As have many other industries, the music industry has been constantly evolving over the years thanks to technological developments. For example, previously popular media for music distribution included vinyl records, which gave way to cassettes, and CDs. Today we have streaming services and, in the future, how we access content may even surprise us more. Thus, how music is produced, distributed, and accessed by the audience keeps changing in response to technological advancement.
From the look of things, cryptocurrency could be the driving force toward the next frontier in the evolution of the industry. Crypto technology has so much transformative potential for managing data and streamlining payments in the music world. In this piece, we explore how cryptocurrency can revolutionize data and payment in the music industry.
Cryptocurrency can improve transparency and reduce fraud
The music industry has long grappled with transparency-related issues such as fraud and piracy. While there have been efforts to stamp these out, the music industry’s efforts have not borne much fruit. Luckily, blockchain, the technology on which cryptocurrency is based, can come in handy to significantly enhance transparency in the industry. This is because each transaction entered on a blockchain is immutable and accessible publicly rendering it almost impossible to interfere with records or falsify them. This way, fraud, and piracy can be dealt with effectively.
The use of blockchain offers an excellent data management option, allowing for secure records of each step of a song’s lifecycle, starting from creation to distribution. Therefore, there will be proper records and recognition for all the contributions. In addition, blockchain can aid in tracking music ownership and usage rights enabling reduction of illegal distribution and enforcement of copyright laws.
Decentralizing streaming platforms
Besides the traditional streaming platforms such as Apple Music and Spotify, there has been an emergence of decentralized streaming platforms based on blockchain technology. These platforms rely on peer-to-peer networks, allowing them to cut operational costs and have fair revenue sharing.
Audius is a good example of a music streaming platform backed by blockchain and its goal is to grant artists more control over their work and their earnings. Artists can set their pricing on these platforms and receive payments directly in digital currencies, avoiding delays and the high fees that come with traditional payment systems.
Musicians can then cash out their cryptocurrencies through exchanges such as NakitCoins, or go through other channels. Therefore, blockchain-based platforms can enhance fairer distribution of earnings, and ensure accurate compensation to artists for their content.
Smoothening payments and royalty processing
Setting up an opaque and complex royalty system is a significant challenge that faces the music industry. It is common for musicians, producers, and other players in the industry to encounter payment inaccuracies and delays. Fortunately, cryptocurrency, and specifically the use of smart contracts can help to deal with these problems.
So, what are smart contracts? These are self-executing contracts whose terms are directly entered into code. Smart contracts can help to automate royalty sharing and payment in the music industry so that each stakeholder gets their fair share instantly. If a song is downloaded or streamed, for instance, a smart contract could, in real time, distribute the royalties as per the agreed percentages to the musician, producer, and any other party with rights to the song. Consequently, the blockchain system speeds up payment and improves transparency minimizing disputes over royalties.
Conclusion
The music industry can employ cryptocurrency and blockchain technology to address various perennial issues such as fraud, royalty distribution and payment, and artist empowerment. Although there has not been widespread employment of cryptocurrency in the industry as it is still in the early stages, the technology holds so much promise for future development in the industry.
