How blockchain can switch the music industry, TechCrunch
How blockchain can switch the music industry
Ben Dickson is a software engineer and the founder of TechTalks.
Since the one thousand nine hundred ninety nine launch of Napster’s music-sharing platform, the music industry has been in near-constant turmoil, its timeline marked with dipping revenues, lack of transparency, piracy problems and feuds over the fair distribution of dividends.
Music companies hate streaming services. Streaming services hate file-sharing services. And, most of all, artists and content creators hate virtually everyone else for making big sums off their toil and feeding them the crumbs.
With so many conflicts of interest, there seems to be no one service or business model that can work in a style that sates the needs of all the parties involved. But now, after years of suffering from a thorny and complicated relationship with the tech sector, the music industry might eventually find a chance to head in a positive direction by leveraging the blockchain, the technology that powers the bitcoin cryptocurrency.
The blockchain has drawn the attention of investors and professionals in different industries, and is now displaying promising signs to switch the music industry in ways that might fulfill the needs of everyone.
Well, almost everyone.
Why can blockchain be a good technology for music distribution?
At its core, the blockchain is a distributed ledger that can validate and register transactions without the need for a central authority. No one wields the ledger — it’s spread across the knots that constitute its network and is publicly available to everyone.
Information stored on the ledger is interrelated through cryptographic hashes, which make it virtually irreversible and tamper proof. In a nutshell, it means that parties can make peer-to-peer exchanges of data, money or anything else of value in any amount and in a secure manner.
In the music industry, the blockchain could convert publishing, monetization and the relationship of artists with their communities of fans.
Very first, music can be published on the ledger with a unique ID and time stamp in a way that is effectively unalterable. This can solve the historic problem of digital content being downloaded, copied and modified at the leisure of users. Each record can store metadata containing ownership and rights information in a see-through and immutable way for everyone to see and verify. This will ensure that the correct people will get paid for the use of the content.
Blockchain technology can also revolutionize the monetization of music. The infrastructure is based on clever contracts, programs that can be run on the blockchain along with the payment transactions. Blockchain-based cryptocurrencies such as Bitcoin and Ethereum support micropayments, which is effectively unlikely with classic payment mediums due to transfer costs. This can support a fresh way of suggesting on-demand music services. Users can select the record of their choice and instantly prize the stakeholders with cryptocurrency upon playing it.
And, eventually, one of the advantages of a blockchain ledger is that it can establish a more direct relationship inbetween creators and consumers. Composers and artists will no longer be required to go through purchasing platforms and financial brokers — who usually take a hefty cut of the revenue — and can get directly compensated every time their songs are played. This can be a boon to all those fledgling producers who don’t have the backing of meaty record labels.
Startups and musicians embrace blockchain technology
Companies like Benji Rogers’ online music platform PledgeMusic have published a comprehensive blueprint for the Fair Trade Music Database, a globally decentralized blockchain-based ledger that can solve the problems of ownership, payments and transparency.
Creators can upload their music and the associated metadata on the ledger. Companies and consumers can search and play the music of their choice off the ledger, and brainy contracts will ensure that the possessor(s) of the content will be paid automatically for its usage. The database would store .bc or “dotblockchain” records, which Rogers describes as “a codec that cannot be separated from its rights.”
PeerTracks is another music startup that is getting ready to launch its platform and is betting big on blockchain. PeerTracks is a sort of artist equity trading system that makes it dramatically lighter to manage royalties and revenue, making it especially convenient for artists who can’t afford to pay someone else to do it. The system leverages the MUSE blockchain, a ledger engineered for the music industry.
The company claims PeerTracks will enable artists to instantly claim ninety percent of their sales income, rather than the approximate fifteen percent they presently get.
PeerTracks also introduces the concept of “artist tokens,” a limited and tradable cryptocurrency that artists palm out to their fans and which finds its value from the popularity of its creator. Higher requests for coins created by a specific artist will increase its worth. According to PeerTracks CEO Cedric Cobban, the token system “translates to crowdfunding, fan engagement, talent discovery and community building on scales we’ve never seen before.”
BitTunes, yet another blockchain startup, wishes to deal with another problem, digital music piracy, with a carrot-rather-than-stick treatment, as Simon Edhouse, the company’s managing director puts it. The company offers a bitcoin-based peer-to-peer file-sharing platform that enables ordinary people to become a distribution channel for their own digital music — and earn money.
Last year, award-winning musician and songwriter Imogen Heap commenced work on a fresh music ecosystem, which she calls Mycelia. Based on blockchain technology, the platform will enable direct payments for artists and give them more control over how their songs and associated data circulate among fans and other musicians. She describes the effort as “trying to take away the power from top down and give power, or at least a steering, to the artist to help form their own future.”
Is blockchain the music industry’s silver bullet?
As with any solution, blockchain will not be a flawless response to all the problems that the music industry is facing. But at the very least, it will level the playing field to some degree. And artists, songwriters, performers and musicians — the real owners of the industry — will be the main benefactors, for they will ultimately be able to own their creations and get their due for their efforts.
However, it will likely not be welcomed by those who profit from a lack of transparency in the music industry, or big tech companies that choose to monopolize rather than share. And clashes are likely to ensue if the idea actually gains traction and real momentum.
But as Rogers explains in a follow-up to his original article, “the money being left on the table is dwarfing the money being made under the table,” which means that overall, a semitransparent system would generate much more revenue and create more opportunities than it would actually demolish.
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