The blockchain will disrupt the music business and beyond

Blockchain will create a new wave of major disruption in media-content distribution. The immutability and “trustless” nature of the blockchain means that it can be used in instances where record-keeping and auditable data is key, including data about who owns what assets, such as music and movies. Once you have verified the validity of an asset entered into the “chain” in the first place, continuity is ensured from then on.

Already, blockchain’s potential to disrupt content rights distribution is coming to fruition in the music business. Streaming services such as Spotify and Deezer require an additional layer of intermediaries to ensure that the artists’ rights management process is conducted properly. As a result, content creators need different contracts in each jurisdiction — often via multiple intermediaries — to protect their copyright and to enable distribution of their content.

But putting content on a blockchain, and having the connectivity for peer-to-peer transactions — via a digital currency such as Bitcoin, or a smart contract such as Ethereum — allows complete transparency and automation of execution, as well as direct payments to copyright holders. With these elements all in place, new players such as Musicoin and Revelator propose using the blockchain to simplify digital-rights management by bypassing the usual intermediaries, thus enabling micro-payments from fans who buy the music to the recording artists directly.

One of the early innovators in this area is Grammy-winning British singer and songwriter Imogen Heap, who in 2015 used the Ethereum blockchain-based Ujo platform to launch the song “Tiny Human” for $0.60 (45p) per download. Now she is working on her own blockchain-based offering, Mycelia, a fair-trade music business that gives artists more control over how their songs and associated data circulate among fans and other musicians.

Following the music industry, the blockchain may also have an impact on the news industry, by facilitating journalists’ rights management, allowing anonymous writers to post content and be paid for by readers, securing micro-payments of advertising and eventually facilitating a pay-per-read model. Independent bloggers and startups such as Civil, a blockchain-based publishing platform, have started exploring this avenue.

Initiatives such as these will disrupt the market for content intermediaries, lower the price to consumers and increase returns to the content creators themselves.

While blockchain technology essentially offers a new form of distribution, there are a couple of ways that it could quickly scale and become a major source of disruption across media and entertainment. It could expand in the coming months through organic growth, which would be dependent on a number of large content originators — artists such as Heap — opting to publish content through this type of venue to drive user acquisition, demand and profit. This could occur if several major artists decide to quit their current deals with major labels and to shift to a blockchain-based solution.

Alternatively, the blockchain revolution might be led by either streaming players or digital retailers themselves. If companies such as Netflix, YouTube, Spotify, Amazon or Alibaba choose to transition their content distribution platforms to private blockchain platforms, it would blow open the use of the blockchain to a broad set of content generators and users, and in the process cut a wide swathe through the complex intermediation process. It might initially occur as just an alternative payment, but it can quickly enable a total realignment in the world of managing artists’ rights.