How crypto technology is changing the music industry
Cryptocurrency and the technology it uses, known as blockchain, is uniquely positioned to enhance and improve various aspects of the music industry. It opens up a range of possibilities, from giving a clear, transparent record of artists’ ownership rights to providing artists with new ways to engage with fans.
From intermediaries to artists
Ownership rights and royalties continue to be a problem for musicians, with an estimated 50% of royalties owed to artists never paid out by streaming platforms.
Grammy award-winner Imogen Heap recently explained that every time a musician wants to get paid the information is inaccessible. “Where is it, and how do we know it’s true or correct? We have no way of checking,” she says. “When a payment is made, they [royalties company] have their own data set and invariably it doesn’t match up with anyone else’s. So along the way, about 50% of all royalties just get lost or go to the wrong people.”
Heap says it is in the interest of artists to fight for an open platform where this information is easily accessible, and end the fragmentation of musical ownership across a number of organisations. Blockchain technology may just be this platform.
How would this work?
Working with blockchain-based platform UjoMusic, Imogen Heap released her song “Tiny Human” along with its licensing details.
On UjoMusic, fans could download the song in exchange for Ether, the native currency of the Ethereum network, for commercial or non-commercial use. In other words, for private listening or for use in, say, a commercial. Smart contract technology then triggers the payment automatically, enabling all musicians involved in the song’s creation to be paid immediatelyt.
Building on this with other artists and research institutions, Heap then went on to set up the creative passport, a verified digital ID for music makers that enables them to access, update and manage information about themselves and share it with others.
The ultimate goal for the project is to become a self-sovereign (not associated or beholden to any other third parties) identity.
How do blockchain platforms differ from traditional music streaming platforms?
It’s all about the level of control that artist’s have over their work. Before blockchain was an option, artists were beholden to intermediaries such as record labels and streaming services. As such, innovation was focussed on getting music into the hands of consumers in the fastest, most convenient way possible, regardless of the difficulties caused to musicians and others in the supply chain.
The transparent and immutable nature of blockchain technology gives musicians and other artists back ownership of this innovation, re-establishing the way their music is produced, bought, sold, consumed, and managed, all in a fair and clear way.
6 influential artists advocating blockchain technology:
Artists are also looking to non-fungible tokens (NFTs) for additional income.
NFTs can help artists build their community and create more curated content. Artists like Snoop Dogg, 3LAU, and Nas are some of the leading supporters of using tokens to release music and provide additional benefits to fans, including a cut of streaming royalties to people who buy their NFTs.
Justin Blau, CEO of music licensing platform Royal, says that NFTs are a powerful tool as they can help authenticate different types of assets. Once these tokens exist on a blockchain, they can provide invaluable insights into the fans that own them, and allow artists to communicate with them directly without the need for an intermediary.
From royalties to engagement, cryptocurrency and blockchains are creating new ways to expand and transform the music industry for the betterment of fans and artists. Blockchain technology is promising to return power to the creators.