I’ve spent the last two years learning about blockchain technologies, their limitations, and how they can be used to create value. In my opinion, this is the first time in history where we have the technology to change the way we stream music. The following is a description of an alternative to our present system that I think could work better for artists and fans alike.
A blockchain-based system could be created with smart contracts built into the blockchain code that allow for an immediate payout when a song is played, rather than months later. This would be done using what’s called a “token” or “native currency” that would act as an internal accounting ledger to keep track of all payments from one party to another (see more below). This would allow for an artist who has written a song to immediately receive money when it’s played on Spotify or Pandora or any other streaming service. This money could then be divided out amongst collaborators, publishers, and performers as appropriate based on predefined rules set up within the contract itself.
In addition to being a much faster way of getting paid, this system would also allow artists greater control over their songs’ monetization. For instance, an artist might want his or her music played on YouTube but not Spotify because YouTube ads are lower quality
Music streaming is a $15 billion industry, with more than 100 million users worldwide. Yet, the artists who create the music that drives this industry are seeing their earnings decline. And it’s not because they aren’t seeing increased revenues — in fact, music industry revenues are at an all-time high — but because of how revenue is distributed.
Streaming is done through centralized services like Pandora, Spotify and Apple Music, which charge users a monthly fee to stream licensed content. This revenue is then distributed to the rights owners (artists and labels), by a complex process that involves licensing agreements and royalty distribution — one that is largely determined by traditional record labels.
But what if artists could bypass the middlemen and license their songs directly? And what if these transactions were transparent and traceable across all stakeholders in the ecosystem?
This is one of many use cases for blockchain technology in the music industry; others include micropayment-based streaming, digital rights management and ticket sales. While there are many avenues for blockchain to add value to the music industry, here we will primarily focus on how it can change how we stream music.
There is a growing school of thought that believes that blockchain technology will disrupt the streaming music industry. Indeed, with over 6 million paid subscribers, Spotify is one of the largest music streaming services in the world. But despite its massive size, Spotify still pays out an average of $0.006 to $0.0084 per play to rights holders.
The vast majority of these payments are being made through intermediaries such as Performance Rights Organizations (PROs) like ASCAP and BMI.
The problems with many of these organizations is that they are often riddled with inefficiencies, corruption and high fees; if there is a way to cut out the middleman and allow artists to be paid directly from fans, one would imagine that many artists would flock to it.
That’s where blockchain technology could come into play: with its ability to facilitate direct peer-to-peer transactions without the need for a third party intermediary; it could cut down on payment processing times and costs significantly.
Just recently, Ujo Music raised over $2 million dollars in Etherium based cryptocurrency by selling music directly to fans using blockchain technology. The current licensing system makes it difficult for smaller acts to get paid fairly whilst also keeping track of who owns what rights to any given song –
One of the biggest challenges facing the music industry is how to get artists paid for their work. The existing system of physical and digital sales and radio airplay results in a disproportionately small amount of money going to the artist. For example, if an artist has a $1 million song on Spotify, they only make about $5,600 from that song on Spotify. But with blockchain technology, we have the opportunity to create a new system that could help artists be more fairly compensated for their work and allow fans to more directly support them.
The idea is simple: What if fans paid artists directly every time they listened to their music? Blockchain technology enables this possibility by making it easy for fans and artists to transact online. A direct payment from fan-to-artist means no middleman (such as Spotify) can take a cut of an artist’s revenue.
Every time you listen to a song, a tiny bit of cryptocurrency would be transferred instantly from your digital wallet to the artist’s wallet. This tiny microtransaction would be imperceptible by the listener but significant for the artist.
And since this is all happening over blockchain, the payments would be instant and secure; no third party could block or reverse these transactions. These features could also help
As the music industry has been forced to adapt to digital trends, things haven’t always gone smoothly.
In the last decade or so, independent artists have started to take advantage of digital music streaming services, such as SoundCloud, Spotify and Pandora. These services have given artists the opportunity to share their music with a larger audience.
However, big record labels are still struggling to adapt to these changes. So much so that they’ve had trouble embracing these new platforms.
According to an article by Forbes, major record labels are finding it hard to compete in this day and age because they’ve had the same business model for decades. While it’s true that they’ve been able to adapt some of their strategies over the years, they just haven’t been able to keep up with demand in the fast-paced digital world we live in today.
This is where blockchain technology comes into play.
A blockchain is a public, distributed ledger which keeps track of what is owned by whom and when. It is a chronologically ordered series of records (blocks) that are updated in real time. The information contained in the blocks is immutable and cannot be changed without the consensus of everyone involved.
The main advantage of the blockchain technology is removing third parties from transactions between two consenting parties. Instead of having to trust an intermediary like a bank you can use a blockchain to send money directly to another person, without any third-party involvement. This makes blockchains very useful for creating decentralized economies or transferring small amounts of money, such as micropayments (payments smaller than can be processed by traditional payment systems).
Blockchains are also unique in the sense that they don’t have any single point of failure. There’s no central server that could be hacked, or company headquarters which could go bankrupt and make all your data disappear. Instead, a blockchain has thousands or even millions of distributed copies across every node on its network, so it would take a lot more than just one computer being compromised to destroy it.
These features make blockchains incredibly interesting for many applications, such as peer-to-peer lending platforms or decentralized autonomous organizations (DAOs), where there’s
Bitcoin is a digital currency that is created and held electronically. No one controls it, no one prints it. It can be used to buy and sell things electronically in the same way that you can use any other currency to do so. The big difference is that no one controls Bitcoin.
Bitcoin was designed by Satoshi Nakamoto in 2008. Like any new technology, Bitcoin had some initial problems. However, over time, those problems were addressed and now it is a much more reliable form of digital currency.
Since there are no physical Bitcoins, the only thing that represents the currency is a blockchain. A blockchain is a public ledger that shows every transaction in chronological order. The blockchain also shows every bitcoin exchange rate history as well as helping people make sure that bitcoins haven’t been counterfeit.
The blockchain is maintained by people who are known as “miners”. These are people who use their computers to help validate and timestamp transactions, adding them to the ledger in accordance with a particular timestamping scheme. In return for their services, miners are rewarded with newly generated bitcoins and transaction fees. These days the number of bitcoins in circulation has reached just under 16 million out of 21 million total coins which will ever exist.