The way music is released has the potential to completely change within the next few years thanks to an emerging technology called blockchain. Not only does blockchain have the potential to revolutionize who releases music, but it can completely shift the focal point of the music industry, making the barrier for entry for new and emerging artists lower. While large record labels basically dominate the music industry now, blockchain may cause them to lose some foothold.
What is blockchain technology?
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What does the music industry look like today?
As it stands right now, the entire music industry is dominated by a small number of players with a large sphere of influence. In fact, what is known as the “big three” of record labels (Sony, Warner, and Universal Labels) has made up nearly 80% of the music market for the past few years. On top of this, according to the 2018 RIAA Year-End Music Industry Revenue Report, streaming services have accounted for 75% of music revenue in the U.S. in 2018. As one can assume, the vast majority of that streaming revenue comes from Spotify, Apple Music, Youtube, Amazon, and Tidal. Then there are specialized broadcasters such as Nexus, local FMs. Sirius and Digital Broadcasters overseas.
This can present a problem as the algorithm and databases behind streaming platforms like Spotify and Apple Music are designed to promote large artists to listeners, making it so new independent artists have very little discoverability and a slimmer chance of earning enough revenue to support themselves.
That’s not the only problem the current system presents: popular artists who do make income from music streams, royalties only make up a small portion of their income. Royalties are then often shared with their record labels and songwriters. In 2014, Taylor Swift took a stand against this practice and fought for the rights of artists to their music by removing her entire discography from Spotify.
How can blockchain change the music industry?
There has been a spring of music startups that have incorporated blockchain technology into their platforms, including Mediachain, Jaak, and Blokur. There is even a company for K-pop music that uses blockchain technology, called K-Tune, and a smart speaker that supports blockchain streaming platforms, called Volareo. As blockchain becomes more popularized for music listening, it can eliminate the need for a third-party involved in the transaction between an artist’s music and their fan. This way, artists will not have to share their profits with a record label to manage transactions. Blockchain would create a direct relationship between a creator and a listener or provider, eliminating the buffer of a third-parties and allowing an artist to take back control of the copyright to their music.
