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Blockchain disrupts the music industry and causes it to change its music

June 7, 2020

Blockchain technology can increase financial inclusion and change the lives of many people around the world, especially in emerging markets where it is most needed, While the potential of blockchain technology has been widely recognized even by the harshest critics of Bitcoin (BTC), possible implementations of blockchain technology are often viewed as limited to the financial industry.

While the distributed general ledger system created in conjunction with Bitcoin is a strong example of currency and asset usein which the value can now be digitally transmitted without intermediaries or risk duplication Since the property is unchangeable and verifiable, the same applications can be translated into many other industries beyond the financial sector.

In this case, the music industry, which was often dominated by custodians, is scrutinized.Although the introduction of the internet, followed by streaming platforms like Napster, Soundcloud and now Spotify, has changed this to some extent, Blockchain technology seems to be the next step in giving power back to the makers and their listeners.

Blockchain, streaming and royalty technology

Blockchain disrupts the music industry and causes it to change its musicBlockchain disrupts the music industry and causes it to change its music

How does blockchain change the music industry? One of the most notable, if not most remarkable effects is the ability to remove intermediaries from the music streaming and sales process, While streaming platforms have changed the way music is consumed and made it more accessible to the listener, it has also created a new level of mediation between artists and fans..

The music streaming industry has undoubtedly improved a lot and offers an affordable and easy-to-use alternative to piracy that allows artists to receive royalties for their work., Yet, With this change, the undeniable discrepancy regarding the distribution of royalties has emerged, since for many things the distribution of royalties to artists is similar to a Pareto diagram, in which a very small percentage of the artists are represented, most of the music streams and thus royalties.

These payment differences are due to many factors, including the music genre and the artist’s country of origin, although localized services, like AliMusic from China, can help address these issues at a geographic levelit is likely that The distribution of license fees always remains uneven. A handful of hyperproductive artists dominate most of the market.

Strengthen artists

While the uneven distribution is unlikely to be fully addressed, Improving conditions for emerging artists can make a big difference and lead to a more diverse marketit can help too Change the control that third-party intermediaries currently have, such as: B. Seals and platformsthat have a significant impact on the music that the general public hears.

Blockchain-based music streaming platforms try to address the same problem, For example, Opus uses two different peer-to-peer networks to completely eliminate intermediaries and to provide a completely decentralized transmission platform., Opus It uses the interplanetary file system (IPFS), a P2P network for sharing and storing files, in which network users also act as serversThis virtually eliminates all hosting fees associated with the stream.

Opus also uses the Ethereum network as a form of payment by using smart contracts and allowing artists to be paid directly when buying or streaming a song, which means both the content Since the license fees are distributed independently, the artist can use this system to withhold almost all payments from premium users or advertising revenue from free users.According to Opus, most of the income comes from up to 90%.

Simplification of the music industry

Other platforms like Mediachain, Musiclife, eMusic, and others focus on the same licensing issue and use similar technologies to offer a larger slice of cake to independent artists. They create effectively, but blockchain technology is also becoming a simple and streamlined way for independent artists to deal with other facets of the industry that can often be challenging for future artists, according to an Opus report:

“Given the small scale of operations and the lack of financial independence, smaller artists need a high level of financial and legal training to ensure their own financial stability.”

Ujo, a New York-based company, offers a decentralized music-owned database where artists can not only upload their work and earn 100% of their sales and tips without commissions, but can also automatically split payments with employees on any project, another project from the USA, The Open Music Initiative uses blockchain technology to identify music rights holders and has already caught the eye of companies like Soundcloud, Sony, YouTube, Spotify, and Netflix to show how effective the technology can be.

In a 2017 Harvard Business Review article, Imogen Heap, an English singer-songwriter, record producer, and audio engineer, recalls an incident in which a visual artist had all of his Vimeo videos removed because he had a 30-second delay -Clip out of one of them had used Impogen Heaps songsaccording to her Blockchain technology can help and is already helping to solve these problems, She wrote:

“I personally want to avoid such situations in the future, which means that others can easily obtain licenses and work with my music. A blockchain-enabled form of fees and payments could be the means to do this.”

New source of income for artists

Blockchain is already improving the way artists, especially freelancers, are paid and increasing the profit they can keep while simplifying the copyright process and distributing work.but that doesn’t end there Blockchain technology already enables musicians to tap into another key category for earning income as an independent artist: Highly Engaged Communities

Independent and future artists often get a strong sense of community, which is reflected in a steady stream of financial support from fans. According to Opus, it is a kind of “support for local artists” mentality. , which can explain why Independent labels own 32% of the market share of sales of physical and digital music salesis also known to Concerts and goods make up a large part of sales, but blockchain technology is now offering new opportunities to explore this further.

ANote Music, a Luxembourg-based startup, announced earlier this week that it will launch a blockchain-based platform that will offer artists a new way to access capital by allowing users to invest in music fees. The platform is launched. on June 28 and will also try to enable listeners to benefit from their musical knowledge by buying and trading music royalties on a secondary marketMarzio Schena, co-founder and CEO of ANote Music, told Cointelegraph at the time: “Our goal is to find a hidden value in music for investors and artists by creating a trading platform and for musical investments.”

The aforementioned platform Ujo enables users Sales of digital badges that support the artist and act as “collectibles”who has become one of The most popular apps for non-consumable tokens also allow users to tip their favorite artists, Choon and eMusic, directly. With two other transmission platforms, artists can finance projects through crowdfunding campaignsand thereby creates a new source of income are in the process of recording and marketing a song or a long-term project.

Reward fans

Blockchain-based projects can also create financial incentives for music fans, making the entire experience more interactive and rewarding. although some like platforms eMusic rewards fans with exclusive content and lower pricesother methods are used, For example, Choon offers listeners rewards for choosing custom playlists, and Viberate rewards fans with their native VIB tokens for their contribution to their database of artists, places and events, The Inmusik platform has a similar system that rewards users with Sound Coins ($ OUND) for organizing artist rankings.

While platforms like Viberate already have over 450,000 artists, which is an impressive achievement, the industry giants are also testing new blockchain-based incentive models, especially one of the three leading industry labels. Warner Music Group, according to an article by Forbes, Warner Music has joined an $ 11.2 million investment in a new blockchain network called Flow, contributed by Dapper Labs, Jeff Bronikowski, global leader in music initiative strategies at Apple, and former senior vice president of development , Warner Music company was founded, Cointelegraph previously explained: “The main goal is to find new ways for fans of our artists to explore their fandom and engage with artists in new and different ways than they have never done before.”

The future of blockchain in music

Will blockchain technology help return control and revenue to the artists? It seems that progress has already been made, but there is also plenty of room for growth as artists are attracted to relatively higher profits. The same applies Listeners who can now even enjoy incentives through some of these decentralized platforms.

While these improved incentives for both artists and fans can help drive blockchain use in the music industry, glitches in the past have been instrumental in moving artists to new and improved systems.