In the ever-changing landscape of finance, a remarkable phenomenon has taken hold: the rapid growth of decentralized finance, or DeFi. This ...
Music is an important part of people’s daily lives. More than just a source of entertainment, music is an art form and a vital part of our cultures. An increase in demand for music consumption has given birth to a major music industry that comprises production, distribution, live concerts, and sales. The music industry always had a tough reputation and still, there are many unsolved issues in this industry that need to be addressed urgently.
This lack of development in the music industry can be attributed to its decline over the past two decades. However, in recent years the music industry is coming back on the right track. In 2015, live music ticket sales made approximately $7.2 billion and are predicted to rise to $9.1 billion by 2021. Moreover, the industry attained a huge 8.1% growth in revenue globally in 2017.
Here is a simple example depicting how Blockchain can be easily implemented in the music industry:
Here’s a chart depicting the growth of the music industry from the past few years:
So, what could be a potential solution for tackling the issues in the music industry? There could be many, but here we are going to show you how Blockchain in the music industry can help the industry tackle its issues.
The role of Blockchain in the Music Industry
Blockchain is a powerful technology that is capable of financial inclusion and has the potential to change many industries.
The application of this technology in the music industry brings a wide scope for the industry problems, as mentioned below:
Blockchain technology aids the music industry with reliable backup, better-searching capabilities, security, and c0ntrol over the content. Blockchain helps to track record sales, booking performances, and tracking payments.
People in the music industry can use this digital ledger to store client information. The process of record-keeping is lengthy and cumbersome. Blockchain technology makes the entire process straightforward, hence, saves time.
We all know that piracy is illegal, and music piracy is one of the biggest factors in the downfall of the music industry. Piracy in the music business is estimated to cost $12.5 billion in total output and the total revenue generated from this illegal business accounts for almost $2.7 billion in the music industry.
If the music industry can tackle pirated music, it would become more stable for artists as well as producers. Blockchain technology can help halt piracy in many ways.
Licensing is indeed a lengthy and expensive process. Those immersed in the music industry need several licenses which can be a daunting process for many artists. Blockchain technology can help automate the entire licensing process and make the entire process faster and more transparent.
Simplifying the licensing process will make everything convenient for music artists to plan their shows, records, and sign labels.
The benefits of smart contracts are inevitable for various industries, including the music industry. Smart contracts are basically the pieces of code that hold agreements made on Blockchain and are fulfilled when certain minimum conditions are met.
According to a report by Medium, so far there are 1,712,287 smart contracts that are operational in the Blockchain network. By utilizing smart contracts, artists and studios can ensure that these agreements are met by other parties.
Perhaps one of the most complicated issues in the music industry is international rights. Blockchain technology can help overcome this issue by acting as a supra-national record keeper for funds. In order to ensure that Blockchain technology should be recognized as a form of intellectual property rights, governments should implement Blockchain as a legal entity for contracts.
Cutting out intermediaries
Blockchain technology can reduce the influence of music companies on the distribution system of the music or could even eliminate the need for the distribution companies altogether. One of the greatest benefits that Blockchain can render is the reduction of third parties.
In the music industry, Blockchain technology can bring the fans and artists closer than before, allowing the listeners to pay a small amount for listening to their songs directly. Such methods have earlier been devised for other types of media such as content marketing.
A perfect revenue resource for artists
With more money coming into the music industry, this industry needs to handle finances more efficiently. Blockchain technology would provide a quick and easy way to handle transactions and records in the music industry.
Some of the highly influential companies are also backing up this argument. According to a survey, it was reported that musicians only received 12 percent of the revenue made in the music industry in 2017.
Blockchain technology can easily overcome this by keeping a record of all sales, which would provide a clearer picture of how much a song or album made.
Blockchain technology adoption by music companies: Use-cases
After seeing the potential benefits of Blockchain technology in the music industry, one can easily picture the outlook of the music industry after and before the implementation of Blockchain technology.
Let’s see how music companies are leveraging the power of Blockchain technology in their enterprises:
A New York-based organization, Mediachain, is basically a peer-to-peer blockchain database for sharing information across various industries. Mediachain is one of the first organizations to integrate Blockchain in their music operations. MediaChain also works with artists to ensure they are paid fairly. The organization also implements smart contracts with musicians that directly state their royalty stipulations without any need for intermediaries.
Ujo, also a New York-based organization, features a blockchain-based platform where musicians can easily upload their original work, self-publish and also control licensing options to manage distributions. The Ethereum platform eliminates the confusion of music ownership and pays artists using smart contracts and cryptocurrencies.
Here is how Ujo is integrating Blockchain for an easy music distribution system:
An England-based organization, Choon enables artists to set up smart contracts with song contributors and ensure a fixed set of total revenue. Instead of waiting for a year to pay artists, Choon can reward them instantly based on how many streams a DLT records on any given day.
So, these were a few of the many Blockchain-based music organizations that are changing their business operations by leveraging the benefit of this innovative technology.
Blockchain technology may not be the answer for all the music industry woes, but this technology can definitely bring the music industry to the 21st century for artists as well as for others dependent on this industry. Theoretically, by paying artists ideally, one can easily change the face of this industry.
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