Over the past year, there have been many discussions about how blockchain technology could revolutionize certain aspects of the music industry. While some are looking to move full force with it, others are skeptical and await more testing.
As recently as this April, music streaming giant Spotify announced its acquisition of blockchain startup Mediachain. Just last year, Spotify was in the middle of a licensing problem with the National Publishers Association over unpaid royalties and cited lack of necessary data. After the resolution of this dispute, Spotfiy paid out just over $20 million to publishers and an additional $5 million penalty. Through this newly acquired part of its business, Spotify is hoping to solve the attribution issue that often arises with online music streaming.
Through file sharing and streaming services’ many advances over the years, the music industry has entered a conundrum in terms of how to sustain itself. With the various moving parts in the music industry, and some still relying on outdated technology, it can be difficult to ascertain just how each part interconnects and evolves in tandem.
At the crux of it all is attribution to the right parties involved, which is where smart contracts via blockchain technology come into play. Smart contracts are digitalized versions of traditional contracts through which blockchain technology enables automatic processing once all conditions are satisfied. Like blockchain technology, smart contracts do not rely on third parties or vendors and their terms cannot be changed. By removing the middlemen handling finances in the music business, musicians and their managers can get paid at a more rapid — and potentially more fair— rate.
One company looking to help move the ball for swifter payments for musicians is Revelator, which raised $2.5 million last fall to accelerate its efforts. Through the use of blockchain technology, Revelator is able to better track digital assets. Rather than waiting months to receive royalty payments, musicians see a more instantaneous course of payment.
Revelator’s CEO, Bruno Guez, shared his thoughts on the technology and what his company is doing to help move the ball. He said, “The blockchain technology does provide a truly disruptive technology for the music industry. It’s not the only thing that matters and it won’t solve all the problems in the industry, but I do believe our current offering introduces new features for music.”
Musical artist Imogen Heap was the first to experiment with blockchain technology to help distribute her music to the public this past year. By working with Ujo Music, Heap’s music was released through an Ethereum blockchain. Users created wallets on Ujo Music’s platform and sent Ether payments to a smart contract, which would open up a license to listen to the music.
Heap has written extensively about utilizing blockchain technology and the benefits it brings to the music industry. Regarding the use of smart contracts, she said, “Using smart contracts — essentially templates for setting terms of service and usage for fans, distributors, sponsors, and licensees and templates for directly and immediately distributing revenues to contributors, collaborators, and promoters of the work — artists would decide who could interact with their work, how, and how much each type of interaction would be worth with a lot less paperwork.”
Through integrating blockchain technology into the music sphere, artists are able to receive the correct financial attribution without middlemen dipping their hands into the pot for themselves.