When it comes to the future of the music industry, it would appear the smart money is on, and behind, blockchain.
With this month’s launch of the Tao Network, which proclaims itself to be the first blockchain designed exclusively with musicians and the music industry in mind, the fully digital, encrypted and irrefutable system for not only providing instant payment of all royalties to all artists credited on a song but allowing musicians and their fans to interact without intermediaries is stepping even more squarely into the spotlight.
In a piece for Forbes, reporter Jonathan Chester examines blockchain as a “disruptive” force in the $15 billion recorded music industry.
“Much like our experience in international payroll processing, the music industry itself can benefit from the existence of blockchain technology,” he writes. “Any industry that is encumbered by inefficient intermediaries is in danger of disruption, and the music industry is ripe for it.”
He takes a look at two particular blockchain startups, PeerTracks and UjoMusic, and points to a “manifesto” on the latter’s website as offering a straightforward suggestion of why blockchain could help sort out some of the mess the music industry currently faces.
“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,” UjoMusic’s management writes.
UjoMusic’s system “combines the transparent attribute of a blockchain with smart contract technology,” Chester says. “Users will be able to buy different types of licenses, such as the right to play in a commercial, in a bar, in a YouTube video, or just when sitting at home with friends, by sending ether (a cryptocurrency) to a wallet that can be easily branded as the artist’s own. A smart contract is then executed which will determine the license purchased based on the amount paid, deliver the music to the user, immutably maintain a record of the contract bought on the blockchain, and then pay directly to all the stakeholders involved in the creation of the music.”
PeerTracks, as discussed in this space before, is more like a digital service provider that takes a 5% fee (compared with Apple’s 30% fee for iTunes), and artists can sell “Notes,” or personally branded tokens, to determine their biggest fans. In return, fans can earn rewards for having a higher number of “Notes” through invitations to exclusive events or access to the newest songs before they are officially released.
Also breaking into the music blockchain world recently is Revelator, which raised $2.5 million for a blockchain that can be used to “track the use of digital goods and distribute royalties to their owners when they’re due. Prior to Revelator, musical artists did not receive their owned royalties for weeks and often months,” writes Jacob Timp at CoinTelegraph.com, a website specializing in bitcoin-centered news.
Revelator’s CEO Bruno Guez asks rhetorically in a press release announcing the funding, “If you have data every day, why can’t we make payments every day? If you had 1,000 downloads, I can pay you $700 tomorrow.”
Revelator raised the $2.5 million through funding from Exigent Capital and Digital Currency Group, the latter of which has a track record of investing in bitcoin-related companies.