A New Way Artists Could Be Paid From Music Monetization
Cryptocurrencies and blockchains are altering digital markets across the globe and it seems it might change music monetization sooner than later.
When artists think about music monetization, they usually think music distribution or music streaming services. As of now, it’s the way to go, but there’s always a middle man involved taking credit or a cut for the art they didn’t create. It’s been this way for a while but there will come a time where that will change. Just as use of record labels and the sale of hard copies are diminishing, so will the era of music streaming as we know it today – that being Spotify, Apple Music, Tidal, etc.
Over the past few years, select artists and companies have been experimenting with cryptocurrencies and blockchains as a means of distributing and music monetization. Just the thought of these words may send shivers down one’s spine but fear not, this article will shed some light onto the subject in the most simplistic way possible so we can delve into the topic of how cryptocurrencies and blockchains may very well reshape the music industry. Keep in mind, although cryptocurrencies are fairly popular these days and well organized, implementing them in the music industry is a highly experimental process – there’s a chance it will never become a reality. But it could be a game changer in music monetization that could affect every musician for the better so it’s worth learning about.
Cryptocurrencies: There are thousands of of them, but the most popular one is Bitcoin. It’s a virtual currency exchange system that requires no intermediaries (middlemen) to make the transaction. It’s called a peer to peer transaction because there’s no bank, company or middleman mediating the exchange. This money cannot be replicated and, in most cases, every transaction made is recorded and open for the public to see, a.k.a. blockchains.
Blockchains: The record in which all of the transactions are kept. Since there is no middle man, or a centralized government, all of the transactions made with one type of currency are technically stored across the internet, or cloud, on all the users computers, making it near impossible to hack in secret. There are also people that check to make sure there’s no funny business with peer to peer transactions and they are rewarded with cryptocurrencies, not a cut of the transaction itself. Once the transaction is verified, it’s linked to the transaction made minutes before by two separate parties. This way if one ‘block’ of transaction history is tampered with, the rest of the ‘blocks’ before have to be tampered with as well. There’s millions and millions of them and as far as we know, no computer or person is able to mess with it.
If this still doesn’t make sense, which is completely understandable, check out John Oliver’s explanation of it from Last Week Tonight. It’s a hard subject to sum up in a few paragraphs so don’t be deterred, John makes it easy for everyone. Warning, there is profanity, but it’s tasteful and hysterical.
How does all of this affect the music industry?
If listeners were to use cryptocurrencies and blockchain platforms as a means of paying for music, it could ensure that musicians get the money and credit they deserve without having to cut shares to music distribution companies and labels. The public display of knowledge, or blockchain concept, is also a big selling factor of all this. Having information open for discovery means everyone gets credit for the work they did and are sure to get some kind of compensation for it, from producers to backup singers. Obviously, the platform used for this market differs greatly compared to blockchain used in cryptocurrency sites, but the idea behind publicly linking information together amongst a vast network of computers, theoretically, is the ideal way of distributing and monetizing music. One musician has made a prototype of this method and although she did not turn a much of profit, she has made great strides in proving this systems potential.
Imogen Heap is one of the biggest proponents of this method. She is widely known for her song, “Hide and Seek” and has generated a vast following since then. She hoped her fans would follow her in a new direction of using cryptocurrencies in order to sell her music, and although she did turn some profit, she mentions that she believes some people lost interest when it came to setting up accounts and getting used to an unfamiliar platform.
Heap created Mycelia, a fair-trade music business. She is now working on creating a “creative passport” – a digital document that holds musician’s personal information and discography. The passports should become a reality sometime next year and will be held in a cloud based computer along with a theoretically un-hackable ledger as well as ‘smart contracts’ that allow easy and direct payments without intermediaries.
As said before, she did implement this idea with the release of her song, “Tiny Human.” All parties involved are listed in a Dropbox document. A perfected version of this method would mean that they all get the credit and, when appropriate, compensation that they deserve. The list of information is shockingly expensive. It includes everything from who helped write the song to the equipment used in the recording process. Although helping those ‘behind the scenes’ people get the recognition they deserve, this will really help properly and evenly distribute funds throughout the entire production team. Again, this is a very crude method of realizing her dream but the fact that the song and info was released via this platform should instill a warming feeling in the souls of musicians.
Theoretically, anyone can monetize and distribute their music this way. The process was a bit smoother for Heap because of her established following, but with the proper publicity and the power of social media, it is entirely possible for aspiring artists to use this platform as a means of monetizing and distributing music. Heap suggests this: instead of in a URL ending in “.com” this new network could be stored in “.music.” For example, imogenheap.music would be a site where she keeps all of her music, info on the music and who helped make it. Listeners could then buy her music and download a copy of it to be played on whatever platform the like. If any type of content or merchandise were to be purchased with her own cryptocurrency on the site, the funds would move their way throughout the site to the proper people. Why not just a credit card to purchase things on this site? Well someone has to pay for the fees to process the transaction. That info can also be sold to third parties.
Again, this is a highly experimental with a high probability of failure, but if this succeeds, it could change the entire music industry. That’s not really an over exaggeration either. Major labels and distribution companies could go out of business and may finally lose their firm grip on the industry, and most importantly, musicians would be able to make an honest profit from their music that they are absolutely entitled to.
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