Technology has played a significant role in the growth of popular genres of music these last few years. For an industry that is constantly marked with piracy problems, copyright issues, lack of transparency, and fights over fair distribution of profit, tech has come to play significant roles in addressing these problems.
However, the music industry did not initially accept most of the reforms brought in by tech. For instance, the industry disliked the concept of streaming and file-sharing platforms because these services seemed to profit off an artist's creative works. Eventually, various stakeholders in the industry set out to resolve this problem and create a service model that catered to the needs of everyone.
Right now, we are seeing a similar issue occur with the rise of blockchain services. Blockchain isn't necessarily detrimental to the music industry. As a matter of fact, blockchain technology has been leveraged to bring about a healthy relationship between the technology sector and the music industry. And through the power of Blockchain, the industry has seen promising advancements and drawn the attention of investors.
Blockchain technology is the framework that allows digital currencies, like crypto, to function. According to Investopedia, it is a database that collects information electronically stored on a computer system. It is a decentralized technology and distributed ledger that records the provenance of a digital asset.
Through improvements in technology, Blockchain has been modified and used across different industries like art, fashion, music, and entertainment. The most recent use of blockchain technology is seen through cryptocurrencies, Non-Fungible Tokens (NFTs), to mention a few.
Over the years, blockchain technology has shown prowess to the music industry. Undoubtedly, technology has ushered in several benefits to be enjoyed. Some of the numerous advantages of Blockchain to the music industry include:
Blockchain technology has the core feature of being is a decentralized ledger that can validate and register transactions without having a central authority. The database is spread across nodes that make up a network that is publicly accessible to everyone. Put simply; parties can now make peer-to-peer exchanges of data, money, or any valuable thing in a secured manner.
The blockchain network can store metadata of the ownership and rights information more transparently. This will allow the right people to get paid for content use. A feature like this can improve the publishing of artists and the monetization of the music industry. Also, improve the artist's relationships with their fans.
Blockchain technology introduces smart-contract features. These programs allow Blockchain-based cryptocurrencies like Bitcoin and Ethereum to support micropayments. This used to be impossible with classical payments due to transfer costs. Now, there are contractual agreements built on computer protocols that can be automatically executed and allow music royalties to be administered immediately.
One of the benefits of blockchain technology is that it establishes a more direct relationship between creators and consumers. In the music industry, composers and artists will no longer be required to go through purchasing platforms and financial brokers, who usually take a massive cut off the revenue. Now, artists can be compensated directly every time their songs are played or streamed. This will create an avenue for developing artists, creators, and music producers who lack the backing of huge record labels.
Blockchain technology has introduced brand new ways for creatives to earn.
For instance, Non-Fungible Tokens (NFTs) allow artists and other creatives to sell and capture value for their works in unimaginable ways. And recently, lots of artists have been making profits off NFTs. For example, Grimes auctioned about $5.7 million worth of digital art pieces in the space of 20 minutes.
In the same period, 3LAU, an electronic musician, sold $11.5 million worth of NFTs. This shows that blockchain technology has become the music industry's new gold rush.
Another benefit of the blockchain network is its capacity to bring about seamless investment opportunities. In 2020, popular rapper, Logic purchased $6 million worth of Bitcoin. At the time, Bitcoin was valued at $18,000 apiece; right now, it is worth three times more than he bought it. Also, the now-retired rapper reportedly bought a rare first edition Charizard Pokemon card at a live auction for $226,000. This only shows that blockchain technology has given music artists better investment opportunities.
The music industry is usually saddled with mediators and intermediaries, and they usually swindle music artists sometimes. Blockchain technology brings unique chances for a simple system completely rewired in an equitable way for the creators and the consumers. Here, the artists can now keep a majority of their profits when selling their works, and the fans can now freely enjoy their music.
Undoubtedly, blockchain technology comes with some barriers and challenges. To some, blockchain technology will disrupt the structure of the music industry. It may seem that blockchain technology will sideline record labels, streaming platforms, promoters, and other intermediaries, but it is impossible.
Also, blockchain technology makes established artists earn more, as opposed to developing ones. This allows elitism in the industry because people buy the artists, not the art. The playing ground is not leveled as it seems.
As with all solutions, blockchain technology will not be the perfect answer to all the problems confronting the music industry. However, it has brought a lot of benefits that cannot be denied.