What Is The Blockchain & How Will It Change The Music Industry?
Technology continues to advance at an unprecedented rate, and with it comes new opportunities.
Some musicians have found success by keeping tabs on the latest social media platforms or apps and being “first to market”. If you’re the right act with the right sound at the right place and time, this can work.
But when you stop and think about it, you quickly realize this is mostly a false economy. Jumping from one platform to another hoping to be discovered is an uphill battle, and only a small number of acts will ever find success this way. Most artists would do well to stay consistent in their efforts of making music, performing, improving, building their fan base, and repeating this process until they find their stride.
This isn’t to suggest technology isn’t worth keeping pace with. As I’ve said so many times before, it prevents you from becoming a Blockbuster in the age of Netflix. Falling behind can be a serious matter for any business. And isn’t being a musician a lot like running a business?
One technology you should keep an eye on is the blockchain, as it holds the potential to transform industries.
But first, if it's your aim to do music professionally, you'll want to check out our free ebook while it's still available:
Free eBook: Discover how real independent musicians like you are making $4,077 - $22,573+ monthly via Youtube, let me know where to send the details:
What Is The Blockchain, Isn't Is All About Cryptocurrencies?
If you’ve heard of Bitcoin, then there’s a chance you’ve heard of the blockchain already. Most people associate the two, and sometimes even view them as being one and the same, though they aren’t inseparable.
As it turns out, the blockchain holds considerable potential for a variety of applications – not just Bitcoin and the different types of cryptocurrencies, but for any type of transaction. And, what’s common across most if not all types of businesses? Transactions.
So, what is it and how does it work?
Well, you don’t necessarily need to know it inside and out to take advantage of it. So, I’ll attempt to explain it as simply as possible. There’s no need to get into too much depth.
The Blockchain is a self-updating database, a massive spreadsheet that’s duplicated across a large network of computers. When transactions happen, they are replicated across the entire network, which makes it easy to verify each transaction with precision and accuracy.
In effect, the Blockchain is a record-keeping tool. The advantage of storing information in this way is that it’s public, decentralized, verifiable, secure, and accessible by anyone with an internet connection (again, don’t worry too much if this doesn’t all make sense).
The blockchain ledger could help keep track of everything to do with your art and the ways in which people interact with it, which could mean some amazing things for you as a musician.
But what exactly are the benefits? Read on.
How Can The Blockchain Change The Music Industry?
You’ve gained a basic understanding of what the blockchain is. But what is it about the Blockchain that has the potential to change the music industry? Why do so many people want to see it applied to the business of music?
Why The Music Industry Is Broken
First, it’s important to understand what some of the issues surrounding the industry are. If you’ve been an artist for any length of time, then you are already painfully aware.
One of the main challenges of the music industry is that there is only so much money to go around, or at the very least, most of it is being controlled by labels and big companies. Most artists only ever keep a small piece of the pie.
It’s undeniable that record labels have value. But what they offer is largely tied up in the business side of music. What entitles them to a larger piece of the pie than artists? They’re mostly uninvolved in the creative and performance side of art, which is hard work. Why do they make more than artists? Why do they keep such a large percentage of what artists work so hard to make?
The industry is not there to benefit everyone, and generally, the artists are the last to be rewarded for their work.
If that wasn’t enough, other entities often take a cut too – publishers, distributors, and so on. No, they may not be evil, but it’s not hard to see why artists become disillusioned by the many companies that have a hand in their pockets.
How Ben Dickson Believes The Blockchain Will Change The Music Industry
Ben Dickson is a software engineer and founder of Tech Talks. He has an article on TechCrunch called “How blockchain can change the music industry”. Here are some of his thoughts on how he believes the blockchain will positively impact the industry:
- Since music can be assigned a unique ID on the ledger that can’t be altered, the right people will always be rewarded for the content they’ve created and rightfully own.
- The blockchain makes micropayments possible, so artists could potentially be rewarded immediately for streams or plays. As a sidebar, I think this is one of the most exciting aspects of the blockchain, and believe that artists could potentially be rewarded for their content in a variety of ways, not just when someone plays their music (such as when someone creates a remix of their track or uses it in a video).
- The blockchain could help artists get compensated directly. Right now, there are always companies taking a cut of your sales, whether it’s a label, publisher, or distributor. The blockchain could do away with the intermediaries and once and for all make you a true independent
How Imogen Heap Believes The Blockchain Will Change The Music Industry
Imogen Heap probably requires little introduction – she’s an English singer-songwriter, producer, and engineer that primarily creates electronic music. She’s been outspoken about the blockchain for many years.
She has an article titled “Blockchain Could Help Musicians Make Money Again” on the Harvard Business Review. Here’s what she proposes:
- The blockchain could make it easier for the layperson to license and collaborate with your music, such as when they use it in one of their YouTube videos. With the blockchain, you would be rewarded immediately, of course.
- The blockchain would provide more transparency for artists. As it is, it’s hard to figure out how your royalties are even being calculated, and how much of it is being taken by third-party companies.
- The blockchain would make it possible to track all the music content that is created and how it is used. Performance Rights Organizations do their best to keep record and pay out royalties to rights owners, but it’s a challenge. Their job would be a lot easier with the help of blockchain technology.
How George Howard Believes The Blockchain Will Change The Music Industry
George Howard is another outspoken individual when it comes to the subject of the blockchain. He’s an Associate Professor of Music Business/Management at Berklee College of Music and Brown University, Co-Founder of Music Audience Exchange, and much more.
I’ve had the opportunity to talk to George about the blockchain on the Music2020 podcast.
George has written many articles on this subject. I’m going to look at one that’s been published on Forbes, called “The Bitcoin Blockchain Just Might Save The Music Industry…If Only We Could Understand It”.
Here are some of the key points from this article:
- George proposes that the blockchain holds too much potential in the realm of intellectual property to be reserved strictly for currency. As we talked about earlier, the blockchain is a massive online ledger, suggesting that it’s good for keeping track of numbers. But it’s not hard to see George’s point, that it could also be used to keep record of content.
- If the blockchain is capable of thorough and detailed record-keeping, it would suggest that rights holders would be compensated more fairly, more immediately, and most of all, more accurately.
- More transparency would mean access to more accurate information. More accurate information would lead to better decision making, and more deals and transactions.
- George believes it is critically important for artists to gain a better understanding of the blockchain, as failing to do so could mean getting taking advantage of by those who do understand and utilize it. His point is well-taken, since artists have a history of being exploited.
Will The Blockchain Change The Music Industry?
Now, you might be wondering what I think about the blockchain and whether it will change the music industry.
In general, I think it holds massive potential. But there are some major issues to be worked out if it were to succeed.
I’m not one to focus too heavily on the negatives, but here is just a small sampling of some of the things that would need to change for it to have the kind of impact other industry people have shared about (many of these points were proposed by Alex and Don Tapscott who wrote the weighty tome, Blockchain Revolution):
- People generally don’t understand what the blockchain is, or how it works. There are many bullet points under this single point. Basically, the blockchain is not user-friendly. This point goes back to George Howard’s article as well.
- The blockchain is a large network of servers, making it a massive energy hog. Therefore, it’s simply unsustainable. This could change in the future, but for the time being we don’t have the energy resources to make it a reality.
- The government could halt progress. One, with the blockchain being decentralized and transparent, the government may not like what they see when this global ledger reveals all transactions relating to a specific sector. Two, the blockchain doesn’t have formal oversight. Three, the government and major companies may want to spy on you and control the network.
- Powerful companies could take control of it. This also goes back to a point George Howard made in his article. If the blockchain is indeed a technology possessing massive potential, it means that it could be just a matter of time before big companies (or in the case of the music industry, labels), take control of it.
Again, I’ve only shed light on a few major issues relating to the widespread usage of the blockchain. There are others to consider.
So, while I don’t want to be negative Nancy, and I do think the blockchain could change the way the industry works, I also believe we must be practical. In the immediate future, there are reasons why the blockchain simply cannot be deployed at the scale some of the above authors believe it should be.
Here’s the counterargument, or rather the reason to hope. Human beings can solve massive problems. Throughout our history, we’ve encountered issues seemingly too big for the human mind, and lo and behold, we found a way to make it work.
There may be major obstacles to overcome, but if there is enough interest in the blockchain and its potential, then truly it’s only a matter of time before we as humanity develop the proper supporting structure for it to work the way we envision it should.
Do you feel like you’ve gained a better understanding of what the blockchain is? Do you now see why so many people are looking to it to save the music industry?
It’s one thing to talk about it idealistically, and quite another to observe how it works in practice. Until it is applied to the industry, it’s hard to know exactly how it’s going to play out. But if you know what it is and how it works, it’s hard not to see its potential, and I believe that’s why there are outspoken individuals advocating for change.
A more transparent industry benefits everyone, though big companies may not see it that way. Of any industry, it seems like the music industry is the least transparent, and it’s hard to make sense of the limited data we do have access to.
Will you join those who believe the blockchain is the solution? Will you stand by and wait to see what happens? Will you oppose its progress? What do you think the blockchain will do for the music industry, if anything?
P.S. Remember though, none of what you've learned will matter if you don't know how to get your music out there and earn from it. Want to learn how to do that? Then get our free ‘5 Steps To Profitable Youtube Music Career' ebook emailed directly to you!