Blockchains can get through traditional revenue models towards a more secure and effective model
Blockchain technology is used for a variety of industries throughout the past few years. Where users might not expect to see it is within the music industry.
However, it has rapidly altered how contracts are negotiated, how music is distributed among platforms, and how musicians are likely to get paid for their work in the future.
No matter what musical trends occur, blockchain will be an inherent part of it over the coming decades.
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Technology has always been integrated within the music industry, and the two have had a symbiotic relationship since electronic music made waves in the 80s and 90s.
It has not been until recently that it has dramatically affected how musicians distribute their works. Even with the ability to burn CDs, an original copy of an album had to be purchased before it could be shared with others.
Now with streaming, it is almost impossible to track how many copies of an album have been purchased, and it is difficult to determine which royalties are due to which artists.
“Currently, the global music industry has an estimated US$2.5 billion worth of uncollected royalties. Dubbed the ‘royalty black box,’ there have been more than 46 million instances of unidentified songwriters or unknown copyright owner notice of intents (NOIs) filed with the US Copyright Office by streaming services since April 2016,” writes Michaela “Mickey” Shiloh for Entrepreneur.
Because it is so difficult to track how many times a song has been listened to through a streaming platform, artists and their teams are left with inaccurate ideas of how popular their music is and how much monetary value can be attached.
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Much of this has to do with the accuracy of the data that is being shared and the fact that most of these streaming platforms are closed systems.
Platforms do not want to share data with other platforms, and in some cases, the technology so far is not advanced enough to exchange information even if streaming companies agreed to it.
Artists have had to adjust to this in several ways. Many have asked for higher advances knowing that there is no proper way to track whether or not their albums have sold.
Even if this means paying the record label back from copies that have not been purchased, it offers artists a chance to integrate better into the music industry. Record companies have also been willing to dish out massive advances knowing that artists might not be able to pay them back.
This is where blockchain can revolutionise how artists are represented and how first record deals are made in the first place. Instead of relying solely on one company, streaming services could be seen as companies instead.
Blockchain allows a greater understanding of what is being streamed, by whom, and when, which allows for more information that can be used to identify whether or not an artist is succeeding.
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It is predicted that this will change the purpose of record labels entirely making artists choose to work without representation because of the additional complications that come with advances and royalty agreements.
With blockchain, it is already possible to get a sense of how well an album or song is performing.
If artists can analyse data without the need for a middle man, they have the potential to gain direct sales instead of having to wait for advances to be paid off.
“Blockchain, by nature, enables transparency over who owns copyrights over a digital work of art or song and further promotes digital payment through cryptocurrencies and smart contracts. If the music industry adopted a blockchain-focused distribution model, artists might not need the help of labels to secure royalties or brand partnerships,” writes Angel DeForge for Blockstreet HQ.
It could be a few years before blockchain technology can be officially used to bypass traditional record companies.
Since the conception of online streaming, artists and those in the industry have been affected due to the uncontrollable distribution of their intellectual material.
However, blockchain might be able to put a stop to illegal sharing and ultimately disrupting the industry.
If artists can adopt a blockchain-focused distribution model, working with a label would no longer be necessary.
Overall, blockchain offers several advances that are likely to continue to transform the industry, from insights on popular music to understanding where music is being pirated.
Only time will tell how these changes will affect musicians and smaller record companies who are not able to afford the new tech immediately.
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Image Credit: Matthew Kalapuch
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