Bitcoin by itself, as a currency, may not have a significant impact on the music industry. It can be viewed mostly as just another way to make payments when buying music online or offline. It does not entail anything revolutionary when it comes to changing the way music is consumed and the way musicians and labels profit from their work. However, there’s something about bitcoin that can bring about significant changes.
Giving Artists and Producers Their Due
The biggest problem with the way the music industry works at present is that it fails to properly compensate the owners and producers of music. Music is still a money-making business but only those in the higher bracket of the industry get to benefit. Those in the bottom have to make do with what the influential players are willing to give.
Music piracy is considerably reducing the financial rewards of being a musician. This is made worse by the kind of arrangement music streaming sites have with musicians and record labels. The payment given to music owners whenever songs are streamed online on sites or apps like Spotify and Pandora are very minimal. Then there’s YouTube and other video sharing sites that do not appear to be paying musicians at all for all the music posted on their platform. Every music on YouTube can be accessed for free. There are even videos that feature entire albums.
Musicians and record companies are basically helpless when their properties are freely shared online. It’s very easy to copy and share music files online and nobody seems to be seriously interested in addressing this problem. Efforts to address piracy have mostly been about using ads to discourage piracy and support musicians by buying authentic copies of their records. There has been no serious attempt to employ technological advancements in providing solutions.
Bitcoin Blockchain Technology
So how does blockchain affect the music industry? Blockchain has the potential of finally making it possible to monitor the use of music and for musicians and labels to get credited and paid for their work. Blockchain is essentially a distributed ledger system. When applied to music, theoretically, what will happen is that the music files will no longer be plain mp3, FLAC, or WAV files. They will incorporate the blockchain, which contains records of everything related to the ownership and use of the music file.
Under the dotBlockchain proposal, it will become easier for musicians or music producers to get what is due to them directly from the consumers. With blockchain, music sales will be on a peer-to-peer basis. It seeks to create a system wherein music labels, licensees, and rights holders, streaming platforms, and music consumers transact under a blockchain, taking away middlemen who usually take huge cuts from music sales. At the same time, this system is envisioned to address piracy or the illegal sharing of music.
Using blockchain in the music industry is a promising idea but it would take concerted efforts to make it work. In particular, simply introducing the technology is not enough. Legislation may be required to make sure that loopholes and alternatives do not defeat the blockchain. The industry may adopt the .bc format, for example, but if mp3s are still legal, music consumers will just turn to them for their convenience and familiarity. Hence, piracy will not be addressed although musicians and labels may see improvements in their earnings as it becomes possible to reliably track to some extent the use of their music.
Additionally, once blockchain is integrated with music files, it can become easier to collect payments as music purchases can be paid through bitcoins or other cryptocurrencies on a peer-to-peer basis. This may make extreme caution one of the most important crypto tips to bear in mind, though, as it can become very easy to overspend on music.
Blockchain is a great technology that can benefit the music industry. It can’t cause disruption on its own, though. It has to be complemented by regulation or legislation and the willingness of consumers to shift to a new music format or standard.