Wrecking the walls of the music industry

Nobody could have imagined that a digital token used on the deep web will brainstorm new business model ideas, disrupting classic industries willing to adopt to the digital era.

When we talk about blockchain, its simplest description could be stated as “a decentralized trust generation.” From this description, globalization is looking forward to technologies like blockchain. The number of players is increasing worldwide due to lower barriers, but there is also a need for them to interact with each other rather than only providing a naïve service. In addition, the players can leverage some synergies and reduce the intermediaries’ delays and fees.

One of the unique characteristics of blockchain is the transversality across the variety of industries we already know. An interesting proposition to study is the disruption of the music industries’ business model. Popular streaming platforms such as Pandora or Spotify provide a wide range of music at a user level, but looking into the numbers of what a priori will be imagined as a successful platform, reality doesn’t respond back.

The friction can be encountered in the value chain of the music’s creation by artists and songwriters as the end user resides in the music’s right holders. These streaming platforms have to pay high royalties for the legal supply of popular songs that people demand. It seems the value of the industry spins around record label companies, rather the ones who actually provide the extra value to the service: the artists themselves.

These facts have entailed to look for new proof of concepts in a robust industry which aims for some change or adaptation in an era of Amazon, Uber or Airbnb among other emerging disruptors. The blockchain can provide this service with the support of smart contracts. These could help to build a smoother, cheaper and simpler B2C interaction, and possibly help Spotify to turn into a profitable successful platform and reward the artists with what they rightfully deserve.

There are already many blockchain developments in the works such as PeerTracks and Ujo. PeerTracks is based on a per-user-share basis where the revenue generated goes directly to the artists. PeerTracks will also allow speculators to buy unknown artist's digital tokens while they are worth cents and speculate on their future potential. Both the speculator and the artist might get lucky. Artists could also use these tokens to sell their merchandise, tickets, streams etc. and then the revenue can be fairly divided through a smart contract, so that the lyricist, composer and performer get their fair share as programmed in the contract.

Ujo's approach is more towards cataloging songs and their creators by digitizing the artist's copyrights. Ujo wants to eliminate the middle man, so that it is the artists who will have the tools for voting and negotiating and deciding what they charge for their songs. When an artist creates a song, it will forever be stored in the blockchain with a unique ID. If only one little note will be changed, a new ID would be created, so that any new remix could be recognized. Money will be distributed proportionally and instantly to the rights holders as programmed by the smart contracts. The future is leading towards a very fair and creative global community.

Sources:

http://www.billboard.com/articles/business/6655915/how-the-blockchain-could-actually-change-the-music-industry

#blockchain #Spotify #Music