Music In the Blockchain: Why Cryptocurrency Matters
In the past, musicians barely gave a second thought to terms such as “NFTs”, “cryptocurrency,” and “blockchain technology”. But the monetisation of artistic and cultural expression is on the brink of a revolution, and cryptocurrency may be the biggest disruptor to the music industry since streaming. Here’s why you should start looking into it.
A QUICK RECAP
If you’re new to the game and want an in-depth breakdown of all things crypto, we’ve got you covered.
For all others, here’s the gist: non-fungible tokens are rare collectables bought through crypto-currency — online money that includes a record of who owns what, stored on a shared ledger known as the blockchain.
When you think of an NFT, you may think of any physical-turned-digital commodity (an artwork, an essay, an in-game item). But as a musician, it means much more than a unique exchange with a fan.
It means securing intellectual property.
That’s right. While the popularity of streaming services completely conquered the contemporary music industry, the only ones not sharing in on the success were the artists themselves. Unfair royalty rates for songwriters meant that unless you have Beyonce-level stardom, the music industry “has become financially hostile to new artists on the come up, making success in the business thoroughly tied to record labels”.
That’s where music NFTs come in.
Music NFTs
The use of NFTs in the creative industry is already reshaping the way we consume music. For example, a music NFT could encompass anything from an album, song, piece of merchandise (t-shirts, stickers etc.). Industry experts predict that this nascent blockchain-based trend will benefit creators, solve endemic music industry problems and change the way we consume art in all aspects.
For example:
1. Stopping Piracy or Misappropriation of Music
NFT technology helps ensure providence and authenticity — it will be harder for artists to misappropriate each other’s work. It will also be more challenging for people to “steal” music through traditional methods, like piracy.
2. Returning Control to Artists
This is a pretty big one.
The music industry is an 26 billion dollar business dominated by the world’s top three biggest labels — Sony, Universal Music Group and Warner Music Group — who control artists’ revenue. This revenue is divided between many entities (such as promoters, distributors, producers etc.), and it often takes recording artists a long time to receive minimal royalties.
Add onto that the economic woes of putting tours on hiatus due to the pandemic, and an artist’s earnings are pretty much non-existent.
Crypto advocates want to engineer a new financial system for music that can support real-time revenue streams and ultimately hand much more power to the individual artist.
3. Adding Royalties Through Resales
Recording artists can earn additional revenue or royalties following an initial sale. For example, it can be set up that every time an NFT changes hands on NFT marketplaces, the transaction could generate 10% more income for the artists.
4. Ending Concert Ticket Scalping
The use of NFTs and smart contracts could render the services offered by scalpers obsolete in the post-pandemic concert world. Founded in 2018, Yellowheart is a blockchain ticketing platform that ensures the authenticity of digital tickets. Through Yellowheart, concert attendees’ identity is recorded. The artist also has complete control over how each ticket is purchased and resold, making them exceedingly difficult to scalp.
“A musician should be treated like a painter or a photographer, both of whom get to set their own prices for their art. These applications of crypto are “giving artists power again.” — RAC
THE NEXT STEP
AUDIUS
Turning passive streaming into an intimate relationship between artists and fans is the goal, one still in the early phases of progress. Still, there are a few platforms already working to make it happen.
Audius: Audius is a decentralised music streaming service with a social media component. In essence, it’s a platform owned and run by an open-source community of artists, fans, and developers and functions like a music co-op, with the token aligning incentives across the three constituent groups.
A great thing about Audius is that no knowledge of blockchain or crypto is really necessary to participate.
What makes it different to other streaming services is that Artists can upload their tracks at no cost, and users can listen to them for free while everyone earns (crypto) money.
CARDANO
So you’ve got your music ready. Now, how on earth do you record these transactions?
“For artists and media companies to reap [these] benefits, all players of the digital music value chain need to participate to create a scalable network. Blockchain can get us closer to making this ideal platform a reality.”
Indeed, cryptocurrency is the only way value can be digitally transferred without any middlemen or risk of duplication because ownership is immutable and provable.
You’ve probably heard of Bitcoin and Ethereum, but there’s a newcomer to the market, and it’s coming in hot: Cardano.
Cardano is is an energy-efficient, proof-of-stake blockchain platform founded on peer-reviewed research and developed through evidence-based methods. And it’s getting a lot of traction.
Is cryptocurrency the secret to shifting control and revenue back into artists’ hands? While there’s certainly room for growth, there’s also no denying that it can completely change how music publishing and royalty payments are handled. The same can be said for listeners, who can also enjoy incentives through decentralised platforms. As Werner Vermaak says, “should crypto music — through a combination of greater democratisation and proliferation — meet these challenges, it may very well change the music industry faster than the invention of the vinyl record or compact disc.”
