Blockchain technology is surmounting the peak of the music industry with moving the power from intermediaries back to artists. Blockchain technology consists the power to increase financial insertion and change the lives of many around the world, mostly in up-and-coming economies where it’s needed the most.
Blockchain technology is surmounting the peak of the music industry with moving the power from intermediaries back to artists. Blockchain technology consists the power to increase financial insertion and change the lives of many around the world, mostly in up-and-coming economies where it’s needed the most. The capabilities of blockchain technology have been recognized by many as even the toughest critics of Bitcoin (BTC) has mentioned the use cases for blockchain technology is most often considered as limited to the financial industry.
In this situation the most distributed ledger system created among Bitcoin is considered to have had more strong use case in the zone of currency and assets, where value can now be digitally transferred without any help or with the risk of duplication as ownership is unchangeable and verifiable, these applications can be translated into many other industries other than finance. For example, the music industry which has also in many scenarios been controlled by gatekeepers, has gone under scrutiny. Even with the arrival of internet among other platforms such as Napster, Soundcloud and Now spotify has transformed into a stage where it seems like blockchain technology is the next major move which would come to giving power back to creators and their listeners.
So, in all of this what is the role of Blockchain? Blockchain is one of those mediums which is capable of removing the middlemen from the process of music sales and streaming. While streaming platforms have seemingly changed the way music is accepted, making it even more reachable and available to the listener, it has also built a whole new sort of bridge filling the gap between artist and fans. The music streaming industry has seen some clear development, providing a cost-efficient and user-friendly option to piracy which allows artists to achieve royalties for their work. Nevertheless, with this shift the disparity regarding the terms related to distribution of royalties have come into light. It also highlights others issues, the distribution of royalties to artists is similar to pareto chart where a very small percentage of artists account for the most of music streams and thus royalty earnings.
This disparity in payments is because of many impending factors, such as an artist’s music genre and country origin. While there are China’s localized services such as AliMusic which can fight these issues on a geographical level, it is most likely due to the distribution of royalties which will always remain askew, with a lot of hyper-productive artists influencing the majority of the market. Even though there are skewed distribution which is not completely transferable, improving conditions for upcoming new artists could make a huge difference and result in a much more developed and diverse market. This could prove to help in changing the control currently handled by third-party intermediaries such as labels and platforms, which holds a huge amount of power over what music gets to be heard by the general public.
Blockchain-based music streaming platforms are trying to break down this issue. For instance, Opus balances two different peer-to-peer networks which focuses on removing middlemen completely and provide a fully decentralized streaming platform. Opus uses the InterPlanetary File System, or IPFS, which is a p2p network used for file sharing and storage where users of the networks act as the servers. Through this method all hosting fees connected with streaming are virtually removed. Opus balances the Ethereum network as a payment layer. With this method of smart contracts, it lets artists to get paid directly upon the purchase or stream of a song, which basically points out that both content and royalties are independently distributed. This system lets the artist to achieve almost all of the payments made by premium users or ad revenue generated by freemium users, which based on Opus, is where most of the revenue comes from some times even as high as 90%.
Some other platforms such as Mediachain, Musiclife, eMusic and others focus on the same royalties’ issue and try to use similar technologies to let artists to be independent with achieving more incentives. nonetheless, blockchain technology is slowly becoming an easy and streamlined way for independent artists to deal with other parts of the industry which is capable of being challenging in different stages for artists. According to a report by Opus, “Given the small scale of operations and low financial independence, smaller artists need to have high levels of financial and legal literacy, in order to secure their own financial stability.” Blockchain is already upgrading the way artist especially independent ones are getting paid and increasing the amount they get to keep while focusing on streamlining the process of copyrighting and distributing the work. Also, blockchain lets musicians to shift into another category for independent artist revenue: highly engaged communities. “The main goal is to create new avenues where the fans of our artists can explore their fandom and engage with the artists in new and different ways that they haven’t done before.