Music on blockchain: how can these two industries be connected
The digital age has caused a massive increase in the ways that people listen to music, including numerous digital music platforms and services available now. It is no longer achievable to license music and compensate rights of composers, recording artists, music publishers, and record labels through all the paper-derived processes that are still widespread in the music industry. Music access is intensively growing along with technological progress, and the pace of it is hard to manage as well as the scale of consumption worldwide.
Nowadays the music industry reaches the lowest commercial levels of the music business. The music industries are worth $45 billion globally, of which the record industry is worth approximately $15 billion (Rethink Music 2015). Though, 2015 marked an increase of 3.2% in income from recorded music, yet these numbers are optimistic only if we look in a context of last two years: there is a considerable decline in past two decades (IFPI 2016).
There are two main challenges that the music industry now has: music commercialization and a lack of data. And both problems are trying to be addressed by blockchain technologies.
Nowadays many people think of blockchain as a concept connected to the financial or banking world only, while it actually relates to various fields.
Here are some spheres where blockchain is mostly being used in.
Have a look ↓
- Online Music
- Banking and Payments
- Supply Chain Management
- Public Voting
and many more…
Blockchain technology developed as the foundation for the cryptocurrency bitcoin, and the corresponding payment system, Bitcoin. Blockchain technology allowed payments made on its network to be managed peer-to-peer, without any third parties to confirm the authenticity of the transaction. It has two significant features that make it highly effective as a store of data. Firstly, data written to it is immutable, which means you cannot make changes in the record of events. Secondly, a precise copy is kept in a large number of independent locations: there is no central point of failure.
It is not a secret that for many years there have been various kinds of conflicts between artists and their producers. Those could be connected with the working process and more often with revenue sharing.
Now, the situation can be changed due to smart contracts on blockchain. They are generally faster and more convenient, which is why it’s more common for artists to use smart contracts. Why? because they easily replace lawyers and there is no middleman between the artists and producer. Hence, we see that Smart contracts solve the problems of transparency in the musical industry. They may define the revenue percentages among the participants. One creates a big transparent database by attaching all the right holders to a specific song.
Blockchainis capable of changing the situation in different ways. Firstly, the low transaction costs of cryptocurrencies make micropayments possible. This is particularly important given the small size of typical payments in the streaming era. It would also allow content creators to receive ‘tips,’ even in very small sums. Secondly, smart contracts, implemented via software, could enable music royalties to be administered almost directly and way faster.
A Networked Database For Music Copyright Information
Any music product contains at least two copyrights: one for the sound recording itself, relating to the musician and the record label, and one for lyrics and music, referring to the songwriter or composer and the music publisher. These could be saved on the blockchain.
Blockchain technology can be worked as both database and network. The blockchain functions allow information to sit on a distributed ledger rather than in silos, which means that information on the blockchain would be updated immediately and automatically: the same data would also be open to all users rather than stored in discrete databases.
Blockchain technology has all the potential to change the music industry in a positive way by promoting a free, public database of music copyrights. Blockchain can make songs and recordings quickly tradable, and the use of digital contracts can automate much of the conventional legal procedures. All parties in the industry are expected to benefit from this technology.
Block chain Enables Interactions Between Artists and Fans
Some years ago, it would seem unreal to imagine cooperating with your favorite artists without being someone from musical industry. Now, fans can help their beloved celebrities and also earn money. Artists include an option with smart a contract, which shares a percentage of the generated revenue with fans who shared their songs. Once the artist has reached a certain level of promotion, he/she can then end the revenue sharing. Fans can then spend the acquired tokens in the same ecosystem. As you see, in this case fans turn into active promoters.
Ujo Creator’s Portal was The First Music Company to Use Blockchain
Capetonian Simon’s was the first individual, who entered blockchain technology with hisproject “Ujo Music”, in collaboration with ConsenSys (a New York-based Blockchain software development company).
“We are building a platform that allows musicians to automatically license their works through Blockchain. This gets artists paid immediately, and reduces the barrier to entry for consumers of rights to license music without prolonged contract negotiations,” he says.
Ujo is quite popular, has worked with Grammy artists such as Imogen Heap and RAC by demonstrating the power of blockchain to help artists in this way. In fact, it proves that blockchain has already started to give benefits to musical industry and has managed to help artists to work in fair and assessed conditions.
To conclude, we want to remind everyone that musician’s main function is to create good quality and memorable music without being engaged with sharing their profits and solving conflicts with co-workers.