Co-written by Amy Berryhill.
Since the early days of the music industry, artists have struggled to get their fair share of royalties from the purchase of their music. With overhead from publishers, record labels, streaming services, and so forth, artists struggle to maintain direct relationships with their finances. All of this overhead is crippling for artists’ incomes. As Jonathan Chester, contributor at Forbes, notes “artists lose up to 86% of the proceeds from their music.” With all the dramatic shifts that have taken place in the music industry, revenues are currently unsteady – and artists are taking the brunt of it all – but blockchain may fix that.
What is blockchain?
Blockchain is complex but riveting topic that needs a pretty lengthy introduction to fully comprehend. Check out this video for a brief description on what exactly it entails:
Ben Dickson, in an article for Techcrunch, describes Blockchain as a “distributed ledger that can validate and register transactions without the need for a central authority” that is “virtually irreversible and tamper proof.” Essentially, blockchain allows for peer-to-peer direct transactions with no overhead. Further, because blockchain data is secure and unalterable, metadata that directly corresponds with artist information cannot be removed. This means no one can attempt to take credit or royalties from the artist by altering the metadata, and the payment will not be interfered with.
This technology breakthrough is changing the security of the modern world as we know it, and the music industry is no exception. So, how exactly will the industry be affected? And what does this mean for the music business model? Let’s discuss.
Blockchain is revolutionary for the peer-to-peer payment system. Not only does the money from record and album sales go directly to the artist, but it gets to them much faster than through the current system. As Dickson points out in another article, whatever is left of sales revenues takes anywhere from 6 to 18 months to get to artists. In the modern digital world, this is an outrageous time-frame to wait to get paid. Payment for artists has not kept up with the breakneck pace of the digital music industry – it has only lagged behind. With the breakthrough of the high-speed Blockchain revolution, artists will reap monetary benefits much sooner than before.
The fate of the middle men
Even if artists adopt blockchain-based methods for distribution and payment, record labels will still be able to benefit. In Dickson’s Venture Beat article, he talked with Imogen Heap, Grammy-winning British singer-songwriter, who was positive that the middle men would not be left in the dust – so long as they were open to change. “There is an ever-greater need for curation and marketing… [and] at some stage, artists will invariably need to work with these and other parties.” Although blockchain is enhancing security within the business model, it does not at all increase marketing or creation of the actual music, so record labels and other industry “middlemen” still play a prominent role in the process.
Blockchain is still a developing technology system, but it is no doubt a cutting edge system that is continuously showing signs of progress. Although no concrete predictions about its direct effects can be made, we can infer that this new technology network will not only tighten security and prevent fraud, but economically improve the music industry.
Image courtesy of David Stankiewicz