How is Blockchain alone can Change the Music industry? Explained.

Introduction

You may have heard of blockchain technology as the foundation of cryptocurrency especially when it comes to bitcoin in particular. At its most basic form and function, blockchain technology can be understood as a highly federated means of establishing the identity and authenticity of things, both physical and digital. It is an incorruptible digital ledger that facilitates the process of recording transactions and tracking assets in a business network. Assets can be from cash, houses, cars, all the way to intellectual property, such as patents, copyrights, or even corporate branding. It can also facilitate secure online transactions, automate contracts, and add much-needed transparency to the music business.

Wait, you’re confused? Don’t worry, you are not alone.

Let’s try to get a better understanding of blockchain in more simplified terms. Blockchain technology allows digital information to be distributed, but not copied. That means each individual piece of data can only have one owner. A Blockchain is a chain of blocks which contain information. The data which is stored inside a block depends on the type of blockchain. Think of it like a digital ledger that is used to record transactions across many computers so that any record stored in it cannot be altered retroactively, without the alteration of all subsequent blocks.

Here’s an example of it

• 1st, a transaction is requested.
• 2nd, the block that represents the transaction is created.
• 3rd, the block is sent to every node in the network.
• 4th, the nodes validate the transaction.
• 5th, the nodes receive a reward for the proof of work, and the block is added to the existing blockchain.
• 6th, the transaction is complete.

How is Blockchain going to help the music industry?

Cutting out the middleman

We all know musicians make little money from album sales, they have trouble claiming or following up on royalties easily and efficiently, and on top of all that, they face RIAA file-sharing issues. So how can blockchain help musicians claim copyright or get the right reward on their work? One of the best things blockchain technology can do is its ability to remove middlemen from the process of music sales and streaming. While streaming platforms have changed the way music is consumed, making it more widely available to the listener, it has also created a whole new level of intermediation between artists and fans. There are many issues in the industry around the payment of royalties to artists.

Let’s say an artist uploads their song to a new digital streaming service that is built on blockchain technology. Each sale or stream pays out immediately to the band, performers, and producers with no middleman services impeding payment or taking a portion of the profits. All of this is based on what we will call a smart contract. A smart contract happens at the time the band publishes its work. A smart contract is a feature of blockchain that allows rules to be written into how something functions on the blockchain. So for this example, it would include who did what and who gets what, regarding the stream or sale of a song or record. This type of situation also serves to create the opportunity for more direct relationships between artists and consumers, especially because of blockchain’s elimination of the middlemen who take larger sums to broker transactions. This would allow artists to get paid directly by fans. Music creators can find it challenging to properly see the reward of their work in an an industry where many middlemen control revenues.

There’s a report that suggests for every $1,000 of music sold, the average musician gets a payout of $23.40, which is just over 2%. Another crazy stat shows that music producers hardly get anything out of their song being played on air. For example, on Apple Music, musicians earn $0.007 per stream. So if musicians wanted to reach the US monthly minimum wage, they would need over 188,000 total plays just on Apple Music alone.

Intellectual Property Protection

IP protection could be anything from inventions, patents, copyright, trademarks, literary and artistic works, music licensing, all the way to symbols, names and images used in commerce. Whatever type of intangible media someone creates, they should be guaranteed their IP rights as an author or creator. But the current system we have doesn’t really work properly in practice. We all already know how easy it is for our content to be stolen online, which means the way IP law currently is makes it not efficient. When a song is put on a blockchain, it’s given a unique number, and that alone can protect it from fraud. As blockchain further enables peer-to-peer transactions via a digital currency or a smart contract, artists and creators can get money directly from fans or businesses. And since no data can be changed in the blockchain, there is real transparency which lets content creators control their work. For example, illegal downloads of a song would be impossible on a blockchain.

New revenue sources for artists

Independent and upcoming artists with a strong fan community can often help translate into a constant stream of financial support from those fans. ANote Music, a Luxembourg-based startup, launched a blockchain-based platform that gives artists a new way of accessing capital by allowing users to invest in music royalties. The platform will also seek to allow listeners to capitalize on their musical insight by buying and trading music royalty shares on a secondary market. Marzio Schena, the co-founder and CEO of ANote Music, has said “Our goal is to unlock the hidden value in music for both investors and artists by creating a stock-exchange platform for music investments.”

Another blockchain-based platform is eMusic using their digital token called eMU. eMusic has a unique opportunity to build a sustainable music ecosystem to the benefit of artists, fans, and music services. **Tamir Koch, President of eMusic **said “Streaming skyrocket revenues and adoption, but the model has proven itself to be flawed. Hard-up artists receive a fraction of the royalties, while intermediaries take an ever-growing slice of the pie and leading services remain loss making. The eMU token is now here to reinvent music distribution. It creates a brand-new commercial model built on fair compensation and transparent flow of funds between fans, artists and music services”. According to eMusic it also makes it possible for them to offer a number of direct-to-fan features such as instant rewards, merchandise, and crowdfunding. This could be an interesting concept with listeners themselves enjoying incentives through some of these decentralized platforms. These new incentives for both artists and fans could definitely help propel the use of blockchain in the music industry going forward, but let’s still not forget the industry’s previous problems play a critical role in moving artists toward new, better, and improved systems.

To sum it all up blockchain technology has the ability to remove all intermediaries or middlemen in the music business and allows artists to connect to fans more directly. It lets artists become entrepreneurs and control their royalties. It allows the Issuing of smart contracts and allows peer-to-peer transactions, so artists receive payments from fans directly. And it allows complete transparency over credit rights and payment of royalties .

Will blockchain technology help shift control and revenue back into artists’ hands?

It seems like there’s progress already being done. But there are still tons of room for growth. I think it will be up to the artists as an entire community to embrace this change for us to see the full outcome and benefits of it. I hope you took something useful out of this.

The End!

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