Is Music Blockchain Here to Stay?
With the increase support from governments all over the world, it’s apparent that Blockchain and Cryptocurrencies will be around for the foreseeable future, but how can we predict what it would look like? Examining past disruptions is a good place to start as it’s been proven that all major disruptions follow a similar pattern.
While writing the white paper for Inmusik about how blockchain is capable of changing the face of Music Industry forever, I saw some strikingly similar characteristics to the early DotCom days. That trend may be a good indication of what we can expect in the coming years. In fact, with some of the recent viewpoints from traditional financial establishments, I am reminded of the infamous quote by Robert Metcalfe, founder of 3Com, who in 1995 said ‘I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse’. Thank goodness he was wrong!
Learning about the future from the past
What does the future hold for cryptocurrency? Let’s try to break it down and look at the patterns.
The starting point is always a true disruption coming from groundbreaking technologies that enables a completely different business model. Let’s examine:
Internet: A new technology can enhance an old way of doing things. Let’s take physical music CD’s which, when the internet became popular, were sold online. However, streaming music online gave us access to instant, more enjoyable way to listen to music, and along with the exponential growth in its adoption, this major disruption on people’s lifestyle has since almost completely killed the CD business. It is not that CD’s aren’t working anymore, but music streaming instantly online gives a more satisfying outcome.
Blockchain: Like the internet, Blockchain has become the technology from which new business models can be created. For example, what we are creating at Inmusik is a completely new business model and new approach to how we experience music.
Streaming, as we say it, is a one-way street, you pay, and you listen to music. At Inmusik, with the help of blockchain and cryptocurrency, we are a multi highway infrastructure by comparison! Built on an actual business model, Inmusik’s cryptocurrency $OUND tokens can be purchased and as you consume music you are effectively exchanging some of your currency for it . But the biggest game changer is we can assign another value to that exchange, enabling rewards for everyone based on their measurable contribution to the community. To put it simply — imagine you are the first person to listen to a new song, you like it and give a thumbs up. Thanks to your involvement (which is something you do anyway) that song is enjoyed by another user, they give it a thumbs up too and it eventually ends up being played 1 million times. The song earns $20,000 for the artist/writers but, your initial thumbs up helped, in a measurable way, in making that song a success. On Inmusik, you earn a percentage of that payout. Blockchain records all of these transactions, keeps them on a publicly distributed ledger which brings automatic trust to the system and ensures that everyone who contributes to an artists’ or a songs’ success, is rewarded for their help. In one line — it’s a rewards based community experience where everyone gets paid based on the work they do. A new approach and a new business model.
The next is an underground movement which challenges the status quo. This group is the first to embrace the new movement and figure out ways to utilize.
Internet: Sticking to music as an example, the transition from CD’s to a digital format involved people who used peer-to-peer torrent sites like Napster and Limewire to access all the music they wanted for free. It was this early and passionate adoption that evolved into online music streaming platforms like Spotify, SoundCloud and Gaana.
Blockchain: The first group of people to jump on blockchain were independent artists who were sick of the meager payout they received from streaming platforms. They saw blockchain as a solution for better tracking and transparency of their music when few others believed. And, they were right! This viewpoint has led Inmusik to work on a database which manages all music publishing rights and licensing more effectively. The result will be fewer lawsuits, completely transparent payouts, mathematically fair payouts and making data available on every stream.
The last tell-tale sign is questionable activities that negatively impact the space as some find ways to take advantage of the disruption.
Internet: Music and movie piracy became widespread as the ease of access allowed some to profit from copyrighted content by selling bootlegs. Pornography and gambling were also some of the earliest uses of the internet which scared away some investors from getting involved.
Blockchain: Digital currencies allow people to transfer money without it being detected by central banks or governments. This opened the door for activities like money laundering which has led, once again, to a push back from investors and larger institutions.
So what’s happening next?
There are generally three phases of a disruption that have been common through history which will most likely repeat for the crypto space. They are:
1. Creation — the earliest days of the technology where new everything move fast and there is plenty excitement. In the DotCom days, website traffic dictated share prices more than anything else. Many of these companies didn’t have a business model, just cool ideas. Similarly with Crypto, there are 100’s of currencies out there which may have no real business model to fall back on. Still, the value continues to rise. It’s likely that, now we’ve reached the end of this phase.
2. Retraction — everyone starts jumping on the bandwagon and the prices reach unsustainable levels of growth and ‘pop’, the bubble bursts. The DotCom bust of 2000 is extremely similar to the growth charts of bitcoin over the last 4 months. The only difference is that the speed at which crypto is changing is far faster than the DotCom days. Learning from the DotCom days, this kind of correction is healthy for the industry in the long run.
3. Institutionalization — this is where the best innovators create more sound business models based on revenue growth and best practices. For the DotCom disruption, this is the last phase that brought about the mega companies like Google, Amazon, Netflix and Facebook. I think we are just moving into this phase now and we are likely to see the emergence of the future mega businesses. Regulation kicks in, as does common sense, and more investors start getting involved as they search for the next big thing.
This last phase is going to change the world as we know it and impact industries in ways we haven’t yet imagined. That much I am certain of! Will Inmusik be one of the mega companies in the future? Well, we are giving it our best shot! Inmusik is based on a real, viable and sustainable business model discussed with economists, we have an incredible team and experienced advisors. We are also working with the major labels to build a community-focused form of self-regulation. An ecosystem based on a blockchain database that supports the music industry, streaming, and social interaction, with cryptocurrency rewards and a financial framework on which future music industry applications can be built.
The future is bright!