Such a system, removes the need for intermediaries and provides a transparent ecosystem that ensures all stakeholders receive their fair share of royalties.
Digitisation of the music and media industry has also left artists and producers to deal with the rampant problem of piracy, with users finding innovative ways to copy, record and distribute content, without compensating the copyright holders. The immutable security that Blockchain technology provides can be utilised to find solutions to prevent unauthorised distribution. One way is to encode tracks on the Blockchain, which ensures that a unique record is created every time a song is played preventing ‘ripping’ of the content.
The time for disruption is now
I agree with Nick Mason of Pink Floyd, when he says, “If Blockchain technology is going to be the future, we need to dig in and make it happen.” The music industry, disrupted by digitisation, is currently in a struggle due to age-old structures that are unable to cope with the present day digital demands. With this conjuncture, Blockchain technology offers solutions to build a healthy and robust ecosystem that can benefit both artists and producers. While there is still a lot to be explored on how Blockchain can revolutionise the music and media industry, it is clear that Blockchain technology is something that the industry is in dire need of.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)