The lack of transparency and trust among the various actors means that music fans continue to pay excessive premiums for their favourite artists’ albums. In contrast, artists receive only a fraction of the revenues they should be earning. On the other hand, platforms like the Immediate Edge platform offer bitcoin trading features like accurate and précised strategies for becoming an independent trader.
An environment where rights holders are paid transparently and distributed royalty payments are automated could incentivize increased content production with more realistic consumer prices. Blockchain may not be able to save the music industry alone, but it can improve it.
A blockchain is a powerful tool that can help drive value across relationships in the music industry – from tracking rights ownership to enabling transparent royalty distribution and automated copyrights management – if used responsibly. Blockchain is a website that records transactions on a decentralized and encrypted database management system. Blockchain allows for an immutable, censorable and transparent record of transactions.
Decentralized blockchain technology can provide robust solutions that manage the music industry where it needs to be: in the hands of artists, not marketers or record labels, and where payment is fair – not overcharged to consumers and artists by intermediaries.
Current value chain challenges:
- Lack of transparency across rights holders – in particular across various segments such as labels, publishers, performers etc., all of whom have a vested interest in controlling control over the value chain and associated revenues;
- Lack of standardized rules for rights management (e.g. RIAA and PRS) – which make it very difficult to validate the rights claim;
- Large disparities in revenues received by rights holders;
- Automation of music licensing and royalty distribution – where less than 10% of income obtained by the industry goes towards licensing rights (with a large chunk going to intermediaries)
- Weak copyright protection: enforcement of copyright against infringement is weak and usually ends up being a waste of resources by both police and courts;
- The use of DRM (Digital Rights Management) has also contributed to poor value creation for content producers – as much as $15 billion per year worldwide has been spent on DRM alone;
- Lack of robust marketplace results in sagging revenues, low returns and, in the case of musicians, poor reimbursement by rights holders.
How can blockchain resolve these challenges?
Blockchain for music rights management
Blockchain can offer some benefits to the music industry. Solutions already exist in blockchains, smart contracts and decentralized exchanges that allow for interoperability between the two – and thus, greater chances to capture the value generated by content in the hands of rights holders. 1. Blockchain technology can help organize, control and distribute rights management data more efficiently, allowing for secure record keeping and verifying information such as ownership and allocation.
- Blockchain-based solutions can help rights holders digitally track their song usage and transactions worldwide, bring them into the same legal framework (e.g. RIAA) and ensure that every country covers a fair share of revenues to artists across the value chain.
- Blockchain also allows for the automation of music licensing and distribution, resulting in more efficient and fair rights repartitioning.
- The blockchain is also essential for creating a robust marketplace where the consumer is in control.
- It would also promote free culture as artists would not fear being paid less as others get more royalties for their work (and not suffer underpricing).
Evident proof of ownership:
If all rights holders were on a blockchain that tracks content usage, we could create a trusted and open marketplace and solve many of the industry’s problems – not just for music but for all media. The best part about blockchain is that it is an open ecosystem. Individuals can benefit from using it on their own and from joining forces with others in the industry (e.g. music rights managers).
In this way, we see blockchain as the vehicle that will serve us in creating a modern paradigm of rights distribution and management, where transparency can drive better values for creators and curators of content across the chain.
The blockchain solution:
One of blockchain’s most considerable potential benefits is that people can use it to replace intermediaries, including the music industry. In addition to providing transparency, it also helps eliminate costs and inefficiencies caused by an imbalance of power between intermediaries such as labels and publishers, where they often take advantage of artists because they have little to no choice but to agree on their terms.
Crowdfunding music projects:
One critical use case of blockchain that adds value to the industry is crowdfunding. Imagine a platform where fans can directly invest in musicians and bands – this would create a complete ecosystem where artists are paid fairly, furthering free culture.
Blockchain projects have created innovative tools that allow for a direct connection between fans and musicians, democratizing music funding and increasing payment transparency. In addition to crowdfunding, blockchain could be used by people to manage fees charged by intermediaries such as agents or managers and bring them into a transparent marketplace to incentivize transparency amongst all parties involved in the industry’s value chain.
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