Over the course of this year, we’ve seen a massive surge in blockchain technology, and everything surrounding it, from NFTs and cryptocurrencies to decentralized marketplaces, tech companies and much more. Though the technology has been around for more than a decade, this exciting new digital world is receiving more and more acceptance from the general public, and it’s safe to say that blockchain technology undoubtedly has the potential of disrupting the music industry for good, in the years to come.
Blockchain is a decentralized data structure that holds records of—most notably—digital transactions. You may have heard about NFTs amidst the recent media frenzy following Beeple’s 69 million dollar sale of his NFT, which drew international headlines.
When it comes to NFTs, blockchain comes in handy as the perfect way to create proofs of authenticity for digital content; if implemented correctly however this technology can help solve a lot of issues within the music industry, and make artists and fans lives much easier.
Some of the biggest shortcomings within the music industry that blockchain technology can assist in fixing, are low transparency (especially when it comes to metadata and copyrights), minimal artist payouts due to lots of middlemen, and lengthy royalty payment processes. Through smart contracts (automated programs on the blockchain), musicians could be paid for fractions of a cent each time a listener presses play on one of their songs, allowing the process of royalty payments to take place in seconds instead of multiple months. Unwanted third-party intermediaries will no longer be needed, thus leaving more money at the hands of artists, who can build a direct seller-consumer relationship with their fans through blockchain technology. When it comes to transparency, the blockchain makes up for a secure way to prove ownership over a specific piece of music, as well as confirm every person who is involved in its copyright. Additionally, it can grant all streaming and fan activity data directly to the hands of the artists, who are now usually only receiving access to the data their label, distributor or streaming platforms are giving them access to.
There are countless new blockchain-based tech companies right now, collectively working towards pushing the industry forward. Audius for example is one of the most popular ones, a free, decentralized streaming platform that connects artists directly with their fans, and makes sure artists receive royalties fairly and immediately via smart contracts. The fact that files uploaded on the site are not held in Audius’ servers, but are recorded on the blockchain, opens endless possibilities for monetizing music that were technically impossible up until now.
Open Music Initiative (OMI) on the other hand, is a nonprofit organization, with members such as Soundcloud, Red Bull Media and Netflix, who is using blockchain to identify and fairly pay the rightful music rights holders, as well as bring them transparency and deeper data insights.
Furthermore, the implementation of a global copyright database, which blockchain can offer, is needed within the industry now more than ever. This would solve many issues such as conflicting or incomplete records and allow content creators to have all elements of their musical works captured on a unified system.
