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Blockchain Smart Contracts: How the Music Industry Stands to Benefit

blockchain technology blockchain and music music industry

With all the music apps available today, you’d think that musicians are raking in money, hand over fist. But with many parties clamoring for their share, from music labels to producers, managers, and more, and unreliable metadata (which contains info like who the rights holders are) accompanying each track, an artist may not get paid for their work for quite some time – or at all. This is a huge issue, especially for smaller artists who depend on that income as they’re getting started in the industry.

The smart contract component of blockchain technology can potentially solve this issue. Smart contracts can include which percentage of the revenue goes to each member of the band, the music label, the manager, etc., and pay artists immediately.

“Blockchain music has a huge potential to drive hardly needed revenue to artists, especially to independent artists. Transparently, directly and instantly,” says Nick Yap, CEO and founder of Volareo, a company developing a smart speaker to bridge the digital of music and blockchain with the physical presence of a voice-controlled speaker.

Win-Win for Musicians & Listeners

Musicoin is one of a handful of streaming platforms with its own cryptocurrency, $MUSIC. When an artist publishes music on Musicoin, the artist receives compensation on a pay per play basis. Musicoin listeners can listen to ad-free music at no charge, but are encouraged to tip their favorite artist or purchase merchandise and concert tickets with the $MUSIC currency.

Blockchain technology also provides a direct link between artists and their fans. When an artist’s smart contract includes a parameter that pays a percentage of the revenue generated to fans who share their songs, it creates a powerful referral program. Fans can spend their acquired tokens toward merchandise or tickets, or even exchange their tokens for fiat (traditional currency).

100 Years Coming

Musician Imogen Heap is an advocate of blockchain technology in the music world, saying, “We could have a Napster times a thousand if we get it wrong with blockchain. If we don’t come up with solutions, somebody else will, and they won’t be on our terms.”

While artists seem poised to embrace blockchain, it’s not clear whether music labels are ready. Especially when there’s talk of eliminating the middleman.

Unlike previous technology shifts for the music industry that only seemed to benefit companies looking to augment their bottom line, blockchain could be artist-centered from the start. Companies like blockchain startup Ujo Music, which released Heap’s “Tiny Human” in 2015, allow artists to sell music directly to fans via smart contracts; no middleman necessary.

“The music industry hasn’t really redefined itself or changed its business models in 100 years,” Heap says.

Let’s see what the next 100 years holds.

Prep for Blockchain in Your Industry

Blockchain technology holds promise for a variety of industries. Are you prepared? Learn more about what blockchain is and what it’s capable of doing. Pre-order IEEE’s Introduction to Blockchain Technology for your company today and save the date for our Advanced Blockchain for Enterprise Virtual Event, taking place December 4-5, 2018. Designed to provide business cases for disruption across energy, supply chain, IoT and finance industries, these two virtual one-hour sessions will cover advanced blockchain concepts and applications for managers, engineers and leaders.

Resources

Lee, Sherman. (25 Apr 2018). Embracing Blockchain Could Completely Change The Way Artists Sell Music And Interact With Fans. Forbes.

Dredge, Stuart. (24 Jan 2018). What Could Blockchain Do for Music? Medium.

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