Artists on the Blockchain

Ryan Tanaka
Jun 7, 2015 · 7 min read

During the height of the Bitcoin craze last year — when terms like “cryptocurrency” and “the blockchain” entered mainstream consciousness — I decided that I would try to get involved in mining/trading activities happening within the Bitcoin community at the time. I didn’t really have any ambitions of striking it rich, but wanting to know what all the fuss was about, I invested some money in a small USB-powered mining rig and 1 BTC in order to see where things would go. (It also coincided with a weird time in my life when I first decided I would put an investment in a new musical instrument, the Seaboard GRAND.)

Although the “blockchain” has become somewhat of a buzzword in the tech industry, the general public is still largely confused about what the term means because of the lack of applications out there that helps to bring its concepts down to a tangible level. With the emergence of Ethereum and other crypto-dev communities that may soon change, but at this point, most of its proposed benefits are more theoretical than real.

If you look into the subject a little more, however, you’ll see that there’s a good reason why many people are still excited about it, even now. (Even cellist/composer Zoe Keating is supporting the cause.) Bitcoin itself may or may not survive, but the blockchain technologies that make it work will probably stick around for a long time because it offers a very real path towards fundamentally changing the way we interact and do business with one another on the net.

By and large, the internet hasn’t been very kind to artists as a whole, so there’s naturally going to be some skepticism involving new technologies that offers new “opportunities” for anyone out there. But, if nothing else, blockchain technologies may be able to make good on the promises that were made to artists in the early days of the internet, which have yet to be fulfilled.

Spontaneous and Transparent Contractual Relationships

The primary benefit of building content creation platforms over the blockchain is that it has the potential to embed and enforce copyright/contractual relationships directly within the code itself. For example, an uploaded video could have its ownership and revenue sharing contracts directly embedded into the content, splitting its income automatically among those in the group. If there’s a 45/25/15/15 agreement between the interests of the platform/artists/producers/marketers, any dollar (or bitcoin) earned through streaming, broadcasting, or performance rights networks can be distributed automatically among each party securely and instantaneously by those percentage amounts. Should the ownership of the video itself ever get sold to another party, the money can be split in a similar manner as well.

Disputes and discrepancies, should they arise, can be resolved quickly and easily— each transaction generates a unique/universal ID (a “hash”) that keeps track of each transaction/change that takes place within the item itself. So the process remains transparent from beginning to finish, without the need for constant monitoring, book-keeping, or investigative work.

In many ways, the blockchain represents what the internet could have been, had there been a greater initiative to create platforms that were transparent, effective, and fair. But, as George Howard argues here, the development of these types of technologies have been slow to come, despite the tech itself being readily available, because there isn’t really an incentive for media companies to willingly disclose their methods to the general public in this way.

Bluntly: the parties who benefit most from the lack of transparency are the ones who will resist anything that ends the lack transparency.

Bitcoin Can’t Save The Music Industry Because The Music Industry Will Resist Transparency

As Zoe Keating’s experiences as an online-musician have shown, neither the old nor new guards of the media industry have been particularly forthcoming in terms of making their methods transparent and clear, since they stand to benefit from the lack of understanding artists and consumers have of the process itself. While the fate of Tidal and other Hollywood-based content platforms are yet to be determined, these services don’t really offer anything new other than a promise in change in management styles. Their value proposition largely is “trust us, this time things will be different” — which will be a tough sell, given the current atmosphere of distrust and skepticism that has built up within the creative communities over the years.

The lack of transparency may work to media companies’ advantage in the short term, but is also the main reason why they’re struggling to survive — people have come to expect a certain level of clarity of how things work, especially on internet-based mediums. The distrust of the industry has had a overall negative effect on artist participation, content quality, and consumer satisfaction overall, which has caused the market to race to the bottom, allowing retro/nostalgia-based aesthetic forms to flourish in recent years.

For many, this situation — the failure of the new and the recycling of the old — is seen as a largely hopeless, unstoppable downward spiral. On the other hand, this situation also presents itself as an opportunity for a new contender to disrupt the industry in its weakened state. And the source of this disruption is likely to come from the blockchain, since it has the potential to automate (rather than destroy) the inner-workings of the content creation process in its more complex forms.

YouTube: New or Old?

Interestingly enough, when YouTube talks about the history of content creation on the internet, their tone tends to be more reconciliatory than triumphant — they’re well aware of the fact that the internet’s media landscape may not have had the most noblest of beginnings (piracy) and have been looking for ways to “make amends” to artists by giving them more tangible and meaningful benefits for long-term growth. They’ve taken concepts from Hollywood’s “artist development” practices and have implemented them into their system in their own way, creating a hybrid system that attempts to balance the old and the new.

As of today, YouTube is poised to dominate the next generation of emerging artists and content creators for one simple reason: they offer a small, but very real possibility of earning a livable income outside of the Hollywood media machine. Spotify, iTunes, Pandora, etc. might sell a lot of streams/downloads in volume but they don’t offer much to artists other than acting as a minor distribution channel — one out of many. YouTube, on the other hand, offers career, technical and strategic support to artists who succeed above a certain level, making it more appealing for artists to stay loyal to the platform for the long haul. The chances of “making it” as a YouTube artist might be 1% or less, but it’s certainly better than the 0% that other platforms have to offer at this point.

YouTube’s impressive growth, success, and ability to produce in-house celebrity figures pretty much speaks for itself, but it does tend to favor a certain type of output as its success model — “commentary” videos that can be produced fairly quickly and on a regular basis. (It also tends to favor the visual over audible — making it more difficult for musicians to earn their success.) You can only get so far running a YouTube channel as an individual artist, however — in order to take things to the next level, eventually there becomes a need to collaborate with others and get multiple parties involved with the process.

It’s rumored that YouTube may already have a revenue-share model implemented in their Content ID system, although its currently only available for top-tier artists at this point. If they manage to scale this system to the mass-market, it’s not unthinkable that you may soon start to see full-length films with high-production values produced completely within the YouTube system itself. These systems would basically allow for production company-like entities to emerge and dissolve spontaneously, without the need for a lengthy (and often expensive) legal process.

While YouTube’s content management systems may not be perfect, they’re still years ahead of the competition since they have a little better understanding of what artists’ actual needs and wants are. (A little goes a long way, these days.) It’s entirely possible that they may develop technologies within their own platform that have blockchain-like properties that may make it difficult for newcomers to enter the field. But even if they manage to succeed, there’s still lots of room for other platforms emerge under the blockchain model since its unlikely that YouTube would be able to serve the needs of every single person out there. (Although they’re certainly going to try.)

Either way, now — more than ever — is a time for musicians and artists to look for new models to emerge out of the midst. The key is to make sure that the platform/company has 1) identified the problems/challenges accurately, 2) is transparent in the way they operate (technically, not just rhetorically), and 3) has real-life examples/testimonials/data that validate the possibility of earning a living wage through the site’s methodologies alone. (I’m not talking about celebrity-level figures, obviously.)

As of today, such a platform does not yet exist, at least in the music industry. But given that the technology to build it is already there, the emergence of such a thing may just be around the corner. Keep and eye out, either way.

Ryan Tanaka

Written by

Civic Tech, Music, YIMBY.

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