The ’90s were a golden age for music moguls, what with the soaring sales of CD albums, until Napster’s peer-to-peer (P2P) file-sharing software upended the industry by effectively allowing the world to enjoy music for free. In hindsight, Napster could be seen as a pioneer that began a revolution which eventually led to the music streaming industry that we have today. Now, music might be in need of another tech disruption in the form of blockchain.

Problems Persist in the Music Industry

When Napster was introduced to the market back in 1999, it opened a Pandora’s box which led to a host of legal issues arising from rampant copyright infringement in the use of its P2P sharing software. Almost 20 years down the road, these issues linger on, as reflected in a lawsuit filed against music streaming giant Spotify for allegedly infringing on the rights of songwriters represented by Wixen Music Publishing. The lawsuit was eventually settled in December 2018 for an undisclosed sum. 

Other than copyright infringement, another longstanding issue faced by the music industry is the tendency of artists to end up getting short-changed. The most extreme example is perhaps that of South African musician, singer, and composer Solomon Linda, who was paid a mere 10 shillings for his song “Mbube,” the original version of the 1961 hit song, “The Lion Sleeps Tonight”.  

As recently as 2017, a study by Citigroup found that only 12% of the revenue generated by the music industry that year trickled down to the artists. With this in mind, let’s explore how blockchain may be used to turn the tables.

Decentralized, Immutable Records: The Benefits of Blockchain Music

The music industry has a major money problem in the form of its ‘royalty black box’, which is holding about US$2.5 billion in uncollected royalties. The colossal amount of uncollected royalties stems from the lack of interoperability between the databases of the various industry players, including record companies, publishers, and streaming service providers. Coupled with the complexity of modern day music distribution networks, it is difficult to trace the rightful owner of a royalty check, resulting in this perplexing state of affairs. Blockchain, with its decentralized and automated ledger system, can bring some much-needed structural changes to the royalty payment system of the music industry.

Besides unpaid royalties, the music industry also has to deal with rampant piracy issues, due in no small part to the ease of content sharing in the digital age. The global non-profit think tank, Institute for Policy Innovation (IPI), estimated that the music industry loses about US$12.5 billion to piracy every year. Blockchain, with its immutability, may prove to be useful for the music industry in its struggle to rid itself of piracy.

Blockchain Use Cases in the Music Industry

The blockchain space’s answer to the woes of musical artists and the ‘royalty black box’ conundrum comes in the form of Mycelia, which aims to use the concept of a ‘big spreadsheet in the sky’ to provide a comprehensive database containing all the information about any particular song in one place, in order to ensure that all contributors receive their fair share. 

As for combating music piracy, CustosTech has built a proprietary forensic watermarking technology which uses a unique serial number to detect any unauthorized sharing of audio files. Bounty hunters who uncover any element of piracy will be rewarded in the form of Bitcoins embedded in the encoding of the illegally-shared file. 

Lastly, MusicLife aims to limit piracy while enhancing the income of artists through a blockchain-based music ecosystem. The MusicLife platform allows artists to share their songs in return for income as determined based on the popularity of the songs.

These problems plaguing the music industry are so old, so widespread, that hearing about them has become a common refrain. However, blockchain may be just the tool to fix this broken record and bring the industry back into harmony.

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