How Bitfury Surround Will Help Musicians Get Paid Fairly — and Quickly

Guest post from Derek Beres, co-founder of EarthRise SoundSystem

The Bitfury Group
Nov 5 · 4 min read

More than a decade ago, the digital music revolution was poised to level the playing field for artists. Instead, accountability and transparency in the music industry appear to be even scarcer than ever. In spite of incredible technological advances, middlemen remain wedged between musicians and fans. Some of these intermediaries, like record labels and collection societies, have proven important over the last century, but too often they’ve overstepped their boundaries — and they have yet to be seriously challenged.

The main functions of record labels are accounting, distribution, and marketing (along with recording and tour support as needed), and collection societies exist to track down and distribute royalties. In the early 2000s, however, streaming platforms revolutionized the entire model of music distribution. This should have been a good thing. Instead, what could have been a straightforward accounting and tracking system turned into a tangled web of intentional confusion. For example, consider the black box royalty problem, which keeps an estimated $2.5 billion out of artists’ pockets. This phenomenon is premised on a complete lack of imagination by the very entities that are supposed to look out for the best interest of musicians.

Even small labels run into these issues. As one half of the production duo, EarthRise SoundSystem, I’ve experienced this firsthand. Our prior label had one accountant handling multiple facets of the business. Royalty payments maybe arrived twice a year. By the end of our deal, an annual check was the norm.

For digital distribution we use the Orchard, Sony Music’s distribution and licensing arm. While the analytics are better, the data I’m privy to is still limited. I receive a play count from Spotify with no location information; I don’t even get that much from Apple Music. What’s worse, our data is updated only once a week, while checks are cut quarterly.

This lack of data management is a tragedy in the digital world. It’s not a question of capability, as it is possible to download data sets in the billions from Google. While anonymized, such information provides important analytics to those savvy enough to do the research. With streaming services, we can’t even analyze the data we produce.

It is unbelievable that in 2019 I can produce a song from start to finish on my phone, but I cannot use that same piece of technology to track where and how often that song is played, or get properly compensated when it is played. It is easy enough to geolocate streams, but Spotify would rather sell this data than provide it to the artists who created it.

It is important to mention that streaming services like Spotify have great utility. Our music has reached ears it likely never would have thanks to Spotify’s AI-powered discovery process. As a fan, the ability to find new music and browse old catalogs is amazing. But again, the middlemen in the system earn most of the wealth from these platforms while releasing very little value — money and data — to artists. Given the pro-rata model on which payments are based, the opportunity to earn fair income is even more limited for independent artists. Artists should have more control over their data and get paid properly (and quickly) for their creations. Blockchain will enable this to happen.

While the music tech industry has been quick to offer an endless array of creative products, it has been much slower to provide backend services. Creative thinkers generally loathe administrative work. Passing off accounting to management or labels seems to make sense. But that’s, in part, how we’ve ended up where we are, and why companies are not as fast to provide new tools that make bureaucratic work easier to navigate. A user-friendly, blockchain-based backend that tracks each stream and manages payments on a daily basis is one of the many essential services Bitfury’s Surround™ platform will provide. Musicians will be empowered with real-time data that they can use to better understand where their fans are and how they consume their songs. Such insights will help inform them how their music is performing and what songs most impact their fans.

One of the most important facets of blockchain for creative individuals is automatic payments distribution. In Bitfury’s Surround ecosystem, instead of waiting three months to be paid, I will receive my royalties every 24 hours. At the moment, my production partner distributes this revenue to our partners. Using blockchain, this process will now be completed via a smart contract. For example, if we feature two guest artists and each gets 10 percent of the revenue, splitting the royalties between us will only take a few clicks.

Every 24 hours, each of our wallets will receive a deposit according to the percentage written into the smart contract. This applies not only to musicians, but songwriters, record labels, collection agencies, management — anyone who is eligible to receive funds.

Music, like all art, is not a static project undertaken by individuals. Rather, it plays an essential role in the social and emotional fabric of cultures. At its best, music is a dialogue, which is why we deserve access to the data that tracks that dialogue — and why we need to stop waiting months to be paid for the value we create today.

Meet Bitfury

Learn more about Bitfury, the leading full-service blockchain technology company.

The Bitfury Group

Written by

The Bitfury Group is the leading full-service blockchain technology company.

Meet Bitfury

Learn more about Bitfury, the leading full-service blockchain technology company.

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