Protecting the Rights of Musicians: A Use Case for Blockchain

“Working in a creative or artistic field requires a tough skin, and the music industry is no exception. Musician, manager, agent or promoter—they all experience setbacks.”—Heather McDonald 

It’s not something we think about every day, but we most likely use it every day. That’s playing our favorite song or tune on the radio while we’re driving, listening to iTunes while we’re working out, or selecting a ring tone for our smartphone. Getting to listen to music doesn’t just happen. Someone has to create it, distribute it, and hopefully get paid for it—without someone downloading copies for free.

Artists need to get compensated. They also need to protect their creative rights. Both have proven to be a challenge in the digital age where nearly anything can be downloaded for free, with virtually no consequence.

Heather McDonald recognizes this reality as she writes for The Balance Careers: Anyone who works in a creative or artistic field will require tough skin. This is just as true for musicians, managers, agents and promoters in the music industry.

Common issues …

Musicians have two areas they need to manage: 1) production, and 2) the business of music.

Music Production

When it comes to managing production—it’s all about the music they play and how it gets distributed. A good manager can assist in many of these areas. Even though the musician may have a good manager, new talent not yet discovered—will have to deal with disappointments.

A musician may send out a demo, and not get any response. Or, they could have been promised a published review, only to discover it was never published. Clearly, areas of frustration for the artist.

Perhaps nothing can be more frustrating than to have a low turnout or a worse yet, a canceled show. There are no guarantees, the musician has to stay internally motivated. All of these disappointment add up. New artists, will have to accept minimal income and get used to supporting themselves at modest levels.

Image Source: polybull.com (Nirvana Demo Tape) Back when audio cassettes where king. Musicians had to do their best with no computers a sound proof room and some were fortunate to rent a studio and get a quality recording for their “demo tape”.

The Business of Music

The second area the musician will need to manage, is the business of producing music. There is the expectation that the artist will get paid. They need to manage their royalty collection company. The artist will need to ensure they’ve properly protected the rights to their work. Internet copyright and royalty protections should be put into place. Critical to ensuring that the musician will get a fair compensation.

While it’s good for marketing and great for exposure—artists cannot demand royalties from a radio station in the U.S. McDonald writes that “The United States is one of the only countries in the world that does not require terrestrial radio stations to pay royalties to performers”. (McDonald, Heather)

Stevan McGrath points out in Single Grain, that music piracy is one of the biggest aspects in the deterioration of the music industry over the past 20 years. Piracy, he reports, has an estimated cost in the U.S. economy of over $12 billion of total output, a loss of over 71,000 jobs, and $2.7 billion in sound recording and retail industries earnings. (Mcgrath, Stevan)

 Blockchain Use Case for Music

After many years of blockchain use case in other industries, blockchain use case is definitely being implemented by the music industry. In January 2018, musician Imogen Heap unveiled the Mycelia project; a project which aims to use blockchain to solve a number of the music industry issues. Heap, an advocate for blockchain technology in the music industry, use it so that her fans could choose to pay for her song with Ether cryptocurrency. (Dredge, Stuart)

Dredge evaluated blockchain as a use case for the music industry. A common theme emerges as musicians look toward the business of managing their music.  In this article, I highlight three key features that blockchain can address.

Smart Contracts

In Imogen Heap’s example, blockchain’s ability to use smart contracts will help artists sell their music to their fans using a smart contract that split and pay royalties—in real time—without the need for middlemen such as publishers, labels or royalty collecting companies.

Cryptocurrency

Once the smart contract determines conditions have been met, payments can be made with cryptocurrency. Artists who engage in blockchain can mint their own cryptocurrency. For instance, dance artist Gramatik created the GRMTK token, and in so doing, “raised just under $2.5 million by releasing 25 percent of them for fans and the crypto community to buy. Anyone holding GRMTK tokens will get a share of his royalties,” reports Dredge.

Copyrights

One area that is most challenging for artists is the protection of their music. Although, they may have adequate copyright protection, enforcing it may be a bigger challenge.

“The music industry is fragmented; artists are forced to put their music on so many different platforms and they have no easy way to track the money they should be earning since most often they have to go through a third-party service in order to get listed,” writes Kirill Shilov for Hackermoon.

The nature of distributed ledgers inherent in blockchain is seen as a possible solution for ensuring fair compensation for artists. Shilov cites a LinkedIn report by Silvan Jongerius that there are four things blockchain can do for the music industry: (Shilov, Kirill)

    • Provide a metadata core ledger to clear up copyright issues,
    • Allow for a faster and more fair payment distribution,
    • Create an “ICO-like” funding scheme for music projects, and
    • Help remove some of the central control from labels and Performing Rights Organizations (PROs).

Solutions are currently being implemented with a number of blockchain companies already. Musicoin and Revelator, are two examples that offer alternatives to traditional industry standards. With Musicoin, users can stream music for free. While they have a library of over 30,000 songs, they’ll need to scale if they look to compete with Spotify. As to Revelator—they provide a copyrights monitoring service. This helps musicians and artists track how much in royalties they should be earning. (Shilov, Kirill)

Conclusion

Music provides enjoyment to humanity in countless ways. From the days when people could first talk and sing, we’ve been writing prose and singing songs that reflect our lives. With the advent of recording devices such as the gramophone to CD’s and now to digital streaming, the challenges of protecting the rights of artists and musician has become a significant challenge in this industry. While many laws and technology exits to protect those rights, still, billions of dollars are lost every year.

Blockchain offers the technology to disrupt this proverbial—legal Achilles’ heel in the music industry. In so doing, it promises to ensure fair compensation for the musician and artists, and we will continue to enjoy the best work of music made by musicians and artists worldwide.

 


Sources

Dredge, Stuart, “What Could Blockchain Do for Music?”, Medium, January 2018.

McDonald, Heather, “Common Issues Musicians Face in the Industry”, The Balance Careers, February 2019.

McGrath, Stevan, “Will Blockchain Technology Be a Music Industry Savior?”, Single Grain, July 2019.

Shilov, Kirill, “Why Blockchain Might not be the Perfect Technology for the Music Industry”,  Hackernoon, November 2018.

 

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