Artwork by Nick Dupey

Musicians + Bits + Blocks

How the technology that powers Bitcoin might reshape the music industry.

[The introduction to this series can be found here.]

While the digital era has drained many wallets in the music industry, it’s brought on a spate of innovations, particularly in recording, distribution and engagement. In the last few years we’ve seen new experiences for both artists and fans hinting at behaviors that could be further advanced by block chains*.

Launched just last month, TIDAL, a new streaming service owned by high profile artists including Jay-Z, shows how ownership and an emphasis on artistic intent can set new rules for consumer experiences. PledgeMusic, the “Kickstarter of Sound”, has enabled fans to directly support the development of artist projects and tours. At the same time, digital music distribution has been made relatively simple by Apple, Spotify and others. Yet the connection between musicians and listeners remains loose and abstract.

What if these services and interactions were powered by block chains? A music block chain could offer a public, decentralized warehouse for artists to register ownership of songs, group them into albums, set distribution terms, and collect payment for distribution. It wouldn’t be a huge stretch for any of the major players to try this, but they haven’t. So, we’re imagining it as a new service called Bit Block Music.


Imagine, as a musician, that your fans really support you. They don’t just come to your shows and buy your albums; they’re also your promoters and investors. They fundamentally reshape the role of your record label, creating deeper connections and new forms of value. To show you what we mean, we’ve designed a new experience for a fictional electroclash band of the future called Rift.

Now imagine that you’re a huge Rift fan — the kind of fan who has that dirty setlist from your favorite show framed on the wall. But, you want more. You want to help spread Rift’s music, garner the attention they deserve, and participate in their success because you believe their music is important. You want to be a fan-owner, someone who participates in and stands to gain from Rift’s success.

To preview their new album, Rift hosts a local preview party where they play the album in its entirety for the first time.

You’re in love with the title track, so you buy 1 of the 100 open shares, instantly becoming part of a community of loyal fans and believers. While this might seem similar to Kickstarter, you are not only taking the place of a traditional label funding the band’s efforts, but also setting yourself up for gains if the album becomes popular.

What block chains could enable: Block chains could enable shared ownership at a granular level, which record-keeping and outdated laws have made infeasible until now. We could program the rules of ownership into each album, and money could be routed automatically and proportionally to all shareholders, making the notion of partial ownership possible. This is a huge leap forward for the many labels and industry players that have been struggling to create a centralized database of rights holders, enabled in an entirely new way.

As a fan-owner, you’re literally invested in Rift’s success. A few weeks have gone by and Rift shares some help requests in the app. They range from writing a press release to making connections to show venues. Being a graphic designer, you want to help out.

Your posters will be used by the band, by show venues, and by other community members to help spread the word.

What block chains could enable: Finding qualified people to provide services and easily paying a distributed network of helpers would be rough work today. With block chains, musicians could not only understand the reputation of someone’s skills, but they could also use smart contracts to structure efficient pay for work done.

Now that the album is recorded and ready, Rift sends out first editions of Making Waves to each fan-owner. Although block chains can’t prevent all means of copying songs, each first edition has provable ownership and rights associated with it. Like many fan-owners, you make your first edition unique by adding to it.

Each first edition takes on its own value that can eventually be sold or transferred to someone else who wants that unique edition.

What block chains could enable: Block chains could prove ownership and provide traceability for first editions. They could protect the song itself from modification, but allow fan-owners to participate in the art by augmenting it with new unique contents. As first editions spread, the revenue they generate can pass back through the network to the original fan-owner and the artist. For the musician, they can look to their fan-owners as their trusted network to get feedback, tips, or places to stay — understanding their reputation and credibility from the past.

A friend of yours happens to be tight with the GM at The Cellar, the biggest local music venue in your area. You push them a copy of Making Waves to see if they’re interested in hosting a tour show. Later that week, you hear back that Rift is scheduled for next month. Huge news! The show sells out, and they kill it. You’re curious how this impacted album sales.

This is the power of the Bit Block Music community — it unifies a community of fans as collaborators in a shared mission.

What block chains could enable: By openly tracking who owns what and who’s done what, block chains could help us accurately attribute effort. Then we can fluidly tie rewards to effort, giving fans a clear vested reason to become promoters.

It’s a few months later, and Making Waves is widely out in the world. You take a look at your Bit Block Music stats to check in.

You’re also one of Rift’s top ten contributing fan-owners, so you’re pre-subscribed to their next preview party.

What block chains could enable: If nothing else, we already know from Bitcoin that block chains can route money efficiently wherever it needs to go. Escalated to a large scale, we’re inspired to consider how crowdfunding will change our economy and experiences when it can really become crowdinvesting.

Finally, Rift logs into Bit Block Music and sees the network of 100 fans who have invested in their album.

What block chains could enable: With block chains, we could track each fan-owner’s efforts and expose all of the information to the creator. We can capture the history of relationships and help creators and consumers build deeper relationships.

With all of these moments in mind, we’re really excited about disruption that block chains could cause in the music industry. Three of the five areas we previously identified show up strongly here:

Peer-to-Peer Exchanges — Block chains can enable connections directly between artists and listeners (or, more generally, creators and consumers). They can enable exchanges of value beyond just money for goods. For example, fans can provide their expertise or services in exchange for a split of future revenue. We’re curious: What sorts of micro-jobs will people start doing for the bands they love? Where will new jobs or roles emerge because of these new capabilities?

Digital Scarcity — This might be the biggest deal for the music industry — bringing back the notion of limited edition. Musicians could control how scarce or ubiquitous they want their music to be. For example, Rift could release 5 first editions only or make the first edition accessible to anyone. We’re curious: What standard control patterns will emerge vs. when will musicians want to set their own controls? When will scarcity vs. ubiquity be valuable when both are possible?

Trust + Authenticity — It’s possible with block chains to record and trace origin and ownership so that we can prove that a song is an “original.” Digital rights management (DRM) has become a dirty word because it too often implies management by a middleman. We believe that DRM can create new value when it becomes a relationship directly between the creator and consumer. It’s also important that musicians can trust their supporters for help based on reputation and their proven track record. Block chains can provide trusted records and information as needed. We’re curious: How will provable originals be valued in digital markets when copies are inevitable? How will reputation of creators and consumers be valued as this type of market grows?

In the music industry, block chains could help us unlock experiences that aren’t possible today: from helping musicians make a stable living to forging valuable connections between musicians and their fans. We’d love to hear what excites you or inspires you about this future. What new questions does it make you ask about the music industry and this technology?


Next week, we’ll be diving into the real estate industry. With an emphasis on trust and authenticity, there are strong human needs that block chains might help solve. How can I know whether the house I’m about to buy has a clean title, rather than insuring against unknowns? How can I avoid nightmare-inducing negotiations or loopholes in loose contracts? How can I sell my house and prove what I’ve done to uphold and improve it? We’ll be designing for first-time home buyers, and all the angst that goes along with it.

Questions? Comments? Builds?
Let us know at futures@ideo.com or @ideofutures

Written by Matt Weiss, Michael Hendrix, Reid Williams, & Tracey-Lauren Milne
Visual designs by
Dan DeRuntz, Nick Dupey, & Kim Miller

* Please see intro to the series for an explanation of the term “block chain”