Blockchain to induce disruption in music trade
Blockchain technology is inciting disruption within the music trade, moving the power from middlemen back to the artists.
Blockchain tech has the capacity in extending monetary inclusion and alter the lives of people dwelling across the planet, specifically in growing economies where its required the most. While the potential and prospects of blockchain technology have been broadly touted, even amongst the strictest critics of bitcoin (BTC) itself, the prospective usage scenarios for blockchain technology are typically perceived of as limited only to the monetary trade.
While the DLT (Distributed Ledger Technology) developed on the back of Bitcoin consists of a potent use case within the domain of currency and assets, in which price will presently be electronically transferred with no middlemen or risk of duplication as an outcome of possession is immutable and demonstrable, these same applications will be translated into various different industries.
In this scenario, the music trade, which has usually been controlled by the gatekeepers, the record companies – are being forced to go under the microscope. The proliferation of streaming applications such as Napster, Soundcloud, and presently Spotify, has altered this to an extent, blockchain technology seems to be a subsequent step after it involves the creators and their listeners taking their power back.
Blockchain technology, streaming and royalties
What is the dynamic that blockchain introduces into the music industry? One of the most observable effects is the capacity to do away with middlemen from the process of music sales and streaming. While streaming platforms have altered the medium through which music is consumed, developing it a lot broader out there to the listener, it has conjointly developed a totally new level of mediation amongst artists and fans.
The music streaming trade has definitely returned as a stark enhancement, furnishing an effective and streamlined alternative to piracy, enabling artists to obtain royalties for their work. But, with this paradigm shift, the simple discrepancy with regards to the distribution of royalties to artists resembles an economic specialist chart where a really minimal share of artists account for the majority of music streams and subsequently, royalty earnings.
This payment discrepancy is due to various factors, combined with the artist’s inherent style and genre and nation of origin. While localized services such as China’s AliMusic will counter these issues on a geographical level, there’s no doubt that the distribution of royalties can forever remain skewed, with one or two hyper-productive artists staying dominant in the majority of the market.
While the skewed distribution is not likely to be completely known, appreciating popularity for trending artists will form a major distinction and get them to into numerous markets. It can even enable shifting the administration currently managed by third-party intermediaries such as labels and platforms that have significant influence over what music is visible to the public.
Blockchain-based music streaming platforms attempt to tackle this awful drawback. Opus, as an instance, harnesses two completely differing P2P networks to do away with the middlemen completely and supply a completely suburbanized streaming platform – music leverages the heavenly body classification system or IPFS, which might be a P2P network for file sharing and storage where end-users of the network conjointly function as servers. In this way, all hosting fees connected to streaming are nearly eradicated.
Opus conjointly leverages the Ethereum network as a payments layer. Through the leveraging of robust contracts, it enables artists to be paid directly upon the acquisition or streaming of a song, which indicates that every time the content and royalties are separately distributed. This strategy enables the creator to obtain the bulk of the payments created by premium users or ad revenue produced by freemium users, which, in keeping with music, is where the majority of the revenue stems from – as much as 90%.
Streamlining the music industry
Other platforms such as Mediachain, Musiclife, eMusic, etc. target similar royalties issues, and leverage similar technology to provide freelance artists with a much larger piece of the pie they’re essentially making. However, blockchain technology is additionally inducing a paradigm shift towards a streamlined and effective means for freelance artists to touch upon differing aspects of the trade which will typically be tough for the up and coming musicians. Provided the small scale of operations and minimal monetary independence, smaller-scale artists are expected to possess a high degree of monetary and legal prowess, in order to ensure their own fiscal stability.
Ujo, a York-based company, furnishes a suburbanized info of music ownership in scenarios where artists cannot just transfer their work and earn all of their sales and tips with no associated fees, mechanically split pay outs with collaborators of each project. Another undertaking from the USA, the Open Music Initiative, leverages blockchain technology to identify music ownership and has already attracted the likes of Youtube, Sony, Soundcloud, Spotify, and Netflix as members, demonstrating just how influential the technology will be.
In an article dated from 2017 for the Harvard Business Review, Imogen Heap – an English singer-songwriter, record producer, and audio engineer – recalls an event where a popular creator had all of his videos taken down from Vimeo for deploying a 30-second long clip of one of Heap’s songs. Blockchain technology will facilitate, and already assists to find a resolution to these problems.
She stated her desire to avoid these types of issues in the future, expressing her wish to provide an easy and streamlined way for others to license and utilize her works on their proprietary content. A blockchain-driven rights and payments layer might be the solution to accomplishing the same.”
New revenue sources for artists
Blockchain is already doing a bang up job of backing up artists, specifically freelance ones, with regards to the means they are paid and increasing the amounts they get to retain while conjointly streamlining the strategy of copyrighting and distribution of their work, that doesn’t merely end there. Blockchain tech currently enables musicians to tap into another critical class of freelance creator revenue: really engaged communities.
Independent and future artists are typically on the receiving end of potent sense of community that translates into a steady stream of monetary assistance from fans. It’s a variation of the “support native artists” mindset. Concerts and merchandise are identified to indicate an outsized portion of revenue, although blockchain technology presently furnishes novel ways in which to look into this even more.
ANote Music, a Luxembourg-based startup, specified earlier that it intends to launch a blockchain-based platform which will furnish artists a replacement means of accessing capital by enabling end-users to indulge in speculation with regards to music royalties. The platform launched on June 28, and it’ll enable listeners to harness their musical insight by shopping for commercial music royalty shares on a secondary market. Marzio Schena, the co-founder and CEO of ANote Music, explained to Cointelegraph at the time: “Our objective is to unlock the hidden price in music for every investor and artist by developing a stock-exchange platform for music investments.”
The stated platform Ujo enables users to sell digital badges that help the creator and function as “collectible” things, which has become one of the most widespread applications with regards to nonfungible tokens. It enables users to tip their favourite artists directly. Choon and eMusic, two different streaming platforms, facilitate artists to crowdfund, conferring upon them a substitute or alternative revenue stream while generating a financial income with regards to the recording and sale of a song or a full-length project.
Rewarding the fans
Blockchain-based initiatives can even generate financial incentives for music fans, making the music experience interactive. While some platforms such as eMusic reward fans through exclusive content and reduced expenses, differing techniques are being applied. Choon, as an instance, provides listeners rewards for curation of personalized playlists and Viberate rewards fans with its native VIB tokens for contributing to its info of artists, venues and events. The Inmusik platform contains a similar framework that rewards users with Sound Coins.
While platforms such as Viberate already feature more than 450,000 artists, which is a considerable achievement, trade giants are making an attempt with new blockchain-based incentive models – most perceptibly, 1 out of 3 major labels within the trade. Warner Music has made a massive $11.2 million investment in a very new blockchain network referenced to as Flow, that was developed by Dashing Labs. Jeff Bronikowski, the global head of strategic music initiatives at Apple and also the former senior vice chairman of business development at Warner Music, stated to Cointelegraph: “The primary objective is to form new avenues where the fans of our artists will explore their communities and interact with the artists in novel ways that haven’t done prior.”
Therefore, can blockchain incite a paradigm shift and transfer power into the hands of the artists and their listeners? It seems like progress is already occurring, however, there’s also a ton of scope for growth, as artists are drawn to considerably higher earnings.
While these new and evolved incentives for every artist and fan might propel the music industry forward, the prevailing systems historical mishaps might play the crucial part in driving artists toward new and enhanced systems.