What Can Blockchain Do For Music?
This is the current reality for the creatives who are looking to make a living with music: it is extremely difficult to make even a modest living in the industry. Every time when someone presses the Play button, it does not matter if it is on Spotify, Pandora or the good old downloadable mp3s, there’s a laundry list of intermediaries that dictates how artists, listeners, and labels should launch and access music — hosting platforms, licensees, talent agencies, distributors, and so on. Getting a fair return out of what musicians and their supporters give to the industry raises yet another question.
The New York Times published an article which shared the difficulty of being a musician: a single hit song can have 900,000 sources of income for the artist based on where the playback happens, but this doesn’t necessarily translate to a reasonable payout. With the music streaming industry generating US$11,439m, rights holders are still not making money from the market that captivated 24% of music listeners worldwide. As of 2017, a song on Spotify, the best known music streaming platform, would need more than 152,000 playbacks from Premium users to generate a revenue of $100 to its rights holders. While listeners and labels have a whale’s share in generating playback and doing overall marketing for the artists that they support and landing them on charts, there is very little payback for all their efforts — there is no clear mechanism out there that is designed to pay user-curated playlists or any mainstream plan to compensate their creators.
Musicians put their hearts and souls into the creation of their art, with labels and fans rallying behind them, yet they are the last to see profits. That is why when Blockchain was first introduced, many saw it as a new light that had the potential to transform the music industry for the better.
What is Blockchain?
Blockchain has been around for more than a decade — it is changing the way people transact, thanks to its highly-collaborative nature. With blockchain, digital information can be distributed to any internet-connected device without restriction from any third party. Another feature of this technology is decentralization — it does not rely on a single computer or a server to run (which prevents a single point of failure), no one can change the data stored in it, and everyone can check transactions recorded in it.
Because of its nature, blockchain technology is bound to change the way people store, send, or spend anything that is of digital value. In the music industry, this means better control of digital rights, with rights holders such as composers, licensees, labels, and distributors being able to upload accurate metadata that will ensure that all playbacks count towards profit, without paying extra to third parties for them to list their songs. At the same time, music consumers will also enjoy better digital rights management, making songs that they purchase readily available to them without getting unwanted restrictions because of their device choice.
The best way to explain blockchain is through the first product that used it, which is the Bitcoin. Before, it was unthinkable to use digital currency for transactions and store value without a bank. Ten years forward, Bitcoin became widely-adopted as a payment method and storage of value, with its users being unhampered by banks and payment processors whenever they transact.
The great thing about blockchain is that it is a malleable technology that can serve any digital exchange. Today, the blockchain is considered the technology that can change the music industry for good.
Augmenting Music Industry with Blockchain
Blockchain has built a name for itself as being disruptive — while it brings about many unprecedented changes, its aim is to improve technologies that are already there. Music streaming, whether via on demand or discovery channels, are going to be enhanced by allowing a transparent system that can make the following possible:
- Allow artists to enjoy transparent and fair payouts
- Have better copyright systems and real-time monitoring of creative work usage
- Involve fans and music enthusiasts to enjoy a wider range of works and support artists directly
- New potential revenue streams and new business models
Inmusik is a platform that is making a name for meeting all of these things. On top of allowing its users to continue enjoying streaming, Inmusik raises the bar higher by creating a revenue stream that will not only allow fair and lucrative payouts for rights holders and labels, but also incentivise what runs the entire business — music listening.
The platform has monetized music curation by turning listeners into investors for their choice tracks — those who put in token votes that has real cash value towards their favorite tracks will be gaining shares from the future revenue that those songs will have. Inmusik also goes a little further by also offering referral rewards. By choosing to create this financial ecosystem, Inmusik has made it possible to encourage playbacks, song discovery, and content sharing while automating payouts.
With blockchain, Inmusik becomes capable of making the following possible:
- Creators getting bigger and timely payouts out of every released product
- Digital Right Management with automatic payouts to all stakeholders
- Artists having the freedom to release music catering to the audience of their choosing
- Producers and labels needing less time and resources to infiltrate the market
- Listeners becoming more outspoken and collaborative when it comes to deciding what they can listen to and where they should be available
- Fans enjoying music while being able to participate in the success of artists
- Music curators getting compensation for their great taste in music through user-generated playlists, in-platform votes, and sharing content
The Blockchain Revolution is Already Happening
Inmusik is set to reinvent music streaming by creating new revenue streams on a transparent technology. Does it mean that this platform is shooting for the moon and attempting to do the impossible? No — the blockchain revolution has already started, and Inmusik is a product of numerous attempts by true music industry supporters that has been using blockchain to fix the industry’s backends.
Electronic artist Imogen Heap released Tiny Human — the first song that automatically distributes payments to every collaborator involved in the project. Producer and host DJsNeverEndingStory is receiving payouts for his podcast that is worth $.11 per stream, which effectively dwarfs what Spotify gives out, which ranges $0.006 to $0.0084. Early blockchain startups, such as Monegraph, allow artists to register their creative works on the Bitcoin blockchain and set the terms for commercial use of their media.
How is this made possible? The answer: smart contracts
Imagine this: a single playback of a song triggers an agreement between all the creative collaborators involved with anyone who chooses to interact with it — fans, filmmakers, TV, radio, streaming platforms, and so on. In Inmusik, smart contracts brings financial benefit to everyone that is using the platform — composers, labels, distributors, playlist-creation hobbyists, down to the ordinary music lover.
This is just the start of the revolution. With smart contracts, one can imagine a music industry that will allow the following:
- Direct financial support to artists from fans
- Instant access to gigs, concerts, and other similar events
- Online studio and production services
- Merchandising solutions
- Online music education
- Better feedback platform for artists
- Better music discovery and curation
- Incentivized listening and upvoting
- Monetized live streaming
With better awareness about the blockchain technology, and how it can change the music industry, this list of possibilities can go on. By making the music practice transparent, collaborative, and profitable for everyone, artists, labels, and listeners may be seeing the true golden age of the industry for the first time.