Blockchain is redefining the music industry by ensuring fair remuneration to artists, protecting intellectual property and making revenue sharing transparent.
Regardless of how you experience it — as a consumer or creator — the music industry is undergoing constant change. As a consumer, you might have noticed how modern music stands in stark difference from that of even half a century ago. The musical styles have changed, new genres have emerged, some old ones have (nearly) died out, and the media for discovering and consuming music have completely undergone a complete revamp. For creators, the way they create music has undergone a massive transformation — the digital revolution has spawned new instruments, processing equipment, and channels for reaching out to fans. Technology has lowered the barrier to entry for those wishing to explore a career in music, giving rise to a wider global pool of talent of not just musicians but also associated professionals like sound engineers, composers, lyricists, etc. Despite all these changes, a few core aspects of the music business, mainly involving the commercial side of the industry, are still awaiting change. The introduction of blockchain in the music industry can solve some of these longstanding problems and become a mainstay in the global music industry.
HOW BLOCKCHAIN IS HELPING THE MUSIC INDUSTRY
While the applications of blockchain in finance, healthcare, and legal industries are numerous and already in the proof-of-concept stage, the technology is also poised to spread out to many other fields, including art and music. And since the technology is virtually an established part of the future of banking and finance as well as the legal industry, blockchain can extend its functionality to the commercial aspects of the music industry such as restructuring the process of paying artists and creators while also protecting intellectual property.
1. Ensuring Fair Remuneration to Creators
Being a part of the modern music industry is as much a commercial endeavor as it is an artistic one. Professional musicians depend on their work and the remuneration they receive for their work to make a living. There are multiple ways for musicians to get paid for their art — disc and digital sales, streaming platforms, and live shows are just a few of them. However, the problem with these models of distribution is that they, more often than not, tend to disproportionately compensate the actual contributors to musical compositions, favoring the middlemen such as distributors and retailers instead of the artists themselves. Although these middlemen have traditionally been necessary to bring together musicians and other professionals in the industry, promote music beyond borders, and generally get artists noticed, they have run their course of relevance. Since the advent of the internet, it is becoming increasingly easier for art to be promoted and receive attention. Thus, the need for middlemen, although still considerably strong, is diminishing. Additionally, middlemen like these take away a major chunk of the revenue earned by selling the content created by artists. This leaves the primary contributors to compositions with a tiny fraction of the total earnings. It is reported that musicians only earn 12% of the total sales made by the music industry, which now rakes in $43 billion a year. Now, unless the artist in question happens to be a globally established name who can attract millions of listeners for every track, they may find it hard to make ends meet if they are paid such a small portion. Thus, many artists fail to make it from the “struggling” phase to “stardom”, where only a select few manage to reach.
Fairly remunerating artists would require the elimination of a majority of the intermediaries that are currently involved in the distribution of music. And when we talk about eliminating the middlemen in any transaction, the natural solution — ever since its emergence on the tech scene — turns out to be blockchain (in theory, at least). Blockchain can form the transactional channel between music creators and fans who wish to support them, eliminating — or at least minimizing — the need for intermediaries. Multiple blockchain-based platforms are emerging, promising musicians and supporters a direct link with each other, allowing fans directly pay the artists for their music, usually in the form of cryptocurrency. These platforms can offer a majority of the revenue collected to the artists, while still managing to earn profits due to the absence of middle agents for the distribution of music.
2. Protecting Intellectual Property
Blockchain can also be used to secure intellectual property rights of musicians for the work they’ve created. Blockchain can be used to create a unified global database of musical compositions where every track that is created can be registered and verified by the network to be original, using AI algorithms. This data will be immutable and publicly available, ensuring that there is no doubt regarding precedence and originality. This will eliminate any hassle for original content creators when it comes to claiming legal rights over their content.
3. Making Revenue-Sharing Transparent
Making music is often a collaborative effort and requires the sharing of remuneration by all parties involved. Using smart contracts to store agreed terms and executing the division of revenue among the contributors can make the commercialization of music more transparent than it is now. Sales of tracks through all mediums, digital and physical, can be recorded on a blockchain that ensures that all contributors can be fairly rewarded based on sales.
CHALLENGES TO ADOPTING BLOCKCHAIN IN THE MUSIC INDUSTRY
The inherent problems and challenges to blockchain adoption that have held back the technology from other non-cryptocurrency applications are what inhibit its implementation in the music industry as well. Thousands of songs are created and released every day, making the technical requirements to store the database of every song released almost impractical to satisfy. This is because, blockchain, as it is now, is very resource intensive to operate. Using blockchain to track the global distribution of music will be infeasible for the platform owners, as the expenses will heavily outweigh the revenue. Adding to that the fact that there is no established authority to regulate blockchain operations in any industry, let alone music, shows us that all the benefits of blockchain in the music industry are still years away.
Fairly immature, blockchain technology is only beginning to transition from theoretical propositions into real-world applications. Multiple reiterations of real-world projects will be required to identify and overcome all the limitations of blockchain and prepare it for mainstream adoption. However, as it stands, there are still justifiable reasons for skepticism of blockchain. While caution is necessary, considering the potential benefits of blockchain in the music industry and everywhere else, we can safely say that blockchain can prove to be the hero in the music and art industry.