Blockchain Comes Into the Music World

The advent of the internet in 1999 has drastically changed the mode of music production, distribution and consumption all over the world. Disruptive technology such as the internet, mp3 file format, and so on have reigned supreme for the last decade in the music industry.

Record labels have tried frantically to leapfrog competition in a saturated market with new entrants popping up daily. Now, blockchain is the latest of such disruptive technology with promise to tackle the problem of declining revenue plaguing major stakeholders in the music industry.

The Status Quo
The use of the internet was preached as the salvation for the industry at the very beginning. But then came new business models like the Internet-based subscription services of Spotify and Tidal.
Initially, Spotify presented itself as the solution to remuneration issues in the industry, especially since its revenue grew to over seven hundred million euros in 2013.

Subscription services looked auspicious enough for iTunes, once the major digital distributor, to adopt the approach. However, the major issue with paid subscription services are loop holes in the payment channel for the artists and other royalty holders, and the uncontrolled distribution of music on the internet. Spotify and iTunes allow content creators to release their content on their platform through intermediaries.

These intermediaries often find it difficult to pay royalty back to the artist. The major labels have been trying out innovative marketing strategies to maintain physical sales. Nonetheless, online distribution has been relatively successful, since consumers are offered convenience and free music on the internet. In 2013, a major player in the industry indicated that established players in the market occasionally have incentives to drastically change approach.

For example, iTunes executed their distribution through lucrative partnerships, while SoundCloud and Spotify are more customer-inclined in their approach. The latter attract users with low prices and a wide variety of contents. Distribution platforms generally pay artists royalty rates considerably lower than they can pay. This has led to artists self-releasing music which in turn pressures their labels to lose income from artists signing.

When the internet got up, some major record label failed to recognize it as disruptive which led to their revenue failings. This has been a recurring theme for many industries other than the music industry. The ability of stakeholders to recognize the opportunities and how to adopt is a hallmark of long-standing business enterprises. Kodak failed with digital cameras and Xerox lost photo-scanning, similarly, the blockchain technology might prove to be disruptive.

Blockchain and Music

The blockchain, a de-centralised, public ledger is used with digital currencies/cryptocurrencies such as BTC, Ether, LiteCoin, etc. Blockchain keeps a record of all transactions involving the cryptocurrencies on the crypto exchange platforms. Beside this, it could be used to re-align the established systems for rights and royalties in the music industry.

In a recent conference of Blockchain experts, it was stated that blockchain ties into the music industry in executing micro transactions and charges. From paid streaming to a couple of dollars download, Blockchain could fit in the gap and simultaneously execute payment as service is rendered.

Nowadays, there are companies that have already re-imagined the music industry business model with the blockchain. UJO Music, particularly, is using the blockchain to control royalties and manage the product rights. They have incorporated smart contracts into online streaming, such that the payments are made instantly. This cuts the long process used for remuneration on major platforms.

Basically, blockchain credits the right holders instantly in their accounts. Indeed, the same principle could be applied in other areas of the industry and even outside the music industry.
The blockchain presents a whole novel system of operations for Credit Systems and Royalties within the music industry.

The use of blockchain within the industry has been slow due to the legislations, or lack of one in many countries that fail to recognize it. In addition, many banks across the world do not recognize it as a legal tender.

One of the major arguments against blockchain is the negative impact it might have on the major industry leaders. True, consumers would shift from the established platforms to use the transparent and fair platform blockchain provides. But adopting this technology by the industry giants could provide them with competitive edge over others.

An artist, Imogen Heap, believes artists would have better incentives to release music if they got royalties every time their song is played. This statement bears proof to the potential of blockchain to revolutionize the music industry. If the major labels do not adopt the system, it could render the existing rights system obsolete in some years. As once said, innovation must be given a free rein to realize its potential, even if it will kill the establishment.

Experts believe that a common output standard for all blockchain technology in music is necessary for an efficient system. Further researches are needed to investigate the use of a decentralized database for the industry rights allocation, but the signs have been promising.

An industry report
affirms that the current lack of transparency only favours the middlemen, the creators, artists and consumers are continually shortchanged. With blockchain, accurate records of every activity including downloads are tracked on the internet. Artists who prefer BTC can track coin market movement using free bitcoin telegram signals; this again proves the extent of transparency.

The prevailing belief is that the industry leader must embrace blockchain technology to stay relevant and serve stakeholders better. A simple and transparent tech like the blockchain technology benefits everyone in the industry. It could restore consumer faith in these companies, and profits might just climb again.


While disruptive technology might have a negative effect on the market stability, innovation must be allowed to run its course. Blockchain brings with it new ideas and revenue sources with huge potential for everyone in the industry.

On the other hand, those old enough to remember the rave about on ‘email’ may have some déjà vu. The electronic mail was also widely reported to be a savior of many industries, including music from the oligarchs.
Hence, a little scepticism might be allowed when a new tech like Blockchain is called a saviour of the music industry, undermining the control of multi-billion-dollar establishments.


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