Blockchain technology is changing the way we know the music industry, shifting the power from intermediaries and handing it over to artists.
Blockchain technology has the power to grow financial inclusion and transform lives, especially in emerging economies. Although the potential of the blockchain is widely recognized, even by the harshest critics of Bitcoin (BTC), the use cases are pretty limited.
The most notable application of a decentralized ledger system, which was created alongside the first cryptocurrency, Bitcoin, is in the finance niche, where value is transferred directly without involving third parties. Other areas, especially music, have been lagging as gatekeepers take charge.
Although the streaming platforms, such as Spotify and Napster, have helped to change the narrative to some extent, it is the blockchain that appears more effective in restoring power back to creators and listeners.
Decentralized Ledgers, Streaming, and Royalties
Decentralized blockchain is helping to change the music industry by removing the middlemen from the whole process of streaming and sale. Although streaming helped to increase access to music, it created a new level of intermediation between fans and artists.
It is true that streaming was more cost-effective than the prior methods, but it ushered in the huge outcry from artists about the royalty payment. Most artists receive very little compared to the streaming companies. The payment discrepancy comes from a number of factors, ranging from music genre to country of origin.
Localized services, such as China’s AliMusic, might come in handy to help address a few issues on a geographical level. However, the challenge of loyalties is likely to remain.
Empowering Artists and Simplifying the Industry
While it is unlikely that the issue of skewed distribution will be addressed comprehensively, improving the emerging market conditions can help make a great difference. Blockchain-based music streaming platforms are designed to help tackle every challenge.
One example is Opus, which leverages two peer-to-peer networks to help remove middlemen and offer a 100% decentralized streaming platform. Opus employs IPFS, commonly known as Interplanetary File System (IFS) for file sharing and storage. This means that all fees associated with hosting and streaming are eliminated.
Other platforms, such as eMusic and Musiclife, have put a lot of focus on the loyalty issue and also employ EPFS to assist independent artists in getting a bigger pie of revenues arising from their work.
Blockchain is also helping to address the issue of property rights, making it possible to avoid abuse by intermediaries. In 2017, an English songwriter, Imogen Heap, was featured in an article in the Harvard Business Review that showcased the challenges faced by artists. Heap’s music was pulled down from Vimeo for using a 30-second clip. This challenge can be addressed by blockchain technology.
Blockchain is also helping to provide new avenues for more revenue and incentivizing fans through rewards. For example, Choon offers listeners rewards for curating personalized playlists, while Viberate rewards fans with native VIB tokens.
So, will blockchain help to shift control and revert it to artists? Significant progress is being made, but huge room for growth still remains. The same case applies to listeners. The past challenges will no doubt play a huge role in driving artists toward the new systems.
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