Blockchain in the music industry
- 2. July 2019
- Posted by: Blockruption Team
- Category: Applications
To fully understand how blockchain can revolutionize the music industry, it is important to understand the basics of how the technology works.
Blockchain utilizes a decentralized network of hundreds or thousands of computers to independently verify the transactions that occur within the platform. Multiple users confirm every transaction, and as they are validated each record is timestamped and encrypted. These records form individual blocks that are then tied together sequentially to create the blockchain.
Once the information is entered into the blockchain, it is permanent and exists within a continuously reconciled database. This prevents the data from being manipulated or altered, so anyone who receives information from the blockchain can be sure that it is accurate and safe without trusting the source explicitly.
Application of blockchain in the music industry
The security and transparency that blockchain provides makes it ideal for helping the music industry overcome obstacles with royalties, labels, and streaming.
Since the blockchain can trace a transaction to its initiation, there would be no question as to where original content came from. This would allow the appropriate person to be credited for song downloads and streams, something that is a huge issue in today’s digital world.
In fact, a report released by Billboard stated that there is close to $2.5 billion of uncollected royalties in the global music industry. Another study conducted by RIAA estimated that piracy in the music business costs the US economy over 71,000 jobs and $12.5 billion in total output – staggering numbers, to say the least.
If songs and copyrighted content were to be put through a blockchain, it could be specifically tagged and identified. This would prevent fraud and would ensure that royalties were paid accurately and efficiently. The data in the blockchain cannot be changed either, so it would be impossible to illegally download or stream music because that “transaction” would not be validated by the decentralized network.
Another major benefit that blockchain could bring to musicians is the ability to remove middlemen and their associated costs. If music was disseminated through a blockchain, artists could handle the revenue from royalties and album sales directly.
This would mean that they would not have to rely on an expensive record label to produce music and would be able to retain a greater percentage of their sales. Smart contracts within the blockchain could also facilitate payments from fans and streamers to artists directly, removing yet another barrier for up and coming artists.
While transitioning to blockchain seems like a great way for musicians and artists to take control of their content and sales, there are still many hurdles for the technology to take off.
One of the biggest barriers to adoption is the fact that most artists are not ready to remove themselves from record labels, as they handle things like promotions, royalty collections, and contract writing. Some artists may not have the time or bandwidth to handle these tasks or may lack the expertise needed to execute them accurately and efficiently.
Similarly, music and streaming contracts are extremely complex and may exceed the current smart contract capabilities found in some blockchain platforms. It also doesn’t address the need to use the radio and record labels for exposure and to reach fans.
Examples of blockchain in the music industry
While blockchain has still not completely taken off in the music industry, there are several examples of it being implemented to date. Viberate is currently the largest crowdsourced platform for listing and mapping the music industry, with over 460,000 musicians, 100,000 venues, and countless booking agencies in their platform. This blockchain-powered tool allows artists to manage venues and book live performances directly and efficiently.
Uio is an open platform that created a decentralized database of copyrights and their owners to automate royalty payments. They utilized blockchain and smart contracts to develop an efficient way for artists to collect royalties in one simple platform. Other examples of royalty trackers include Token.fm and PeerTracks.
Some well-known artists have even launched music on blockchain to promote its benefits, including Imogen Heap, RAC, and Giraffage. Pitbull has also been very vocal about the way blockchain could help developers solve many issues facing the music industry.
Taking your business to the next level
Blockchain technology could hold the future to the music industry and help businesses and artists alike navigate complex topics like royalties, online streaming, and copyright issues. It can also eliminate piracy and make producing music more accessible to artists who have not yet been signed by a record label.In order to ensure that your business can capitalize on these benefits, it is best to work with a consultant to analyze your current processes and see what can be done to improve your firm’s efficiency and bottom line.