The entertainment industry is being restructured due to blockchain technology, which is moving power from middlemen and toward artists.
Blockchain technology has the potential to expand financial inclusion and change the lives of many people around the world, especially in emerging countries. While the promise of blockchain technology has been universally recognised, even by the toughest detractors of Bitcoin (BTC), the use cases for blockchain technology are frequently assumed to be limited to the financial industry.
So, how is blockchain impacting the music industry? One of the most notable advantages is the tendency to remove middlemen from the music sales and streaming processes. While streaming platforms have transformed the way music is experienced by making it more widely accessible to users, they have also unveiled a novel degree of intermediaries between musicians and fans.
In this case, the music industry, which has too often been ruled by gatekeepers, will be scrutinised. While the internet, backed by streaming platforms such as Napster, Soundcloud, and now Spotify, has changed this to some extent, blockchain technology appears to be the next step in restoring control to creators and their fans.
Blockchain technology, streaming and royalties
The music streaming industry has certainly come as a stark improvement, providing a cost-efficient and user-friendly alternative to piracy, allowing artists to receive royalties for their work. However, with this shift, the undeniable discrepancy in terms of the distribution of royalties has come to light. As is the case with many things, the distribution of royalties to artists resembles a Pareto chart where a very small percentage of artists account for the majority of music streams and thus royalty earnings.
This payment discrepancy is due to many factors, including an artist’s music genre and country of origin.
Empowering artists
While the disparity is unlikely to be fully addressed, boosting circumstances for emerging artists can make a big difference and led to a more developed market. It can also help transfer the power off from third-party middlemen like labels and networks, who have a massive impact over what music is heard by the general public. Blockchain-based music streaming companies are attempting to address this issue.
Simplifying the music industry
Several platforms, like Mediachain, Musiclife, eMusic, as well as others, address the same rights problem and use identical technologies to give independent artists a greater piece of the pie that they are effectively making. Nevertheless, distributed ledger technology has also become a simple and efficient way for new artists to deal with other aspects of the market that may be difficult for new musicians to cope with.
Ujo, a New York-based firm, offers a digital ledger of music copyright where artists may not only submit their works and gain 100% of their purchases and bonuses with no fees, but also seamlessly split payments with project collaborators. Another US initiative, the Open Music Initiative, uses blockchain method to monitor music rights holders and has already drawn Soundcloud, Sony, YouTube, Spotify, and Netflix as members, showing how effective the technology may be.
Imogen Heap, an English singer-songwriter, record producer, and audio engineer, recalls an incident in which a visual artist had all of his films deleted from Vimeo for using a 30-second clip of one of his compositions.
New revenue sources for artists
Blockchain is indeed altering the way artists, particularly lesser knowns, are paid and boosting the amounts they get to keep, while also easing the process of copyrighting and disseminating the work. Blockchain technology also enables musicians to access some other important source of revenue for independent musicians: engaged groups.
Freelance and new artists are frequently the beneficiaries of a strong sense of community, which converts into a constant flow of financial assistance from followers. It’s this “support local artists” concept that may understand why major labels own 32% of the share of the market in income for both physical and digital music transactions.
The abovementioned site Ujo enables people to sell virtual tokens that reward the creator and act as “collectible” items, giving it one of the most commonly used applications for nonfungible tokens. It also allows the consumer to directly pay their favourite artists. Other streaming platforms, such as Choon and eMusic, enable artists to fundraise projects, generating a new revenue stream while taking a constant financial burden in the recording and marketing of a song or a full-length album.
Rewarding fans
Blockchain-powered initiatives can also offer economic rewards to music listeners, increasing the entire experience more interactive and rewarding. While certain platforms, like eMusic, incentivize fans with exclusive content and reduced costs, other methods are also used. Platforms like Viberate already have over 450,000 artists, an impressive achievement, industry titans are also evolving with different blockchain-based incentive structures, most significantly Warner Music Group, one of the industry’s three major firms.
Blockchain’s Place in Music
So, would blockchain technology help artists regain ownership and revenue? It appears that progress is being made, but there is still much space for expansion, since artists are driven to comparatively greater incomes. The same can be true for listeners, who may now benefit from incentives via some of these decentralised networks.
While these increased incentives for both musicians and fans may assist to advance the usage of blockchain in the music business, the industry’s prior missteps may play a critical part in moving artists toward new and superior solutions.
