The music industry is constantly adjusting to technological changes that are beyond its control. It is quite fascinating how the industry has shifted between 2001 and 2021. This article speculates at ways blockchain could revolutionize the recording industry, for the consumer, for the artist, and everyone involved. These ideas and concepts are meant to inspire thought, imagination, and discussion.
The ever changing music industry
The concept of owning or accessing music has changed over the past century. The transition for music ownership began to shift in 1877 when Edison invested the phonograph. Prior to this, the only way to own music was to purchase sheet music and perform the song yourself. In 1900, over three millions records sold in the United States. Think about how quick this transition took place.
Music access also shifted in a dramatic fashion. Prior to the commercialization of radio, which also began in 1900, the only way to access music was to hear it in person. Radio made music access widely available, so if you didn’t own the sheet music, couldn’t perform it, or didn’t own the record… you could listen to a song transmitted through the air.
We’ve seen vinyl sales for over a hundred and twenty years now. Owning music has transitioned through 8-tracks, cassette tapes, CDs, to digital downloads. Yet today, the typical mass consumer doesn’t purchase music. They access it. This means fewer of us consider music as something we possess, signaling quite a shift in our collective thinking!
Radio popularity has waned, but access through streaming services has grown tremendously. Owning music is now for those of us who are very serious about music… audiophiles, super-fans, and those who embrace the ethos of supporting artists.
Considering all of this, I suggest that we will yet again see a shift. The music industry will slowly integrate blockchain into streaming services, music tools, music and digital collections, and even concert tickets.
What is an NFT, and how does it work?
Today (March 4, 2021), we are witnessing an historic moment. Kings of Leon are offering their new album When You See Yourself? as an NFT, using blockchain technology, and auctioning it for 56 hours. YellowHeart.io is making this auction possible.
You might be thinking, “Back up. What the what??”
An NFT is a non-fungible token. In other words, an NFT is a cryptocurrency token (an Ethereum blockchain token) that isn’t the same as other cryptos (such as Bitcoin). Instead, an NFT digitally represents something of value, such as digital art, music, or concert tickets. An NFT is unique, and thus has the potential to become valuable.
An NFT is held in a cryptocurrency wallet after it’s purchased. Coinbase is an example of a popular crypto wallet. MetaMask is an app where you can hold crypto (Bitcoin) as well as NFT digital collectibles. OpenSea is an NFT marketplace and gallery. (YellowHeart uses MetaMask and OpenSea.)
You can also resell an NFT. So purchasing a limited edition NFT could hold value, depending on the demand. This could potentially make music NFTs a speculative asset. Hypothetically, if you purchase a band’s rare NFT, and the band becomes popular, you could sell your NFT token for a profit.
Kings of Leon: NFT Yourself
Kings of Leon are going to “drop” their album, When You See Yourself?, in four NFT editions: Golden Ticket Collection, NFT Yourself Album Edition, Open Edition, and Limited Edition.
The Golden Ticket Collection will come in six unique digital art versions where only one of each exists. Fans will bid in an auction, and the highest bidder will get that digital art.
The owners of each token will have access to a pair of front row tickets to the concert of their choice, redeemable with each tour. These NFTs also come with a backstage meet and greet. A luxury SUV will be provided for eight hours.
The NFT Yourself Album Edition sales are unlimited. Instead of 56 hours, fans will have two weeks to buy the token. Owners of this token will receive a limited-edition vinyl, digital download, and digital collectible album artwork.
Open Edition comes in two digital graphics, along with the digital album. The Limited Edition comes in three digital graphic tokens (limited to either 1,000 or 500 each).
So how could NFTs work?
Bands could press limited edition vinyl, or duplicate a low run of cassettes. They could then sell their music as an NFT, offering the limited editions, concert tickets, digital artwork, redeemable T-shirts, a house show for the owner and their friends, or whatever bands think of. The NFT would in a sense hold these assets, and whomever owns the token would own these assets. Also, NFTs have an option to pay the creator a percentage every time the NFT is resold. (The Verge wrote a great piece on NFTs.)
Let’s be honest, it will take time for this to fully catch on. In order for NFTs to become widely embraced by those who prefer to own music (not just accessing it through a streaming service), the technology needs to be easier to use. I believe we’ll see that happen over the next two or three years.
A music site/app will likely be developed where artists and bands can create NFTs, and offer them in a marketplace (on their band profile) as either a product or an auction. Music consumers will each have a wallet on this site/app to hold their NFT collections. If they decide to sell an NFT, they could put it up on the app’s marketplace. The music held in an NFT could also be streamed on this site or app. (Again, this is speculation.)
Concert tickets could be sold as NFTs. Purchase a ticket for a show and it could come with access to unreleased songs, redeemable merch at the show, or digital art. These ticket NFTs could potentially become valuable beyond the concert date, depending on the assets or perks they offer or represent.
According to Rolling Stone, Portugal. The Man “launched its $PTM coin… to give fans access to an archive of live footage and outtakes that will be regularly updated.”
Blockchain and royalties
If blockchain technology is integrated into music streaming services, artist royalties could be determined within minutes instead of weeks or months as they currently are. As people stream music, they would trigger royalties to the artists, creators, and labels tied to each song. Streaming services (or digital performance rights orgs) could then immediately pay royalties, either in crypto or in the currency of choice.
Imagine a music marketplace using blockchain technology where beats and samples are sold or made available. A producer creates a beat and makes it available on this marketplace, while another person creates samples. An artist uses that beat in their song, along with several samples that they purchased on this marketplace. Every time that song is streamed, it would trigger a royalty immediately to the creator of the beat, the creators of the samples, and the artist who made the song.
Because the music industry is controlled by a number of players (i.e. major labels, independent labels and artists, and streaming services), we’ll probably have a handful of different music coins. Each coin will have a value that will fluctuate against fiat currencies. Thus, if one coin is more valuable than other crypto, services that pay royalties in the more valuable coin will draw more artists. This could intensify competition between services and players involved.
Royalties could be paid out using crypto that could be exchanged in your country’s currency. So if this marketplace uses the $JAZZ cryptocurrency ($JAZZ doesn’t exist), the artists would be paid in $JAZZ. They could at any time transfer their coins into $USD at whatever the value of the coin is. So, for example, if someone sells 100 $JAZZ and the value of the coin or token is $0.50, then they would have $50. (Note: $AUDIO, $MUSIC, $BTSG, $eMU, $VIB exist).
How else could blockchain technology change the music industry?
Imagine a streaming service where paying members of the app would be given a set number of coins each month for the purpose of tipping bands. Not only would their streaming generate royalties, members could tip a artist for a song they love. Tips would give listeners more agency in such a system. And artists would receive a boost on top of the streaming royalties.
Artists and musicians who earn royalties through music services and marketplaces will hold their cryptocurrency tokens or coins in a wallet. We’ll likely see the development of powerful music industry focused wallets where industry professionals can hold their cryptocurrencies and pay each other for their services. An artist could hypothetically hold the cryptocurrencies they earn in their wallet, exchange their coins into fiat money, or pay a recording engineer in crypto for mixing their new single.
Why would we want blockchain technology in the music industry?
Cryptocurrencies draw billions of Dollars from investors. If the music industry developed a handful of cryptocurrency coins (there are over 4,000 cryptos), it will bring massive amounts of money into the music industry. We’ll see phenomenal growth. Not only this, but blockchain technology in music services could revolutionize royalties for artists, allowing them to be paid a higher rate per play. And NFTs would provide artists many options for selling their music, merch, tickets, digital art, or assets to music digital collectors.
In order for all of this to work, a number of things need to happen. These sites and apps need to be designed seamlessly with incredible user experience. Ease of use is critical. much of the blockchain technology should happen without the knowledge of the user, nor even requiring a basic understanding. Also, it will be important for all players in the music industry to be involved. Because of this, it will take time for the industry to adapt. But I believe it will happen, albeit slowly. We will see pioneers design and develop these sites. Yet, it might not be the pioneers who will see wide success, but those who take the technology further and create apps that are designed almost flawlessly.
Regardless of how long it takes, it will be exciting over the next few years as we inch closer to this revolution. Each step will feel like a milestone to those paying attention.
Existing music companies and organizations using blockchain
- Audius – a streaming platform with their own $AUDIO token
- Bitsong – music distribution on blockchain, using their $BTSG token
- Blokur – improving music rights data
- Digimarc – identifying audio and maintaining metadata
- Emanate – direct payments for every stream
- eMusic – decentralized music distribution and royalty management system to better reward artists and their fans, with the $eMU token
- Mediachain – decentralized database for sharing information
- Musicoin – stream independent music for free, where artists are paid instantly, powered by $MUSIC blockchain
- Mycelia – fair, sustainable and vibrant music industry ecosystem, founded by Imogen Heap
- Open Music Initiative – non-profit initiative creating an open-source protocol for the uniform identification of music rights holders and creators
- Opus Audio – blockchain-based artists revenue system
- Ujo – music sharing where artists keep 100% of sales and tips
- Viberate – analytics, charts, researching tools for artists across streaming platforms, using their $VIB token
- YellowHeart – blockchain live event ticketing platform
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