How Blockchain is Disrupting the Music Business
So streaming music is great, right? You pay a fixed monthly subscription and get unlimited music, anywhere. Then the money goes to support your favourite artists. It all sounds great — until you look closer at the numbers.
The artist does receive a certain amount of money per play — roughly $0.006 to $0.0084. But then this small amount is split between the producer, musicians, vocalists, record label etc. Then add the complicated task of tracking who gets paid what. The reality is that sometimes incorrect metadata is keeping track of whether a artist gets paid or not.
So it all comes down to volume for the artist, the more plays you get the more you make — with Drake, for example, making somewhere close to $15 million in 2015 (being the most played artist that year). This puts smaller artists in an even tougher spot — even if they have a loyal following. The natural conclusion is to play more live gigs, sell more merch and focus on digital downloads.
“The reality is that sometimes incorrect metadata is keeping track of whether a artist gets paid or not.”
But what if there was another solution? This is where blockchain technology comes in. The complicated tasks of the middlemen can be automated with smart contracts, instantly splitting and paying royalties to the artist who created the tracks. Creators copyrights can be protected — and best of all producers and record labels can be bypassed with music being sold directly to fans.
A great example is Björk, one of the first major artists to have integrated blockchain into one of her releases. Fans can purchase her new album with popular digital currencies like Bitcoin or Ethereum and will be able to collect crypto rewards in the form of “audio coins” when engaging in social media interactions. These rewards can then be spent to buy merch or sold for fiat.
“The biggest hurdle for the fans might be the relative unknown factor of blockchain itself.”
Blockchain applications for music are in their early days and still have to prove themselves. To gain traction, it will take more than just the musicians to get on board. The biggest hurdle for the fans might be the relative unknown factor of blockchain itself.
So let’s explore a couple of the projects in the space that we’re excited about. Each one is trying to make the big artists richer while rewarding smaller artists with some much needed extra income. And both of these projects could begin to change the way the whole music industry works.
So let’s have a look.
Ujo
By far the most promising project is Ujo, with four main components: File Storage for content, Licensing + Payments using Ethereum, Identity with uPort and Constellate to collect metadata. Importantly Ujo is focusing on the infrastructure for the whole creative industry — not just a decentralised spotify. Though, that’s a good place to start.
Musicoin
In a nutshell, Musicoin is the decentralised Spotify, offering listeners an ad-free experience and musicians 100% of the revenue from their streams. Musicoin gives artists better revenue opportunities while encouraging listeners to ‘tip’ their favourite artists — or purchase tickets and merchandise with their native $MUSIC currency.
