Blockchain technology promises a deeply empowering experience for the individual – whether she wants to hold onto her own personal data, or wants to be paid for the music copyright she owns.
Ethereum revolutionized the blockchain by introducing smart contracts into the mix. With a market cap over $107 billion at the end of January 2018. Ethereum tokens trail only Bitcoin in total value, but the tokens aren’t the major selling point here. The underlying digital ledger of Ethereum is being utilized by companies in a variety of industries to create smart contracts, which have a lot of utility in business operations.
Now three separate startups are working on ways to implement this technology to resolve two of the biggest pain points in the music industry.
Choon, SingularDTV, and Tao Network are all building digital music distribution platforms on the blockchain. The services hope to use smart contracts and the digital blockchain ledger to track music plays, which could prove even more useful than Soundscan.
Before you dismiss these as gimmicks, let me explain how the music industry currently works and how these startups may be on the right track toward streamlining it.
How Music Copyright Works Today
Every time you hear a song played in public, the artists responsible expect to be paid. Tracking plays is accomplished by performance rights organizations. ASCAP and BMI are the largest in the U.S., tracking over 23 million works, although Global Music Rights, SESAC, and SoundExchange are also in the business.
Streaming services like Pandora and Spotify can easily track which songs are being streamed by whom. However, when a song is played on the radio, TV, or at a club, bar, or restaurant, these companies currently depend on manual data to track it.
TV stations keep cue lists of every song being played on their channels, while radio stations save playlists of all their programming. In addition to this, the performance rights groups use digital monitoring to monitor airwaves for their songs. It’s similar to the software used by YouTube to catch potential copyright violations.
This information is then reported to the record labels, along with payments collected from the stations. The labels then pay royalties out to their artist rosters. However, piracy is a major concern with this method, and artists don’t always earn their due. Piracy doesn’t just involve individuals downloading music through torrent services. It also includes businesses playing music in public without paying BMI and ASCAP.
It has many artists fuming. Lil Wayne has been embroiled in a three-year-long legal battle with Cash Money Records and Universal Music Group over $40 million in unpaid royalties. His story isn’t unique, unfortunately, and it’s difficult tracking where along the lines this money gets “lost.”
New Kids On The Blockchain
The smart contracts in Ethereum’s blockchain can streamline this process. That’s exactly what Gareth Emery is hoping with Choon. It’s a digital publishing and distribution platform that lets artists release their music with digital signatures attached. Each time a song is played, the blockchain is updated, and tracking plays (and music copyright) is as simple as pulling up the public ledger. Tao Network is working on a similar project, but both companies are hindered by the fact they’re also attempting to launch branded cryptocurrencies.
SingularDTV, however, has already surpassed a $128 million market cap. In addition to blockchain music tracking, the company also launched SingularX, a decentralized token exchange platform meant for trading intellectual property tokens from different rights-holders. SingularX will be available in February and might help tip the balance of power into the hands of the music creators.
Only time will tell which of these music services will gain adoption within the music industry. It’s possible BMI, ASCAP, or the record labels will create their own. Still, blockchain in music is definitely a sector to watch, as it can replace what’s currently a very manual and error-filled process.
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