Comparable to the development of the world wide web (Internet), the blockchain technology that includes cryptocurrency has some goodies for the music industry. Though initially, the tech had problems when it came to monetizing or registering intellectual assets, creating and implementing contracts, and piracy policing today, it has improved considerably. Because of this reason, many industries, including the music sector, see a brighter future or a worthy solution in crypto payments. And the best part? There is a best cryptocurrency exchange UK in my knowledge.
As different musicians and bands push for fairness and transparency in the industry in other ways, for instance, Sony, Taylor Swift’s issues with Spotify, and Paul McCartney’s lawsuit against Sony, experts are pointing a finger towards the enticing idea of blockchain technology. It has the ability to get the messy house in order.
One main problem with the music sector is that there isn’t a single approved registry of musicians and their works.
Efforts to come up with one have been futile and has cost creatives millions of dollars, primarily at the expense of the CMOs (collective management organizations) such as SOCAN, PRS, PPL, and ASCAP that ensure labels, performers, publishers, musicians, and songwriters are paid for their music. The agencies pay creatives by collecting royalties on their behalf.
This has been a major problem for a while, as indicated by the over $100 million lawsuits Sportify is grappling with.
It is such problems that make crypto payments a viable option for many creatives. Experts state that the blockchain-based trend will be beneficial to creatives and solve various endemic art problems and transform how people consume music of all genres. But how will crypto work?
NFT and Crypto
A non-fungible token commonly referred to as NFT is a type of cryptographic token that records an entity that owns digital content on the blockchain. They are usually located on the Ethereum blockchain; however, others such as Tezos and Flow have also started supporting them.
They are unique, and as the name indicates, they are non-fungible, which means they can’t be exchanged, making them ideal for securing special items like digital art, music, and contracts.
An artist can create their own non-fungible token and then auction them off to consumers, who pay for it using cryptocurrency.
Several people can buy NFT, making having one easily accessible, particularly if it is a big-ticket piece. Musicians and bands can also get royalties anytime NFTs change hands, which puts everything back into musicians’ hands and makes sure that they are appropriately compensated for their art.
How will Audio NFTs appeal to musicians?
Stop misuse of music rights or piracy.
NFT tech, as mentioned earlier, will provide authenticity and providence, meaning it will make it difficult for musicians to misuse each other’s pieces. A good example is the Thong song and Vanilla Ice Saga, where someone else came to own the song decades later.
Crypto will help avoid such expensive court battles. It will also be almost impossible for others to steal music through traditional techniques such as piracy.
Returns control to musicians
The NFT will turn around the music industry from a top-down approach to a down-up approach. The $11 billion Sector is primarily controlled by the globe’s top 3 labels, Universal Music Group, Warner Music Group, and Sony, control the musician’s revenue.
And the worst part is that the revenue is usually divided between various entities such as producers, distributors, and promoters. It also takes musicians a long time to receive mediocre royalties. The low and slow payment aspects are further compounded by the limitations on tours caused by the Covid-19 pandemic.
Because tours and live shows are usually responsible for more than 60 % of their income, most of them look for other revenue options such as crypto music.
Some musicians who are already exchanging digital art for cryptocurrency to supplement their income include Shawn Mendes, Steve Aoki, Grimes, and Kings of Leon. Actually, Grimes earned more than $5 million selling digital art within 20 minutes.
Connects musicians with fans directly
Crypto through NFTs allows music fans to own parts of songs they love while still allowing artists to secure their intellectual property.
It will end ticket reselling in concerts.
The use of smart contracts and NFTs will render services offered by scalpers useless after the pandemic. There are various blockchain ticketing platforms online that ensure the authenticity of digital tickets.
Through the companies, your concert attendee’s identity is confirmed and recorded. Artists also have total control over how every ticket is bought or resold, making it very hard to scalp.
The use of crypto payments is already transforming operations in the music industry. Nonetheless, this doesn’t mean social and environmental challenges don’t exist. However, the good news is that blockchain tech has considerably improved since it emerged, and it is only a matter of time before it becomes the main mode of transaction globally.
Should the music sector overcome the few remaining challenges through proliferation and democratization? Crypto music will be one of the best things that have ever happened to the industry in a century.