The Future of Blockchain in the Music Industry

The music industry is one of the most creative and innovative sectors in the world, but it also faces many challenges and problems. Some of these include:

Lack of transparency and accountability in the distribution of royalties and revenues among artists, labels, publishers, and other stakeholders.
High costs and inefficiencies in the intermediation and administration of music rights and licenses.
Piracy and unauthorized use of music content, which reduces the income and incentives for artists and creators.
Limited access and opportunities for independent and emerging artists, who often struggle to reach and engage with their fans and audiences.

Blockchain technology, which is a distributed ledger system that enables secure and transparent transactions without the need for a central authority, has the potential to transform the music industry and address some of these issues. In this article, we will explore some of the ways that blockchain can change the music industry, as well as some of the challenges and limitations that it faces.

Blockchain-Based Crowdfunding

One of the most promising applications of blockchain in the music industry is crowdfunding, which allows fans to directly support their favorite artists and share in their success. Traditionally, fans have supported artists by buying their records, streaming their music, going to their concerts, and buying their merch. However, these methods have some drawbacks:

Most of the money goes to intermediaries such as labels, distributors, platforms, and agents, leaving only a small fraction for the artists themselves.
There is no further engagement or connection between the fans and the artists, beyond consuming their music.
There is no reward or recognition for the fans who support the artists early on or contribute to their growth.

Blockchain-based crowdfunding platforms aim to solve these problems by using cryptocurrency and smart contracts to facilitate the direct transfer of value between fans and artists. Smart contracts are self-executing agreements that are encoded on the blockchain and can automatically execute predefined actions based on certain conditions. For example, a smart contract can automatically distribute a percentage of the artist’s revenue to the fans who invested in them, or grant them access to exclusive content or experiences.

Some examples of blockchain-based crowdfunding platforms for music are:

Royal, a startup co-founded by DJ and producer 3LAU (aka Justin Blau) and Fred Ehrsam, co-founder of Coinbase and Paradigm. Royal allows artists to sell a portion of their future royalties or streams to their fans in exchange for cryptocurrency. Fans can then earn passive income from their investments or trade them on a secondary market. Royal also plans to use NFTs (non-fungible tokens) to create unique digital collectibles that represent ownership of music rights or assets.
Corite, a platform that allows fans to invest in their favorite artists and share in their success. Corite uses smart contracts to distribute royalties to both artists and fans based on their contributions. Fans can also access exclusive content, perks, and rewards from the artists they support. Corite has partnered with YouTube and Apple Music (full disclosure: YouTube and Apple Music are commercial partners to my company for music distribution) to track streams and revenues.
Utopia Genesis Foundation, a non-profit organization that aims to create a global music rights database and marketplace on the blockchain. Utopia Genesis Foundation allows artists to register their music rights on the blockchain with a unique ID and timestamp, which can then be verified and traded by anyone. Utopia Genesis Foundation also enables fans to invest in music rights or tokens that represent fractions of music rights.

Blockchain-Based Music Distribution

Another way that blockchain can change the music industry is by enabling decentralized and peer-to-peer music distribution, where artists can directly upload their music to the blockchain network and reach their fans without the need for intermediaries such as labels or platforms. This can reduce the costs and complexities involved in music distribution, as well as increase the control and autonomy of artists over their music.

Some examples of blockchain-based music distribution platforms are:

Audius, a decentralized streaming service that allows artists to upload their music to a network of nodes (computers) that host and distribute their content. Artists can set their own terms and prices for their music, as well as earn cryptocurrency from streams or tips from fans. Audius also uses NFTs to create unique digital collectibles that represent ownership or access to music content or experiences.
[Opus], a decentralized music platform that uses IPFS (InterPlanetary File System), a peer-to-peer file-sharing protocol, to store and stream music files on the blockchain. Opus allows artists to upload their music directly to IPFS nodes, which can then be accessed by anyone with an Opus app or browser extension. Opus also uses smart contracts to distribute royalties to artists and other stakeholders based on the number of streams or downloads.
[Musicoin], a blockchain-based music platform that uses its own cryptocurrency, Musicoin, to pay artists and listeners for streaming music. Musicoin uses smart contracts to automatically split the revenue from each stream among the artist and other right holders, as well as reward the listener with a small amount of Musicoin. Musicoin also allows artists to create their own channels and playlists, as well as interact with their fans and communities.

Blockchain-Based Music Rights Management

A third way that blockchain can change the music industry is by improving the management and administration of music rights and licenses, which are often complex and fragmented across different entities and jurisdictions. Blockchain technology can provide a transparent and immutable record of music rights ownership and transactions, which can simplify the process of identifying, verifying, and paying the right holders for the use of their music.

Some examples of blockchain-based music rights management platforms are:

[Dot Blockchain Media], a platform that aims to create a new standard for music metadata and rights information on the blockchain. Dot Blockchain Media uses smart contracts to embed music rights data into the audio files themselves, which can then be tracked and updated across different platforms and services. Dot Blockchain Media also allows right holders to set their own rules and preferences for how their music can be used or licensed.
[Vezt], a platform that allows right holders to sell a portion of their music rights to fans or investors on the blockchain. Vezt uses smart contracts to record the ownership and revenue share of each music right, as well as to distribute royalties to the buyers based on the usage or performance of the music. Vezt also provides a marketplace where music rights can be bought and sold by anyone.
[JAAK], a platform that uses blockchain and artificial intelligence to create a global network of music rights databases. JAAK connects different music rights organizations and registries on the blockchain, which can then share and synchronize their data using smart contracts. JAAK also uses machine learning to analyze audio files and match them with the corresponding rights data.

Conclusion

The future of blockchain in the music industry is promising. As the technology matures and overcomes its current limitations, we can expect to see increased transparency, fairer compensation for artists, and innovative business models that reshape the music industry. However, there are also some challenges and risks that need to be addressed, such as:

The scalability and interoperability of different blockchain platforms and protocols, which can affect the performance and compatibility of various applications and services.
The security and privacy of the data and transactions on the blockchain, which can be vulnerable to hacking, theft, or manipulation by malicious actors.
The legal and regulatory compliance of blockchain-based solutions, which can vary depending on the jurisdiction and context of each use case.
The adoption and acceptance of blockchain technology by the existing players and stakeholders in the music industry, who may have different incentives and interests.

Therefore, it is important for the music industry to collaborate and cooperate with the blockchain community, as well as with other industries and sectors, to explore the potential benefits and challenges of this emerging technology. Together, they can create a more fair, transparent, and efficient music ecosystem that benefits both artists and fans.

The Future of Blockchain in the Music Industry