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The Future Of Blockchain In The Music Industry

How blockchain will give power back to the creators

25Aug

When music streaming platform Tidal launched in 2015, it made some grand promises around more money going directly to the artists. It was, understandably, met with widespread derision. This was not because people don’t empathize with struggling musicians, rather that the artists who graced the launch with their presence were hardly short of cash. Rihanna, Kanye West, Beyonce, and Madonna, and others on stage had a combined net worth estimated to be some $2.8 billion, so their tales of woe were, for ordinary people, pretty hard to swallow, and the majority have decided against adding to their already bulging pockets.

However, while they may have butchered the message, Tidal’s main objective was not wrong. The musicians on stage represented a minority, the bulk of them are left picking up the crumbs after the record labels and streaming services have had their fill. The digital economy promised much for artists, but this potential has not been realized, with overcomplicated revenue streams actually causing a decrease in remuneration for many. There is, however, another solution, and it’s not Tidal, but blockchain.

Blockchain is notorious as the technology behind Bitcoin. It is a cryptographically secure public ledger of transactions operated by a decentralized peer-to-peer network with no central database of records. The ledger book is secure and complete because all changes are verified by the blockchain community. Nobody can insert, modify, or delete a transaction without affecting the entire chain and knocking the serial number hashes assigned to each block out of sync, which would immediately flag up foul play. Its core benefit is the trust it provides as a result of this - essentially, it offers automated authentication. In areas where once intermediaries would have been required to provide this trust, they are no longer needed, saving companies significant amounts of both time and money.

The World Economic Forum has estimated that more than 25 countries are investing in blockchain technology, filing more than 2,500 patents and investing $1.3 billion. While the financial sector has thus far led the way, others are also exploring applications for blockchain solutions. The music industry, while perhaps not the most obvious place to start, is one that could be transformed by the technology.

Blockchain could benefit the music industry in a number of ways. Firstly, it would allow artists to protect the fruits of their labors from being downloaded for free. MP3s and other formats are currently woefully inadequate when it comes to doing this, and they are easily shared illegally. With blockchain, music is published on a ledger with a unique code and time stamp that cannot be changed. Each record holds metadata containing ownership and rights information. As a result, it cannot be downloaded, copied, modified and shared for free.

One startup already making ground in this area is Dot Blockchain Music Project, which was founded by musician Benji Rogers. He notes on his LinkedIn that, ‘The Dot Blockchain Music Project is the first attempt to use blockchain technology to create a global decentralized database of music rights, wherein a song cannot be separated from its usage rights and still be played. The focus is to develop this new protocol and its supporting online infrastructure with the ultimate goal of facilitating the media industry’s adoption of the format.’ Users can upload music and the associated metadata onto the ledger, and search and play the music of their choice. Smart contracts ensure that the owner of the content gets paid automatically each time its played. The database stores .bc or ‘dotblockchain’ records, which cannot be separated from its rights and is what makes it immutable.

Rogers explains that: ‘I looked at the metadata of some of these albums we were being sent and suddenly I realised that artists don’t have a way to digitally express their rights into anything tangible. And the reason that’s important is: what’s more fundamental to the work itself than who owns it, and how to pay them? … The persistence of information on ownership is going to become really important. The bass player who played on a track that’s sampled 600 times and then played on a platform that makes money – how does that money get back to the bass player?’

At the moment, artists are at the mercy of the record labels and streaming companies, reliant as they are on the audience that comes from their massive user bases and marketing budgets. Some, like Taylor Swift and Radiohead, are big enough to go it alone, but the majority need the infrastructure. Blockchain cuts out there middle men - the accountants, the lawyers, all of them. It means they can be directly compensated with every play of their songs. This can be a boon to all those amateur producers who don’t have the backing of huge record labels. OPUS, for example, is a streaming platform for artists to upload their music that uses blockchain. Artists receive 98% of the revenue, which is huge in comparison to the likes of Spotify and Tidal. OPUS has attracted tremendous support from angel investment, and it has launched an initial coin offering.

Blockchain has not yet reached a level of maturity where it can really be considered a game changer, something even the founder of Berlin-based streaming service Resonate Peter Harris admits. He notes, ‘It's going to take a while before the decentralised technologies are fully developed, but the co-operative model gives us protection against being led down that investor-controlled road.’ The truth is, as beneficial as it sounds, we must exercise caution. If organizations start piling in with no due consideration, they could end up destroying the entire music business. However, when it does take off, artists, songwriters, performers and musicianswill finally have full control over their creations and get what they deserve. As Benji Rogers wrote on Medium last year, ‘If we as stakeholders in this industry are able to create and own the format in which we share our music with the world, then we change our destiny rather than just continuing to be subject to our legacy.’

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