It may be time for another disruption in the music industry. The industry, whose revenues plummeted due to disaggregation by technology services, is undergoing a renaissance of sorts, with blockchain-related startups devising new ways to fix problems.
The technology's decentralized framework is especially suited to the music industry, where a phalanx of middlemen – including agents, marketing professionals and music studios – results in inefficiency and diminished revenues for artists. Music streaming has further complicated accounting and resulted in miniscule earnings for artists. Blockchain's distributed ledger can be used for a variety of applications within the music industry, including ensuring direct payments to artists and establishing large digital rights management services run by artists themselves. Most attention within the industry is focused on two applications for blockchain technology. (See also: How Does Spotify Make Money?)
The first one is related to artist payments. Blockchain's self-executing smart contracts hold great potential for musicians to receive direct payment of royalties in a transparent and automated manner. Such contracts can be hard coded with specific criteria that will enable payment once they are met. As music streaming becomes the preferred mode for listening to music and releasing albums, smart contracts could cut out significant numbers of inefficient middlemen from the process and increase eventual payouts to artists. According to Zach LeBeau, CEO of SingularDTV, a digital content management system based on blockchain, the platform's vision is "to create a fair and balanced entertainment industry that can one day enable anyone to express themselves in a meaningful and prosperous way." (See also: How Blockchain Is Changing Real Estate.)
The second popular application of blockchain within the music industry is digital rights management. The distributed ledger can be used to store information related to a variety of physical assets and set terms for use of an album. In turn, this could also enable artists to release music without record companies. For example, British singer/songwriter Imogen Heap released her 2015 album "Tiny Human" using blockchain. According to her, the imbalance in revenues between artists and big recording studios is due to the absence of information related to record sales for the former. "What we need is one place where we put our verified information out, everything that anyone could possibly want to know about that song in order to interact with it in the best way possible and we can monetize with it or give it for free," she said.
Some streaming music companies have already taken notice. For example, Spotify acquired Mediachain, a startup that uses blockchain as a base to develop media technologies. Before its acquisition, the New York-based startup had developed a media attribution engine for creators as well as a distributed database connecting creators to different forms of media. (See also: Spotify Acquires Mediachain to Advance Services With Blockchain.)