How Is Blockchain Technology Revolutionising the Music Industry?

In the past, music artists could only showcase their talent by performing live in front of local audiences. But, with the advent of music recording, they started gaining appreciation as well as revenue through the sale of physical recorded music, such as vinyl records, CDs, cassette tapes, etc. Today, online streaming platforms like YouTube and iTunes, along with social media platforms like Instagram, allow artists to show their art and connect with global audiences.

Despite these advancements, the music industry continues to face challenges such as unequal revenue distribution and an extreme reliance on record labels and streaming platforms, to name a few. However, as the music industry has shown time and again, artists have always found some way to adapt and overcome their issues.

Now, blockchain technology is emerging as a game-changer, addressing the challenges currently artists have been facing. With decentralised platforms, smart contracts, and NFTs, musicians can regain control over their work and earnings. Let’s explore how blockchain is driving this revolution. But first, understand the shortcomings in the music industry in detail.

Common Issues In The Music Industry

Modern platforms have helped music artists expand their reach and maximise the spectrum of fame and recognition. Still, the traditional issues have found their way into the new infrastructure of the music industry. These include high operational costs and administrative fees, lack of transparency, and much more, as mentioned below:

• Copyright issues have been a major issue for music artists for years, due to the absence of a global database for copyright and neighbouring rights.
• Due to the many middlemen involved in record labels, radio companies, and streaming services, they fetch a lot from the royalties earned by the musicians.
• The music industry is managed by the centralised music streaming services that follow algorithmic bias, supporting certain artists or tracks and ignoring others.
• Businesses earn millions from the music created by the artists and still offer them minimal pay-outs of actually what their music has earned.

Blockchain Technology Addressing Problems In The Music Industry

Blockchain is a decentralised technology that records information within blocks, which are cryptographically linked to form a chain. It’s also known as a distributed ledger technology. The added blocks that make chains once attached are practically impossible to modify or remove. That’s why the data shared across a network of computers in the blockchain network is not in the control of a single entity and is immutable and resistant to tampering. Its decentralised approach enhances security, transparency, and trust, making blockchain a reliable solution for diverse industries, especially music.

Blockchain has the potential to address all of the challenges that the music industry has faced throughout history. Here’s how it is transforming the rhythm:

Transparency in music copyrights

Blockchain technology can provide artists with full transparency in managing their music ownership rights and intellectual property. They can authorise and oversee their music copyrights while storing detailed information about these rights on a comprehensive peer-to-peer database. With the help of smart contracts, anyone can verify the legitimacy of content rights and limit the unauthorised use or distribution of music.

Decentralised Royalty Programs

Dishonest royalty distribution is the major problem facing musicians in the music industry. Moreover, due to multiple intermediaries involved in revenue distribution, artists do not actually get what they earn. Major streaming platforms, music labels, and other distributors of the music industry retain most portion of the royalties, leaving artists with nothing. Further, royalty distribution is even more vulnerable to human errors and inefficiency.

With blockchain technology, artists can use smart contracts and create immutable public records of royalty data so that each transaction is carried out accurately and transparently. Now, the complete process is automated through smart contract development and doesn’t require intermediaries. Artists can alone run their royalty programs and get complete value for the work actually their fans are paying.

Instant micro-payments

The involvement of numerous intermediaries not only creates unfairness and potential errors but also prolongs the overall process. After artists create music and release it for their fans, it takes a considerable amount of time for music labels or platforms to process payments and distribute royalties. Smart contracts, on the other hand, enable automated and direct payments without the need for intermediaries to postpone or withhold any portion of the payment.

Music Tokenization

Blockchain allows music artists to tokenize their music as non-fungible tokens. Artists can use these unique tokens to denote ownership or access rights to their work and put it out for selling.
Anyone interested in their work can purchase these tokens and gain token benefits such as early access to new releases, voting rights, etc. It would help artists directly sell their work and build a community of loyal fans.

NFT Tickets

NFTs can also be used to tokenize tickets for music concerts and live shows. Currently, these tickets are quite prone to fraud, duplication, scalping, and even being repurchased and resold multiple times. These forgeries even cause unfair pricing and financial loss for both artists and fans. Even though a number of big platforms employed very strong verification, they were still unable to resolve this problem.

However, NFTs can revolutionise ticketing by creating unique and verifiable digital tickets that can’t be altered or duplicated. This approach can effectively address forgeries, ensure authenticity, and prevent counterfeiting. Additionally, artists and event planners can control secondary market transactions by using smart contracts to prevent reselling.

Build artist-fan relationships

Blockchain development opens revenue sources for independent musicians. The artists can directly share their music with their fans and they can easily connect with them, which leads to the building of direct seller-consumer relationships. Every artist gets equal exposure to be found by its audience and gets fair exposure instead of being pushed by an algorithm.

Wrapping Up

Due to the distributed ledger technology, there wouldn’t be any disputes related to unfair revenue distribution, copyright infringement, and ticket fraud in the music industry. Blockchain technology can provide an innovative platform for musicians to share their music directly with their audience, removing the need for traditional intermediaries like record labels and streaming platforms.

Moreover, this innovative technology can ensure transparency, security, and automation through smart contracts, improving the experience for musicians and fans.
Although it might seem like talk of a far future for many, there have been few cases of blockchain adoption recently. Several blockchain development companies, like Webcom Systems, are already exploring various applications of blockchain in the music industry. Whether it’s automating revenue distribution, enhancing copyright protection, or some other innovative service, our team of multi-disciplinary software experts can assist you with everything. Get in touch to discover how blockchain can revolutionize your music business.