The next step in the industry Blockchain In Music The next step in the industry By Michael Richardson

What is Blockchain?

Flaws in Today’s Music Industry

Internet-facilitated theft Lack of accountability What artists face Internet-facilitated theft Lack of accountability Bad contracts for artists High barrier of entry Established artists are making less money from sales than ever. Contributors to tracks are not getting appropriate credit. Streaming is overtaking sales and artists make very little money from streaming. It’s very difficult for small artists to break into the industry.

Metadata Track Credit Song Rights Easily Stripped Metadata is the information attached to a song accessible on a computer which details who contributed to it, and contributes to determining who holds what rights over it.

What’s Due to Whom? Contributing artists, album and track titles, producers, and record labels are tied to tracks in metadata. This ensures that all transactions involving that track are appropriately credited.

Metadata is easy to remove from tracks on a single computer, if someone has the software and criminal intent to do so. This deprives all deserving parties of their due compensation for each transaction involving that copy of the track going forth. It’s no longer trackable as their intellectual property. After removing Metadata from a song, the rights holders no longer have visible credit over that song with any transaction involving that copy of the file going forth.

Blockchain as a Solution Smart Contracts Record of credit Metadata problem solved Theft prevention Lower Barrier of Entry Here are some of the ways blockchain can be applied to fix or revolutionize the music industry.

Smart Contracts Every party associated with each song is guaranteed the amount dictated in their contract. Smart contracts immediately split payment without a middle man, so each contributor will be fairly compensated for every transaction. If written correctly, a smart contract would fix the problem of royalties not being respected. Record labels would not be responsible for splitting payment fairly between contributors and ensuring payment arrives in a timely manner, both of which are common complaints from artists in the digital age.

Credit Record Songs can be logged on the blockchain with accurate metadata, creating an infallible record of credits. No transaction involving that track can take place without every contributor being appropriately credited. A Blockchain can store data beyond money transactions; metadata can be logged transparently and permanently when a song is released, so credits and rights will be impossible to strip.

Theft With a transparent, infallible record of credit permanently tied to every copy of a track, unlawful transactions will be rejected. Will illegal file-sharing and copying become obsolete?

Streaming Middlemen Low revenue per stream Artists see low percentage No transparency Trust in labels Streaming is the way of the future, but its current state is bad for artists. Artists rely on middlemen who require fees. Streaming generates very little money compared to purchasing music. Labels write contracts with streaming services which cuts even more money from the artist.

High estimates find songs generate $.0084 per stream The Numbers High estimates find songs generate $.0084 per stream Artists with favorable contracts are unlikely to see more than 20% of that revenue A very liberal estimate says songs average $0.0084 per stream. An 80% combined cut from the Streaming service and Label is conservative; artists are likely to have worse contracts, but we’ll work with these numbers.

Streams Revenue per stream Label Cut A Simple Formula (s x .0084) x .2 Streams Revenue per stream Label Cut Here is a formula for calculating how much an artist with an unreasonably good contract would earn per stream.

Tracks sell on iTunes for $.99 50 Million Spotify subscribers Streaming vs Buying $0.00168 per stream Tracks sell on iTunes for $.99 50 Million Spotify subscribers This is the application of the formula. iTunes should make artists a lot more money, but it’s losing market share to streaming, obsolescence.

Amount an artist earns for 300 streams $0.5 Amount an artist earns for 300 streams Selling songs for $0.99 would earn an artist $59.4 with the same label cut.

How is blockchain already being used in the music Industry? Are these ideas viable in the industry?

Ethereum network, smart contracts Content-addressable data Imogen Heap Ujo Music Features Artists Metadata storage Ethereum network, smart contracts Content-addressable data Imogen Heap RAC Giraffage Ujo Music is a music hosting platform which also serves as a database for music. Blockchain-based, it holds a transparent record of rights for all music on the platform. It features some notable artists already, plus thousands more.

Direct listener-to-artist payment Transparency in all transactions Choon Streaming service Direct listener-to-artist payment Transparency in all transactions Music streaming service Choon bills itself as a payments ecosystem. Fans have option to pay currency to an artist to be spent specifically on more creative content.

Direct Transactions 80% of revenue per stream to Artist No record label cut (s x .0084) x .2 (s x .0084) x .8 First is the Old formula shown before, calculating how much an artist might earn from traditional streaming services. If Choon generates the same amount as Spotify per stream, which is unlikely considering how low the number is, this is the formula to calculate per-stream revenue per artist.

Amount an artist earns for 300 streams on Choon $2.02 Amount an artist earns for 300 streams on Choon This is a 400% increase over Spotify, and this is a conservative estimate; if Choon generates more than $0.0084 per stream, which is likely as cryptocurrency increases in value, this revenue will increase even more for the artist.

Choon streaming 5,612 artists as of June 2018 Is it working? Choon streaming 5,612 artists as of June 2018 High profile support and coverage These are just some of the big names reporting on those two organizations. These services are attracting high-profile attention.

Benefits for Growing Artists More accessible to fans Rights guarantee Revenue More from streaming Faster Streaming and hosting services with better publishing features and payment methods allow small artists to earn money from their music immediately. They will hold credit over their music and be paid a reasonable amount for streaming, unlike the situation most small artists face today; artists often resort to giving away their music for free just to attract more listeners since conventional streaming services are expensive and don’t guarantee any publishing credit.

Artist/Fan Interaction

Potential Application Artists may stipulate that fans who actively share music automatically receive a dividend from that song’s revenue Allow closer relationship between an artist and fans Incentivise cooperation and outreach by both parties Blockchain could strengthen the connection between fans and artists by giving payouts to fans who promote an artist’s music. It would really be an “ecosystem”- both artists and fans could benefit from each other.