How Can Blockchain Technology Solve the Music Industry Problems?
There’s no denying that the music industry is no longer what it was 20 years ago. Nowadays, social media arguably plays just as an important role in the “business” as music streaming services. So, between the personal struggles of artists, piracy and copyright infringements, and dismal payouts, the music industry still has a lot of the problems it did two or three decades ago.
Of course, one of the biggest problems of the music industry is related to how little revenue artists usually end up earning. To keep things as simple and as clean (at least when from an ethical point of view), there are a lot of middlemen involved in the music industry nowadays. While this is not necessarily a bad thing, it ends up hurting the artists the most, which is not something that is desired.
To offer a big more depth on the matter, consider the sheer number of music streaming platforms we have today. Platforms such as Google Play Music, Deezer, Spotify, Amazon Music, and Apple Music all play a big role in how music is being distributed nowadays. Behind all the shiny UIs, according to some experts, there’s actually an industry that’s really problematic.
Biggest problems of today’s music industry
For instance, despite the presence of these music streaming services, music theft and copyright infringement are still big problems of today’s music industry. During the past couple of years, numerous stream-ripping websites have appeared. These are very different from illegal download sites and unlicensed streaming sites, and they’re currently the fastest spreading services of this sort.
Another problem is the secrecy around music “sales” or music “usage” in regards to streaming services. The data behind these aspects is not only kept far away from the artist’s grasp, but it’s also unreadable or totally unclear at times. In short, dismal accountability is a real problem in today’s music industry.
Monopoly is one of the oldest problems within the industry, with various large record labels holding their own in the face of most of their competition. Most contracts are secret, making it even harder for music streaming (or video streaming) services to identify which actually owns what in terms of royalties for the streamed music.
Another problematic aspect is how many music streaming services handle the metadata of various tracks, songs, and music, in general. And, to make matters worse, since there’s no defined standard for data reporting of music streaming services, the result is a lot of inefficiencies which means the artist is not getting paid for the music.
Last but not least, there’s the problem of middlemen. All record labels have a lot of adjacent services which, in turn, have a lot of other expenses. Just consider the fact that all the involved holders claim their fair share of the revenue which gets split into so many pieces, that it becomes very difficult to determine what actually arrives at the artists’ end.
What’s the solution?
To recap, transparency and intermediaries are two of the most important issues that the music industry (or the music streaming service industry) currently has. That is why, there are many those who believe that blockchain might actually be able to solve these pressing issues in a democratic, fair, and efficient manner. By eliminating the middlemen (since blockchains are decentralized and can’t be controlled by third parties) as well as by offering a much needed transparency, the correct implementation of blockchain in the industry’s services might mean more money in the artists’ pockets, which is exactly what’s desired, especially we don’t think on a global scale where all the known artists dominate the scenes.
To further expand the subject of transparency, with the help of blockchain, artists could potentially get access to real-time royalty information (since everything is public). Anyone who’s ever heard of Ethereum might even argue that smart contracts can also play a very big role here, especially when it comes to detailing the digital distribution terms. The result will be that artists fully understand their contract details and monitor their payments in their contract terms.
It’s almost common knowledge by now that blockchains are particularly good at processing payments. With blockchains, payments are more or less instant, which is exactly what’s needed here. Regarding the usage of smart contracts, it’s very easy to organize and encode metadata with the help of smart contracts. What’s best about the smart contracts is that no unauthorized entity can change them, meaning that loyalty rights will be unchanged.
The blockchain might also prove extremely beneficial for providing the copyright owner of a certain song with full control over his or her creation. We’ve stated that the ledger behind the blockchain is public. This means that the blockchain can also potentially act as a sort of medium of communication between fans and the artist.
Relevant examples of blockchain-based projects
Without a doubt, it will take some time until blockchain really finds its way into the heart of the industry. Be that as it may, things are looking very good at the moment, mainly thanks to various projects that act as pioneers in this respective field. These are Choon, Resonate, and Voise, all of whom are blockchain-based platforms.
Choon is one of the best interpretations of how blockchain can solve most of the music industry’s problems. For starters, it eliminates the need for intermediaries, thus providing the artists with more revenue. On the other hand, it uses smart contracts to automatically distribute payments (based on digital agreements).
A very important part of the Choon ecosystem is its token, the NOTES token. The platform uses this token to distribute payments, but it can also be used by artists to promote tracks and to benefit from a lot of additional advantages.
Resonate describes itself as a “blockchain-based streaming music company owned by artists, fans, labels, managers, agents, and anyone else… all as equals.” The main selling point of Resonate is the fact that it promises to pay up to 2,5 times more than most of its competitors.
The platform charges users an annual membership fee of $5, which also provides them with voting rights on key issues. It uses a “stream-to-own” model, and it requires users to pay 0,002 credits for the first stream of a track. To conclude, Resonate aims to solve another pressing concert of the music industry, that of monopoly.
Voise is a similar platform that makes things even more personal for artists, as it allows them to set a price out of which they receive 100% of the revenues users stream their music. It also uses smart contracts to secure encode contract terms, and it has its own token, the VOISE token. While the streaming platform totally excludes fees and intermediaries, it also prevents all types of music theft, including stream-ripping.
Taking all things into account, it’s quite clear that blockchain has the potential of revolutionizing the music industry and potentially cleanse it of most of its pressing matters. However, there’s still a long way to go until blockchain enters the mainstream. Blockchain technology has the potential to remove intermediaries, to ensure a transparent method of revenue distribution, and, in the end, they could actually help artists of all levels make a living exclusively from music.