Blockchain, as we all know, is the technology behind cryptocurrencies, like Bitcoin, and now everything is ready to revolutionize the music industry. Other industries across all domains have begun to use Blockchain technology to explore features such as transparency, automation of execution, direct payments to reduce inefficient practices and increase profits.
Why does the music industry need Blockchain technology?
digital age has led to a massive expansion in the way people listen to music and IFPI (the commercial agency that represents the record industry) has also announced that streaming services such as Apple music and Spotify have become the biggest financial contributors to music industry. But still, the music industry is not out of trouble and is facing major existential problems.
Blockchain technology can solve these problems by providing decentralized control and transparency for all forms of digital content. The music industry can take advantage of this technology as it contributes to the implementation of executive author rights, secure payments and facilitates transparency on the rights of the author.
Licenses and rights management system
In the current scenario, the expression Digital Rights is one of the major problems faced by the music industry.
It is becoming very difficult to define which singer, producer, performer, writer, publisher actually holds the right of the songs and how the rights of the author will be divided among them. The current artist often takes two or more years to receive their arrears or payments.
The same scenario is seen with unpaid royalties that tend to be suspended or delayed in the middle, due to issues such as property rights and missing information.
With the introduction of intelligent contracts in blockchain music, the author's rights will be more applicable.
Music lovers from around the world will be able to see the copyright or the ledger information in one place and help the artist defend his assets more accurately in court.
In addition, an intelligent contract may include the percentage of revenue that will go to singers, musicians; since the smart contracts operate automatically once the predefined conditions are met, it should simplify the whole process for all interested parties involved.
Removal of intermediaries
Another big problem that the companies linked to Blockchain like ArtBit, Ujo and Mycella can solve is associated with the compensation that is provided to each artist.
Currently, publishers, talent agencies, streaming channels, music labels all take a share of revenue before sending them to the real artist that can be a tiny proportion (unless you're Beyoncé).
Streaming services, such as Deezer and Spotify, also require additional intermediaries to ensure that all transfers are conducted in a consistent manner.
Blockchain can solve this problem by establishing a direct relationship between the artist and the consumer and make sure they are paid instantly.
It will also allow the alienation of intermediaries that act as tellers and restore power and money in the hands of artists.
Players such as Musicoin and Revealtor are already proposing to use Blockchain to solve the problem of multiple intermediaries .
With rampant expansion in digitization, users constantly find innovative ways to copy and share content without compensating the copyright owner, and thus eat author rights and industry revenue. musical. Blockchain Security can be used here for unauthorized distribution of content.
One of the ways could be to encode the tracks of the album on the blockchain which will guarantee a unique record every time the song is played. Players like PledgeMusic, BitTunes, PeerTracks are providing blockchain approaches to encode tracks and preserve the uniqueness of the songs.
Currently, there is no single database where all musicians' data can be stored. This may be possible only with the advent of Blockchain technology in the music industry. With a single database for musicians, the industry will become truly transparent and data driven. In addition, it will be easy for artists and filmmakers to collaborate and help maintain the identity of each user.
Challenges for Adoption : With so many features, there will be few challenges in the adoption of this technology for the music industry:
- Single Blockchain : thorough research and study is required to conclude that Single Blockchain will be able to manage the whole industry and in the event that Blockchain
- Legal Considerations: There are some legal considerations associated with privacy laws, data regulation laws, the possibility of violating laws and security regulations. These regulations must be understood by industry players before making the decision to incorporate Blockchain.
- Human Barrier: There are still many people who are not able to understand the potential that Blockchain technology holds for the future and therefore shows resistance to acceptance
On April 25, 2018, the Modernization Act approved the House unanimously with 415 votes and in May 2018 the Senate presented the bill to the House. The bill focused on providing better royalties to writers of creative songs and artists. The bill (HR 5477) was introduced by co – sponsor Robert Goodlatte (R-VA) and Jerrold Nadler (D-NY) and will respond to the following concerns:
- Guarantee payments of royalty and protection for performances prior to 1972.
- Provide the right of statuary to recognize other creators, including sound engineers and producers.
- Improve a system of mechanical licenses that encourages a lot of paperwork and lawyers for royalties and payments.
- The unified standard tariff for music author rights.
The new Senate bill combines three separate legislative acts:
- The MMA of 2018, S.2334, presented by Senator Hatch (R-UT) and Senator Lamar Alexander (R-TN) in January, updates licenses and fees related to streaming.
- The CLASSICS Act, introduced in February by Chris Coons (D-DE) and John Kennedy (R-LA) to ensure that songwriters and artists receive royalties on songs prior to 1972.
- The AMP Act, introduced in March by the Senate Judiciary Committee Chair Chuck Grassley (R-LA) and Classification Committee Member Dianne Feinstein (D-CA.) With support and Senators Bob Corker (R-TN) and Kamala Harris (D- CA).
The Senate bill was also passed unanimously signaling a new era for the record industry.
Inmusik – It is a global music society based on the blockchain. His cryptocurrency, $ OUND, is the first of its kind in this creative sector. It has 4 brilliant features –
- Prizes and incentives: reward its fans simply for interaction.
- Fair payments for artists – Artists are paid fair and transparent and can connect directly with fans. It is basically designed for independent and signed artists.
- Financial monitoring – With the help of intelligent contracts and distributed registers, it is possible to automate every part of the revenue.
- Faster Liquidity – Anyone earning in the particular community would be paid
- Artbit – It was built on Hashgraph, a decentralized and distributed accounting book platform. It is also a way to introduce smart contracts in the music industry. It is a mobile application that allows the public to get combined experience in art and technology. It also allows the artist to upload his work on the platform anywhere and at any time and helps to make his work recognized by art lovers from all over the world. With Arbit, artists have direct access and people would be able to go online right away, without being advertised. Artists also have a direct community, without intermediaries and provide secure and direct payments .
- Master – It is a platform based on blockchain for listeners and creators. It allows artists to distribute their music in a peer-to-peer fashion so that profit margins are high while their fans enjoy music at a lower cost. In addition, the artists will not have to worry about the high cost of music production as the services of the intermediaries will be eliminated and even the customers will have to pay low rates for the songs.
His project consists of 2 parts –
- Ensemble – It is designed for independent artists without any support or funding of record labels. It helps them raise funds through crowdfunding.
- Symphony – It is the distribution arm in which the artists are able to use the peer-to-peer network that helps to distribute their music to their fans. The distribution of rights, copyrights and transactions takes place in a transparent manner.
It is quite evident that Blockchain technology can solve problems that have afflicted the music industry for decades. A feature like smart contracts can include the bifurcation of how much income should go to each person.
In addition, all rights holders involved can be contacted quickly for license applications. When all rights holders for a particular song are recorded in the blockchain, it helps to create a transparent database that anyone can access.
In addition, artists would receive their share in an instant rather than waiting days or months.
Thus, the most important characteristics of music on the blockchain would be fair payments to artists, faster liquidity as payments would be made immediately available to anyone received in that community, and tracking of financial data, that is, every small part of revenue it could be easily automated and made transparent.
Stephanie Vaughan is vice president of finance and operations of mixx labs, a venture-backed blockchain protocol for highly secure payments and messaging. Stephanie is an expert in tokenomics, security tokens and capital markets. Previously she was Director at BlockNext Ventures and Director of Capital Markets / Development at StreetShares. A graduate of the US Naval Academy, where she graduated in Quantitative Economics, Stephanie holds a Master's in Business Administration, Finance and Economics from Columbia University.