Blockchain technology is slowly becoming a huge part of our lives. We’ve seen it feature in finance, sports, and digital security, causing many to believe there is no limit to how far Web3 can transform the modern world.
More recently, cryptocurrencies and blockchain technology have gained prominence among entertainers, and their impacts are felt in the music industry. At first, the combination seems off because many may wonder how both worlds connect.
This article will highlight the current intersections between blockchain and music. You’ll also learn about the opportunities for both worlds to collaborate.
Breaking Down Blockchain and Web3
One can hardly talk about technological advancements these days without referencing blockchain technology and Web3. Both tech ideologies are the cause of excitement among tech enthusiasts. Understanding them is crucial to unraveling how they can operate in the entertainment industry.
Blockchain is a distributed ledger that facilitates transparent, secure, and immutable transactions. These transactions happen in a decentralized format, each getting validated by nodes and smart contracts instead of a central body.
Web3 is an aspect of blockchain technology that makes the internet open to everyone without control. Unlike previous internet experiences, it allows users to have complete control of their data and digital identities.
To achieve this, Web3 uses decentralized apps (dApps) that operate on blockchain networks. Instead of being controlled by intermediaries, dApps allow their users to connect and interact directly, embracing transparency and security.
Current Challenges in the Music Industry
Even though the music industry has grown from its old CD and radio days to modern streaming and listening platforms, the industry isn’t devoid of potential room for growth.
We highlight some current challenges and how blockchain is changing the conversation below:
Royalty Issues
One of the major income sources for musicians is royalties. When you stream an artiste’s music, they get paid a certain amount in royalties. However, the current system lacks transparency, making them unsure of how much they truly earn from various streaming channels.
Some reportedly complain about unfair cuts from their record labels and stories of many getting paid less than they deserve.
Moreover, musicians and their record label bosses experience difficulties in tracking and auditing their royalty payments from streaming platforms. They only work with whatever data the platform or their distributors provide.
Overall, the prevalent royalty issues cause conflicts between major stakeholders. But record labels and artists can now create fair royalty systems using blockchain technology to track the IP rights to a track and pay the creators their adequate shares.
For instance, when producing a music video, people like producers, song mixers, musicians, and directors combine their skills. Everyone can specify their percentages from the project and get paid accordingly.
Copyright Infringement
Another current bottleneck in the music industry is copyright fraud. Just like back in the days when people could purchase pirated music CDs on the streets, many people still illegally download pirated music copies from some websites.
Unfortunately, many get away with these illegal practices without legal repercussions. As a result, musicians spend so much time, money, and effort on their content, but they unavoidably lose potential revenue because of their lack of control over their projects.
The serious intellectual property (IP) issues make it challenging for upcoming artistes to find their footing.
To mitigate these risks, entertainers and digital creators can license their collections using blockchain technology. Doing so will make the content unavailable on piracy websites, and they can use smart contracts to automate payments upon every stream or download.
With such a strategy, musicians can get the power to control and monitor their content and cash flow without the fear of music piracy.
Limited Audiences
Despite being superstars in their own rights, many musicians, especially upcoming ones, struggle for visibility. These days, the average musician needs a big break to be known beyond their home countries or even just a locale.
This is because connecting with diverse audiences requires huge marketing funds. So, many musicians take unfair record label deals or use collaborations to reach a more extensive audience.
However, with blockchain technology, musicians can expand their reach internationally and get their content to a global audience relatively easily.
This is because ownership is decentralized, so they don’t need industry gatekeepers and record label bosses to get a big break. Instead, they can operate independently and market themselves without spending a lot of money.
Underwhelming Fan Engagement
Though entertainers like musicians have social media accounts to connect with their fans, many of these accounts are operated by third parties. As a result, many musicians have limited engagements and interactions with their fans.
Moreover, they can leverage blockchain payments to attract crypto enthusiasts. Though this is more common with the best crypto casinos and gaming sites, better adoption in the music industry will expose entertainers to larger audiences.
Interestingly, various solutions already exist with these initiatives. For instance, Web3 platforms like Mith and Medallion use blockchain to create more engaging artist-fan relationships.
Future Potential of Web3 and Music
Looking at Web3, there are many possibilities for musicians to explore. Artistes can leverage tokenization to monetize their content. For example, they can create non-fungible tokens that will turn their songs and albums into tradable assets on digital marketplaces.
They can also explore various revenue channels that are easy to track, making it easy to avoid third parties like distributors. The direct relationship with their fans will not only help them earn more. They will also develop stronger bonds with their fans.
In terms of royalties, they can track their sales and determine their percentage contributions to ensure they get what they truly deserve.
Conclusion
As highlighted in this article, the music industry is plagued with many setbacks. The existing system permits the exploitation of artistes by industry gatekeepers, royalty disputes, and IP rights issues. Blockchain technology is proving effective in solving these issues. However, there’s a massive potential that remains untapped.
We can expect the next level of the relationship between blockchain and the music industry to eliminate these challenges and create more opportunities for both worlds to connect.
