Hitting The Right Note – How Blockchain Can Bring Transparency To The Music Industry
We all listen to music. We all enjoy music. It’s a part of almost everyone’s life. But, as times have changed, the way in which we consume music has also changed. From CDs to downloads to streaming, technology has completely changed the way we listen to music.
However, it’s not all upsides. Even though the internet gave the music industry far greater reach and new means of distribution, it’s made monetising that content more challenging – which is why it’s so important to change the way we measure and pay for music plays.
In need of tuning
The music industry currently works with fragmented, analogue rights databases that do not align the sound recording and the musical composition copyrights, although these are mostly triggered by the same usages. This results in relying upon outdated royalty collection methods, missing metadata, a complex licensing process, and unallocated royalties that cannot be accurately allocated to the correct rights holders.
On top of that, the digital shift largely amplified music usage all over the planet and making it extremely challenging for Publishing Rights Organisations (PROs) to correctly track and attribute consumption as well as payments. Because of this, countless potential payouts are left unattributed and uncollected – not by choice, but simply because there is currently no technology to assist in the collection of consumption data.
This gap has had serious impacts on the industry. Only very recently have music industry revenues started to increase after more than a decade of serious decline. Lately, digital music proceeds have overtaken physical ones. In this context, the industry is in serious need of a technological infrastructure that can support the ongoing and ever-growing digital trend.
One specific area that blockchain can assist the music industry with is the proper allocation of royalties, by helping track consumption through immutable logging of plays. The music industry differentiates itself from the entertainment space by having two distinct types of copyright: sound recording and the musical composition. Respectively, these copyrights are normally owned by publishers and record labels, assuming the artist in question isn’t self-published or isn’t signed to a record contract.
It’s crucial to understand that numerous artists and even engineers are entitled to some royalties ensuing from licensing copyrighted songs. In fact, several people can be involved in creating a song and several performers are needed to record it.
Combining the correct metadata with blockchain-powered smart contracts and cutting-edge music tracking technologies will enable everyone in the music industry to increase their revenues and decrease their cost. Streamlining the licensing and royalty collection process ensures fast and prompt payments to right holders.
For the broader music industry, the proper allocation of royalties is essential for the ecosystem to new and independent talent to monetise their creative efforts. Besides transparency and accuracy, the decentralised principles of blockchain technology ensure scalability and provide preparedness for the future demands and growth of the industry.
We understand that a purpose-built solution is required to streamline the royalty attribution and collection process. Such a system must meet the needs of artists and publishers whose work typically features across disparate channels, formats, and mediums.
And there is no better time than the present to provide a solution that all key players in the music industry stand to benefit from.
About Mattias Hjelmstedt, Founder & CEO of Utopia Music:
As a serial entrepreneur, Hjelmstedt has successfully founded and built a number of leading technology companies since the early 1990s. An unparalleled innovator, Hjelmstedt has a passion for media and technology which drove him to pioneer the transformation of the E-Sports and digital TV industries. Within E-Sports, Hjelmstedt spearheaded the creation of the first social platforms for games and assisted in the creation of the software still used today to power some of the world’s largest games such as Battlefield.
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