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Digital music really could use some help. Industry revenues are dipping due to piracy and illegal use of content. Singers and composers are being short-changed by music companies and streaming services. And business models built upon patterns and practices dating back to early 20th century, decades before the invention of digital and online services, are fueling a lot of bad will.
But a number of blockchain innovators are forging new solutions that could knock down inefficient intermediaries standing in the way and enable musicians to transact easily and directly with audiences.
We’re currently seeing solutions emerge to handle three key concerns:
1. Licensing and rights management
Digital rights expression is one of the biggest problems the music industry is tackling presently. It’s extremely difficult to clearly define which performers, songwriters, producers, publishers, and labels own the rights to songs and recordings and how royalties should be split between them.
This is the first place we can expect blockchain to bring change. The ledger stores a cryptographic hash representing the digital content of every new song registered on the blockchain, along with lyrics, musical composition, liner notes, cover art, licensing, and other relevant information.
Since they are immutable distributed ledgers owned by no single entity, blockchains will enable content creators to register ownership of their creations without the need for big record labels.
This concept is being tested and explored by several startups and nonprofit organizations. One key player is UjoMusic, based on the Ethereum blockchain, that enables artists to manage their identities, music, and licensing on their own terms. Combining the transparency of the blockchain with the innovation of smart contracts, the system also enables consumers to license the music for various purposes.
Ujo beta-tested the platform last year with “Tiny Human,” a song by award winning British singer and songwriter Imogen Heap, and it plans to go mainstream in early 2017.
Heap, herself a technologist, is pioneering her own blockchain-based offering, Mycelia, a fair-trade music business that gives artists more control over how their songs and associated data circulate among fans and other musicians.
2. Removing intermediaries
Another problem that blockchain-based services such as Ujo and Mycelia can solve is how content creators get compensated for their work.
Currently, a string of publishers, record labels, talent agencies, streaming services, etc., each take a cut of revenue before passing any remaining crumbs along to artists — after a 6- to 18-month delay.
“Shouldn’t it be possible in a digital world for the royalties to come directly to you, instead of through a slow, inefficient, and opaque chain of collection societies and publishing administrators?” reads “The Problem,” a statement published by the founders of Ujo Music.
As reliable peer-to-peer platforms, blockchains establish a direct relationship between artists and consumers, making sure they are instantly paid for their content and receive near-full payment instead of a tiny fraction.
Users place requests on the blockchain, and smart contracts give instant access to the requested song while directing funds to the crypto-wallets of the song’s rightsholders. That’s why Heap describes her platform as “trying to take away the power from top down and give power, or at least a steering, to the artist to help shape their own future.”
In addition to removing intermediaries, the…