May 10, 2018
The digital age has caused a massive expansion in the way that people consume and enjoy music, including many different types of digital music services. Moreover, the bustling waves of new advanced technologies, especially blockchain, are bringing secure, reliable, and scalable distributed transaction processing to the music industry. Significant investment and technical talent have also entered the music industry thanks to the advent of blockchain. Below are some incredible benefits that blockchain in music.
One of the main challenges faced by the music industry is that money is being controlled by labels and big companies, as a result, most artists are only able to keep a small piece of pie. Should it be considered fair for the artists – the ones who largely involved in the creative and the performance side of art? Simply speaking, the industry is not there to benefit everyone, and generally, the artists are the last to be rewarded for their work.
Tokens are the native crypto-assets of a blockchain app, which are powered by smart contracts programmed into Ethereum. When an artist tokenizes, they’re turning their intellectual property into a financial asset, meaning an artist’s token can reflect the accurate value of their creative output. Those who buy into the artist’s tokens can own a share of their creations as well as its revenue flows. The more people consume the creation, the higher the value of the token becomes.
Tokenization allows artists to raise funds upfront without relying on an advance from their record label. Meanwhile, by using blockchain in music, distributing content would allow artists to skirt streaming platforms like Spotify to earn royalties on their own terms. Of course, the success of this model hinges on attracting users, but there are reciprocal incentives in place — on both the artist-and consumer-side — for it to take off.
Every music piece contains at least two different types of copyright, one related to the composition itself and the other related to the recording. In the current situation of the music industry, each of these rights is typically held by different owners and generates a different revenue stream. In a very simplified manner, once a composition is created and written down on a fixed medium, it already holds a copyright, regardless of any registry. Songwriters and composers usually assign this right to a musical publisher, which retains the copyright and issues licenses to several types of organizations including record companies (which hold their own copyright once the recording is made as well as a mechanical license for making copies of the work), sheet music printers, movie studios (which hold synchronization licenses to use the song in soundtracks), foreign sub-publishers and many others.
The music industry was turned into a complicated array of publishing and recording agreements and other licenses. This means that finding who is the owner of a determined right in order to obtain a license can be difficult or even impossible. A large number of intermediaries on the industry also means that a very significant proportion of royalties are not received by artists, either because it is hard to determine how much one is supposed to receive or due to costly administrative fees. It is estimated that only less than 20% of Spotify’s payments make it through to the artists, while record companies receive 55% of them.
In this particular case, we can use blockchain in music to help disentangle the situation and create a more efficient system by keeping a comprehensive database of music copyright ownership containing up-to-date information that can be accessed by anyone interested in it.
To sum up, blockchain has not yet reached a level of maturity where it can really be considered a game changer. Nonetheless, the future of blockchain in music industry has been significantly shaping for the better with the advent of blockchain. Artists, songwriters, performers and musicians will be the main benefactors having full control over their creations and ultimately get their due for their efforts.
Infinity Blockchain Labs is a visionary R&D company engaged in intermediary and RegTech services employing blockchain technology. We focus on forming alliances with established businesses and regulatory institutions across various industries, as well as providing collaborative incubation for early stage blockchain projects.
IBL aspires to empower Vietnam to become a global leader in blockchain development and therefore are committed to sharing information to nurture a passionate, educated blockchain community. One of the ways we maintain our role as ecosystem pioneer is by helping create educated blockchain enthusiasts. We are committed to sharing information and resources to help Vietnam become a blockchain hub through conferences, courses, contests, alliances, workshops, speaking engagements and incubations. Information regarding topics like hard forks helps people become more familiar with key blockchain concepts and thus able to adopt the technology.
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