Credits: virgin.com
Brief Look into the Music Industry
Behind every music artiste you see, there is a whole team working behind the scenes to drive and ensure the success of that artiste.
It is just like a manufacturing company with different departments, machines, and processes focusing on one result - the release of a product that meets consumers' expectations. In this case, the artiste or the song is the final product, and the listeners are the consumers.
So how is each person paid for their contribution to the final product? It's quite a complicated process, which depends on the side of the equation the person is, i.e., the demand or supply side.
The demand side, in this case, would mean those teams that interface with the customers. On the other hand, the supply side would be those involved in working with the artistes directly, that is, artiste managers, record labels, and publicists.
The music industry has evolved over the years to create several auxiliary sectors that depend on the success of the parent industry. At the beginning of commercial music production and distribution, the dominant teams were the recording industry, the physical distribution industry, the live and touring industry, Artist Management, and Radio/TV broadcasting.
Over the last 30 years, the music industry has expanded its scope to include sectors like the streaming industry, licensing and sync, and digital music distribution industry. This development shows that the music industry has evolved with every new technology. The industry is already incorporating virtual reality as part of its distribution channel.
Challenges of the Current Music Industry
Although the music industry has evolved with every significant technological advancement, there are still substantial challenges that these new technologies still need to solve. For instance, after the successful production of a song, the record label or artiste has to make it available to the prospective audience to listen tobuy.
Three decades ago, radio, cassette tapes, and CD players were the only channels available. However, streaming platforms came onto the scene alongside traditional distribution channels with the development of new technologies and internet applications.
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While this may be positive news, considering that there are now more options that music enthusiasts can use to access the best music collections, there is the major issue of addressing revenue calculations.
Royalty payments and fees Problem
Another recurrent challenge is the issue of managing royalty payments and fees. This is because several teams are involved in making a song's release possible. The collaborators of the music project would sign a contract that will stipulate the revenue-sharing formula. With several distribution channels, it can take a long while to aggregate this payment and send it to the respective teams.
According to industry reports, the calculation for royalty payment alone takes about a year to conclude. This delay may seem challenging to understand if one does not consider that there are more than one type of royalty payment. Also, some music projects may involve a lot of collaborators, partners, and investors.
Sound charts highlight six different types of royalty payments, which include streaming royalties, neighbouring rights(and royalties), digital performance royalties, sync licensing fees, public performance royalties, mechanical royalties.
Apart from the delayed payment of royalties, there is also the issue of establishing rights/ownership of songs. We have heard of several instances of prominent artistes taking content from an existing song without the owner's permission. Consequently, the owner will not receive royalties, except he seeks redress in a court of law.
According to the New York Times July 31, 2019 edition, recording artiste Flame sued Katty Perry for plagiarising the content of his rap song released in 2008.
Now that we have examined some of the issues in the music industry, let us look at how we can apply blockchain technology to change the status quo.
5 Real-World Use Cases of Blockchain Application in the Music Industry
1. Royalties
The current process of calculating and making royalties payments in the music business needs to be streamlined. This recommendation becomes necessary because of the value chain associated with music production, distribution, and marketing, which usually takes a long time to compute since different players are involved.
For example, when an artist releases a song, apart from the songwriter who may be different from the recording artist, one or two featured artists, a composer etc., the distribution company also gets royalty payments. These parties would get an agreed percentage, stated in the contract terms, signed before the production begins. The process of receiving royalty payments could take months or even a year.
credits:medium.com
However, with blockchain applications, the payment of royalties can be made via smart contracts, eliminating unnecessary third parties that cause delays.
Streaming giant, Spotify acquired Mediachain, a blockchain platform, to improve the speed of royalty payments and transparency. Spotify currently has over 1 million artists on its platform.
2. Music Rights Management
There are several cases of plagiarising in the music industry, including famous artists copying lines from other unknown artists, sometimes hoping no one would notice it. Some artists may get away with such acts, especially if the original writer did not establish any intellectual right.
Credits: blockchain beach
Blockchain technology can solve this problem, as a writer can input their information on the chain, showing the time they wrote or composed a song.
Remember that records on the blockchain carry a time stamp and are immutable. This timestamp will serve as proof of content creation. 'Ujo' is a blockchain platform that has solved this rights ownership problem by creating a music ownership rights database.
3. Decentralized Music Streaming
Music streaming is gaining popularity every day. This is because most streaming platforms are a one-stop shop for music. Popular platforms like Spotify, Sound Cloud, and Apple Music add over 24,000 songs daily. However, the platforms may be better for independent artists (indie artists) because they may not be able to negotiate the best deals for themselves.
With blockchain-enabled streaming platforms, indie artists can set up smart contracts that will monetize their work efficiently in a peer-to-peer marketplace without the input of intermediaries.
Credits: steemit
An example of a blockchain application that Indie artists can use for the distribution and monetization of their work is Voise. The Voise platform enables the artist to upload content, while different users will see the song on display depending on their preferences.
BitSong is another decentralized streaming platform that allows artists to monetize their songs by attaching them to adverts. The artist and listeners receive a commission payment from the advertiser's fee.
Concerts and events take a lot of planning to make possible, and finance is one of the essential elements required to fulfill these plans. Apart from the big record labels and entertainment companies like Sony Music, Universal Records, and so on, most new practitioners do not have access to a large pool of funds. Hence, they can only promote just a few talents at once.
With blockchain technology, record labels and indie artists can use crowdfunding to finance their concerts and shows. The concert tickets can be sold via the blockchain platform, and through smart contracts, each investor will receive a percentage of the ticket sold.
Credits: steemit
Emusic is a blockchain app that allows fan-to-artiste crowdfunding and grants artists access to instant royalty payment and rights management.
5. Tokenised Fanbase
Do you know any big-time artists currently facing financial problems? If you think clearly, you will probably remember one or two famous musicians with a considerable fanbase that does not correlate with the balance in their bank account.
credits:steemit
Blockchain technology allows musicians and performing artists to monetize their fanbase. Brave, a decentralized browser app, announced that fans can now support their favorite YouTuber using Brave payments.
Conclusion
While we may not be able to exhaust the use case of blockchain applications in the music industry, it is clear that a new order to conduct the music business has emerged. Recording artists are receiving more power to negotiate how much they should earn from the content they create, and fans can quickly get their preferred music without having to sort through the plethora of new songs daily.
With decentralized music apps like AUDIUS, INMUSIK, OMNI, etc. more blockchain firms are coming into the music industry, which will revolutionize the entire music business.
