Use of Blockchain Technology in the Music Industry
The creation and distribution of music have been continuously evolving from the recent past. New inventions have changed the way we deal with devices and people’s ways of life; it has become quite interesting. However, the fascinating aspect of the advancement in technology is the emergence of blockchain technology and its potential to revolutionize the music industry.
The music industry has been on the verge of collapsing ever since the introduction of the internet. After the invention of the internet, it became easy for third parties to access creative works of the artists and make an illegal fortune at their expense. Due to the centralization and mediation nature that guide production and distribution, the music industry has suffered immense challenges. Some of the devastating issues that have been pulling the music industry down include but not limited to;
- Unnecessary bureaucracy in royalty management
- Poor management of rights
- Delays in passing rewards to the artists
- Increased piracy of digital records among other issues
The main confusing point is that, despite the easier access to digital records, it's still hard for artists to get hold of the digital files that would aid them in marketing their creations.
Blockchain for music
It is still early to quote real transformation that blockchain technology can enhance in the music industry but at least we know its potential. The concept of blockchain that can change the music industry is the smart contract. This is a digital contract stored in the chain of blocks for security purposes. The application of smart contracts in this industry would allow artists to receive their monies and royalty payments without delays. Definitely, smart contracts could be used for more endeavors such as creating automated contractual agreements.
Apart from providing an easier and accessible avenue for artists to receive their royalties, another way that this technology could help this industry is through the organization of song rights, and easier accessibility of data required to promote their music. This move would definitely improve fans experience due to the easier accessibility of the producers, engineers and other aspects involved in the music creation.
The good thing is that most record label and producers have already embraced this technology. For instance, in an effort to improve the popularity of the distributed media content, Spotify announced its plan to hire Mediachain labs- a blockchain company that would help it to reward royalties to the online content owners. Mediachain company has created a non-regulated peer-peer distributed database for identifying and registering creative works uploaded online. This platform aims to make sure that owners can prove their ownership of the online content, therefore, make it easy to distribute royalties.
The platform was deemed essential after Spotify announced in April 2017 that it reached $ 30 million settlement of unpaid royalties. The company later guarantee that it would create a system that would integrate the music uploaded online with their owners. Therefore, this has become a critical period to introduce reforms in this industry that has been losing more than 80% of the music proceeds.
As one looks at the ecosystem of the music industry, you will understand the inherent problems associated with the payment of royalties. Currently, there is no common database to keep the records and the track of music. Therefore, the original creator of the music has been exposed to the risk of losing his/her ownership rights. Despite the sophistication of the technology we are using today, it is quite complicated to control this information.
Benji Rogers, the CEO of Dotblockchain music once said that “the money left on the table is dwarfing the amount being made under the table.” Generally, this statement means that the new system would create more chances for the artists to recover their royalties and maintain their ownership rights. However, the blockchain technology can turn things around and make the music industry lucrative once more.
How Artist Royalties Could Be Managed Using Blockchain Technology
The low transaction cost of digital currencies has led to the increment of denominations thus making the micropayments efficient. This aspect is ideal in handling the royalty payments given the fact that royalties are made in small sums. Don and Alex Tapscott, technologists, argue that blockchain would be suitable in enabling the mirometering of online content such as videos all the way down to some files exchanged for small denominations. However, it still uncertain whether the consumers would agree to pay for the monetarized subscriptions.
Smart contracts would allow the royalty payments to be implemented almost instantly. Instead of going through the intermediaries, revenues from downloads and live streams could be split automatically between the rights owners according to the agreement set. This would also improve the cash flow for the rights owners; smart contacts can minimize the risk of losing proceeds from this industry.
Besides, the issue of intermediaries acting as the main dealer between the artists and consumers would be eliminated. As a matter of fact, the presence of intermediaries has been a significant problem in controlling music royalties. This is because at times these intermediaries would act for their own interests at the expense of the artists. Artists would be able to receive music royalties immediately and directly as there are no third parties involved.
One key player element in the revolutionization of the music industry is Ujomusic that is based on Ethereum blockchain. This element of technology allows artists to manage their identities, rights and license based on their own terms. By combining the efficiency of the blockchain and the smart contracts, the system would enable the consumers to get the permit to use the music for different purposes.
PeerTracks is offering a new business model to artists that would help them to manage their fanbases and build an outstanding experience with their fans. PeerTracks is a live stream and downloading platform that enables the artists to receive more than 90% of the revenue collected.
The widespread embracing of the blockchain distributed ledger in the music industry is here to implement a new wave of change to improve the welfare of the artists. It is well compatible with the modern form of digital music and its distribution and consumption. The way the artists control their intellectual property would improve and ultimately increase their royalties. Some people might doubt about the potential of this new technology but its just a matter of time before we come to the reality of its ability. For exclusive details of the same topic, please visit, https://www.nasdaq.com/article/how-blockchain-technology-can-transform-royalty-payments-cm786646