Music & Blockchain: What can it actually do for artists, right now?
A practical look at one of this year’s biggest technology buzzwords and the real implications for artists.
About The Author
Matt is former Campaign Manager at JAAK and now Head of Digital at Omnian Music Group, as well as an independent label owner and music producer, described by VICE’s THUMP as “responsible for some pretty huge releases” and “a vital signpost for new talent” by Clash Magazine 🎧.
Blockcoin Cryptochain
If you’ve been at a music industry conference this year, follow thought leaders on social media, or keep up to date with the many music and technology blogs and press outlets, it’s likely that you will have come across a combination of the words blockchain and cryptocurrency.
In fact, many blogs on the topic start off in a similar fashion to this one, humorously referencing the unavoidable hype around a technology that, at face value, few truly understand but many want to discuss.
At the same time, more than ever before, artists are becoming increasingly informed, involved and influential in the more administrative areas of the business. If you’re an artist trying to wrap your head around what cryptographically secured peer2peer networks and decentralised digital currencies can do for you and your career, research materials can feel fairly limited (and full of jargon like cryptographically secured peer2peer networks and decentralised digital currencies 😐).
Sifting through all of the information, it’s difficult to know what blockchain can realistically do to improve the music industry for artists, what’s achievable right now and what we can hope for in the future.
At JAAK, we regularly get approached by artists interested to know more, find out what all the fuss is about and see how they can get involved today. So, I decided to write this blog in attempt to make sense of the situation.
Now, before you get stuck in to the post, I just want to state something:
This blog is not going to teach you how blockchain works.
That’s not to say you shouldn’t do some extra homework on the tech, but for the purpose of this blog I want to focus on what you can practically do with blockchain, or what it can do for you. If you do have a more technical interest, you should check out Luke’s introductory blog series on dapp development, ‘Crossing Over to Web3’.
Music Consumption
One of the more commonly presented use cases for music industry adoption of blockchain technology is disrupting how we deliver music to consumers.
Direct-to-fan models, made uber-famous by Radiohead’s pay-what-you-want ‘In Rainbows’ release are, of course, a beacon of musical independence and there have been projects exploring how blockchain can play a role in them.
The general idea here is that the audio file(s) are stored across a decentralised network (think along the lines of BitTorrent, the file is split into many pieces and stored in different places), your fans pay in a cryptocurrency and are then able to download the files directly, removing any need for a third party in the middle.
In theory the benefit to this is full transparency for the artist on music sales and a faster turnaround on receiving payment, however a key issue (right now) is the amount of effort a fan has to go through in order to buy the release. Fans will first need to buy the required cryptocurrency via a digital currency exchange and in some cases install a chrome browser extension, such as Metamask or Parity, to actually interact with the blockchain.
Building on this idea, blockchain initiatives also have their eyes firmly set on the world of music streaming. There are a variety of emerging services that offer artists the ability to directly push their content onto a new streaming platform and in return can offer new remuneration models.
On the consumer side, these models can range from stream-to-own (where you pay per play until you’ve covered the costs and then the track is yours forever) to paying for streams using a unique and purpose-built music cryptocurrency. Regardless of model, the creation of such services come with common objectives: transparency in sales, the removal of middlemen and superior rates than the existing industry standards.
On the other hand, when circumnavigating the major digital service providers, the sales and/or streams are unlikely to be chart eligible for awhile and the new services live outside the small circle of mainstream music consumption.
As an artist, this raises some important questions.
Should this be an exclusive distribution route and do you want to be directing fans away from these core services? Does having your music available to download from a niche service benefit your fans, when a majority of consumers value access to music over ownership and use just one service? Does an increase in royalty share justify a decrease in discovery or quality of fan experience?
As current services battle to make music easier to find, consume and pay for, blockchain based services face additional challenges. That being said, if these ideas can prove value then we could start to see mainstream adoption.
Artist Coins
A recent trend coming to light is artists creating their very own coin/cryptocurrency/token as an offering to fans, essentially the blockchain answer to ‘Bowie Bonds’.
The logic behind launching an artist coin is similar to the crowdfunding models most musicians are already familiar with. Fans have an opportunity to purchase the coin and, in theory, finance the creation of more music by supporting the artist. The coins could then be used to create new interactions between artist and fan, forming new communities that are rewarded for their support.
Assuming the community and demand around the coin increases, so could the value. Fans can then trade the coins and convert their gains into other currencies when they choose to. Artists can of course also hold the coins themselves and benefit from the increase in value in the same way.
Artists should be aware, however, that making your own coin is not without it’s own risks, including potential legal ramifications. The world of cryptocurrency is still very young and the government agencies of the world are still deciding how they plan to regulate them. We’re already seeing legal action against organisations in other industries for offering coins and the Chairman of the SEC (U.S. Securities and Exchange Commission) has expressed in a statement that coins marketed as investment opportunities will fall into their jurisdiction. Bowie Bonds were, after all, a security.
Live Music
There are a few pressing issues in the live music industry that blockchain technology could hold the potential to solve.
The black market of buying event tickets in bulk and reselling them for a profit that promoters and/or artists see no share of is unfortunately thriving. As such, there are a few companies looking into using blockchain to attribute a ticket purchase to the original purchaser. In the same way that the Bitcoin blockchain documents every transfer of Bitcoin, these services can track a ticket’s journey as it exchanges hands, allowing for increased control of dispensed tickets and protection against forgery.
Though several new startups have sprung up to try and tackle this problem, adoption could take quite a while as many venues are owned/managed by the existing ticketing companies. We’ll need to see collaboration between the two before any real change can happen.
On the other end of the live music process, artist booking platforms are also emerging in the blockchain space. These platforms offer artists the ability to securely interact directly with promoters, without the need for a booking agent in the middle, and be paid via cryptocurrency.
This raises similar problems to the blockchain direct-to-fan models in that there is a dependency on a promoter to have the knowledge and willingness to use cryptocurrency in order to pay the artist. This can add more friction to the booking process than it removes.
Music Rights
It would be fair to say that some of the biggest problems to plague the music industry today are centered around music rights information and the accuracy of data.
As an artist, getting paid for the use of your music is dependent on those at the other end knowing exactly who to pay, which sounds logical but can be complex.
The industry currently works in a system in which each organisation stores their own version of rights information in their own database, duplicating the files and transferring them to others when necessary.
This duplication of data can lead to discrepancies, lots of the data is missing or in another unconnected location, which can lead to an inability to correctly pay royalties.
Blockchain can offer a unique solution to this issue. By creating decentralised networks that connect said databases, rights information can be synchronised, tracked and efficiently shared without requiring duplication. When needing to know who should be paid for usage of music, access to the network could give the best possible view of all available information and it’s history.
At JAAK we’re piloting the META Network to incentivise an industry wide move in this direction. The end state could allow for artists to directly contribute their own information, taking ownership of their digital identities and data.
Digital identities are a popular discussion in the blockchain space and in the context of a network that’s connecting music rights information, knowing who is inputing the data, and whether or not to trust them, is crucial to improving accuracy. With this in mind, we began building META ID.
When registering with META ID, an artist is able to aggregate their existing identities (real name, Spotify, Facebook, ISNI, IPI etc) to prove who they are and support the authenticity of the information they contribute to the network, e.g “I wrote this song”, which are referred to as claims.
Once the META Network is up and running, META IDs store a history of all of the claims made and a reputation forms based on the accuracy of the information they have provided. This reputation can then be considered when assessing future claims.
Imagine an Uber rating or Reddit karma, based upon the quality of the data you push into the network, combined with Twitter Verified, so the network knows it can trust you. For a more in-depth explanation, check out Dan Fowler’s recent blog on AVOCs.
The potential of the META ID doesn’t end there either. In theory, with this level of verification, a META ID could be used across all systems in the music industry, meaning as an artist you can instantly log in to streaming platforms, collection societies, distributor dashboards, social networks and more, with a single ID.
To Conclude
Blockchain technology is still in it’s infancy, think the World Wide Web in ’93, and nobody really knows how this technology is going to play out.
The question is, what can blockchain actually do for artists, right now? My suggestions are the following:
1. Research cryptocurrency, get accustomed to the variety of tokens and their values.
2. Experiment with applications that are integrating blockchain in ways that feel familiar (why not buy a Cryptokitty?)
3. Sign up to our newsletter to be the first to know about the launch of META ID next year.
Revenue potential from the aforementioned projects is likely to remain supplementary for awhile and there’s still a long way to go in terms of consumer adoption. That being said, lots of smart minds are working on furthering this technology and the future is very exciting.
There are many great music blockchain projects out there that are keen to talk to the artists their work will effect. If you’d like to speak to us about what we’re building at JAAK, we’d love to hear from you.
