Since the 1999launch of Napstersmusic-sharing platform, the music industry has been in near-constant turmoil, its timeline marked withdipping revenues,lack of transparency, piracy problems and feuds over the fair distribution of dividends.
Music companies hate streaming services. Streaming services hate file-sharing services. And, most of all,artists and content creators hate virtually everyone elsefor making huge sums off their toil and feeding them the crumbs.
With so many conflicts of interest, there seems to be no one service or business model that can work in a fashion that satisfies the needs of all the parties involved. But now, after years of suffering from a thorny and complicated relationship with the tech sector, the music industry might finally find a chance to head in a positive direction by leveraging theblockchain, the technology that powers the bitcoincryptocurrency.
The blockchain has drawn the attention of investors and professionals in different industries, and is now showing promising signs to change the music industry in ways that might fulfill the needs of everyone.
Well, almost everyone.
Why can blockchain be a good technology for music distribution?
At its core, the blockchain is a distributed ledger that can validate and register transactions without the need for a central authority. No one owns the ledger its spread across the nodes that constitute its network and is publicly available to everyone.
Information stored on the ledger is interrelated through cryptographic hashes, which make it virtually irreversible and tamper proof. In a nutshell, it means that parties can make peer-to-peer exchanges of data, money or anything else of value in any amount and in a secure manner.
One of the advantages of a blockchain ledger is that it can establish a more direct relationship between creators and consumers.
In the music industry, the blockchain could transform publishing, monetization and the relationship of artists with their communities of fans.
First, music can be published on the ledger with a unique ID and time stamp in a way that is effectively unalterable. This can solve the historic problem of digital content being downloaded, copied and modified at the leisure of users. Each record can store metadata containing ownership and rights information in a transparent and immutable way for everyone to see and verify. This will ensure that the correct people will get paid for the use of the content.
Blockchain technology can also revolutionize the monetization of music. The infrastructure isbased on smart contracts, programs that can be run on the blockchain along with the payment transactions. Blockchain-based cryptocurrencies such as Bitcoin and Ethereum support micropayments, which is effectively impossible with classic payment mediums due to transfer costs. This can support a new way of offering on-demand music services. Users can select the record of their choice and immediately reward the stakeholders with cryptocurrency upon playing it.
And, finally, one of the advantages of a blockchain ledger is that it can establish a more direct relationship between creators and consumers. Composers and artists will no longer be required to go through purchasing platforms and financial brokers who usually take a hefty cut of the revenue and can get directly compensated every time their songs are played. This can be a boon to all those amateur producers who dont have the backing of huge record labels.
Startups and musicians embrace blockchain technology
Companies likeBenji Rogers online music platformPledgeMusichave publisheda comprehensive blueprintfor the Fair Trade Music Database, a globally decentralized blockchain-based ledger that can solve the problems of ownership, payments and transparency.
Creators can upload their music and the associated metadata on the ledger. Companies and consumers can search and play the music of their choice off the ledger, and smart contracts will ensure that the owner(s) of the content will be paid automatically for its usage. The database would store .bc or dotblockchain records, which Rogers describes as a codec that cannot be separated from its rights.
PeerTracksis another music startup that is getting ready to launch its platform and is betting big on blockchain. PeerTracks is a sort of artist equity trading system that makes it dramatically easier to manage royalties and revenue, making it especially convenient for artists who cant afford to pay someone else to do it. The system leverages the MUSE blockchain, a ledger engineered for the music industry.
As with any solution, blockchain will not be a perfect answer to all the problems that the music industry is facing.
The company claims PeerTracks will enable artists to instantly claim 90 percent of their sales income, rather thanthe approximate 15 percent they currently get.
PeerTracks also introduces the concept of artist tokens, a limited and tradable cryptocurrency that artists hand out to their fans and which finds its value from the popularity of its creator. Higher demands for coins created by a specific artist will increase its worth.According to PeerTracks CEO Cedric Cobban, the token system translates to crowdfunding, fan engagement, talent discovery and community building on scales weve never seen before.
BitTunes, yet another blockchain startup, wishes to deal with another problem, digital music piracy, with a carrot-rather-than-stick approach, as Simon Edhouse, the companys managing directorputs it. The company offers a bitcoin-based peer-to-peer file-sharing platform that enables ordinary people to become a distribution channel for their own digital music and earn money.
Last year, award-winning musician and songwriter Imogen Heap started work on a new music ecosystem, which she callsMycelia. Based on blockchain technology, the platform will enable direct payments for artists and give them more control over how their songs and associated data circulate among fans and other musicians. Shedescribes the effortas trying to take away the power from top down and give power, or at least a steering, to the artist to help shape their own future.
Is blockchain the music industrys silver bullet?
As with any solution, blockchain will not be a perfect answer to all the problems that the music industry is facing. But at the very least, it will level the playing field to some degree. And artists, songwriters, performers and musicians the real owners of the industry will be the main benefactors, for they will finally be able to own their creations and get their due for their efforts.
However, it will likely not be welcomed bythose who profit from a lack of transparencyin the music industry, or big tech companies that prefer to monopolize rather than share. And clashes are likely to ensue if the idea actually gains traction and real momentum.
But as Rogers explains in afollow-upto his original article, the money being left on the table is dwarfing the money being made under the table, which means that overall, a transparent system would generate much more revenue and create more opportunities than it would actually destroy.