Startups specializing in blockchain may have their eye on disrupting the $15 billion music industry.
According to Forbes, the music industry stands to benefit greatly from the use of blockchain technology.
In many cases, musicians have to go through deals with several intermediaries, such as record labels, publishers and distributors, in order to make their music available to the masses. This process can result in the loss of up to 86 percent of the proceeds they would gain from their music.
These inefficient intermediaries leave the industry in a position where it is ripe for disruption. The mainstream channels for music distribution in the industry face two major challenges: payments and accessibility.
One of the startups looking to change this is Ujo Music, whose manifesto states:
“Shouldn’t it be possible in a digital world for the royalties to come directly to you, instead of through a slow, inefficient and opaque chain of collection societies and publishing administrators?”
The company has built a blockchain-based platform that enables artists to own their creative content and be paid directly by listeners for the music they share. The startup recently collaborated with an artist that allowed a wallet to be set up on the Ethereum blockchain, where users could send digital currency to be issued a license for an MP3 file, while simultaneously paying out the artist.
Ujo Music also plans to address the difficulties that artists face when they use direct channels to distribute their music, which can cause them to lose insight into who is licensing their music and how it’s being used, Forbes explained.
With the release of its closed beta at the end of this year, Ujo Music’s system will bring together the transparent nature of a blockchain with smart contract technology.
Blockchain startup PeerTracks has a solution that allows artists to interact with their fanbase by acting similarly to a digital service provider. The startup allows users to stream and download music, but only has a 5 percent fee compared to Apple’s 30 percent fee.
Through PeerTracks, artists can sell “Notes” — multifaceted value assigned to each artist — that can be bought and sold as tokens on the blockchain. The value of these Notes can increase as the artist’s music is downloaded or streamed.