Taylor Swift, Gaga, and their brethren atop the music industry claim to be all about change. Looking forward is a near-constant theme in their catchy pop tunes. But the industry hasn’t proven willing to apply “change” to the infrastructure governing contracts, distribution, and payments. They should be more open-minded, and here’s why:
Consider the movement towards micropayments, or smaller-sum transactions that compensate multiple parties in real-time as a portion of each sale. Remember when Tower Records and Virgin were the go-to spots for new music? They’re fossils for a reason — iTunes led the charge in establishing single-song purchases, and the model is extremely popular among music fans.
iTunes broke down the album sales model into single songs. Blockchain may take the next step, breaking down single song purchases into a series of smaller transactions.
Paying royalties is a convoluted process that has led to litigation on countless occasions. Despite the US Congress setting a standard rate for music royalty payments, it’s easy to find loopholes. Automated transparent alternatives for enforcing royalty splits would create greater equity.
Enter: the blockchain. Logging contracts on a blockchain ledger and automating fractional royalty payout just makes sense.
Beyond payments, blockchain ledgers could create profiles for each artist, collaborator, and technician needed to create a song. These profiles could be helpful for booking artists and technicians, whether for a bar mitzvah or a recording session. Several startups have floated this concept.
Blockchain technology could play a role in ticketing, copyright protection, and beyond. It’s just a matter of time.
1. Nigel Rudlin, CEO and Founder of indieOn
“Capital infusion is the big trend. Investors will be looking for investment opportunities that are founded on a working viable platform. And one that offers a real ecosystem to stabilize its token-nomics.
Major labels will begin to see their revenue slipping away to blockchain providers with new solutions to the traditional problems of under compensation for artists and the fraudulent activities that can occur in the consumption of a song. If they drag their feet as they did with adoption of the internet back at the turn of the century, they will fall behind and expend millions to catch up.”
2. Josh Tucker, Partner at Pillsbury LLP
“Micro-payments that facilitate broader use of alternate compensation models, like per-play patronage models. Large platforms are working out kinks that will let them support larger scale, lower-latency operations at lower transaction costs. When these costs become low enough, expect rights holders to experiment with business models that try to cut out middlemen. It's difficult to forecast which will prevail, but it seems likely that some heretofore new or obscure model will gain market share.”
3. John Wagster, Co-chair of Frost Brown Todd’s Blockchain and Digital Currency Team
“2019 will be a year of slow growth for blockchain in music. The technology currently exists to transform the recordation and payment of music royalties, but the industry needs a champion in the form of a major label, a prominent performance rights group, or some powerful artists. Unless there is a strong voice promoting change, the entrenched performance rights organizations have no reason to give up the dominant market positions they have worked hard to establish.”
4. Ricardo Porteus, Founder of Bleep.me and Dance for 1 Meter
“The future of Blockchain across any industry is to become a foundational technology; a background framework that handles transactional and information data. The front page news and the confusion between ‘Cryptos' and ‘Blockchain' will continue to disperse.
The arrival of Blockchain as a service platform (BAAS) such as Kaleido by ConsenSys will allow music industry platforms to ‘plug n play' in some senses. Blockchain will become another tool in the arsenal of companies wishing to become transparent in their reporting and publishing of music rights, royalties and data.”
5. Vasja Veber, Co-founder and COO of VIBERATE
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