Integration of Blockchain Technology in The Music Industry


As it stands today, the music industry has gained a reputation for being in chaos when it comes to authentication and compliance. We are at an age where distributors such as SoundCloud, Apple Music, and Spotify enable online streaming, holding a vast amount of power over the industry. Statistics show that 75% of the industry’s revenue has its sources from digital downloads of music.

When we pay a low monthly fee to service providers, we assume the money goes directly into the artist’s hands. However, these fees usually pass through so many middlemen that the artists barely get a portion in the end. These artists lack enough insight on how to identify and cover the gap between sales and revenue collected, leading to revenue leakage. Traditional contractual settings still upheld in the industry are the cause of this mess, and it’s estimated that $2.5 billion royalties go uncollected every year.

It’s with this in mind that the industry and artists have taken to live performances to drive up revenue collection.

The live music industry has a projected worth of 31 billion by 2021. The artists and labels are now investing in producing merchandise and scheduled tours to boost their income. However, this is at the expense of consumers who end up paying for expensive tickets and sometimes traveling long distances just to see their favorite artists.

These are just some of the many problems that plague the music industry, and it’s clear that most of them are due to lagging on adapting to new technology. So can the blockchain help overcome this gap?

Blockchain Technology Outcomes in the Industry

In the last decade, album sales have gradually dropped and reached an all-time low of 32 million in 2018. This stranglehold on the industry is affecting artist income, which causes a domino effect on the overall quality of content produced.

Blockchain is looking to bridge this gap. The technology features decentralized and immutable ledger systems that could untangle the webs choking the music industry. Let’s look at some ways the industry can benefit from blockchain technology.

  • Smart Contracts

Songs are unusual intellectual property in that they have an average of two copyrights, instead of only one. Seeing as most songs don’t have the same singer and composer, these copyrights then belong to one of each artist involved, unless the same artist does both jobs. Therefore, it becomes quite challenging to figure out how payment is distributed and shared among these artists.

This is where blockchain smart contracts and automatic payments come in. The technology will ease the payout process and determine what the artists get based on their commitments. Inefficient and non-transparent royalty payouts would be a thing of the past.

  • Tokenization of Smart Tickets

In the current industry, digital music streaming possesses up to a possible 50 intermediaries between the artists and the consumers. Ultimately, this causes a disconnect between consumers and artists and also leads to loss of revenue.

Blockchain is known for its lack of intermediaries and needs for any centralized systems. The tokenization of smart tickets by content creators on the platform will give the artists a direct connection to their consumers. Furthermore, these tickets will ease tracking of their content viewership, and sales of merchandise will be recorded and verifiable on unaltered ledgers.

Content creators will finally be easily compensated for their work and be more in touch with their consumers.

  • Proper Rights

One of the most complicated sectors of the music industry is the laws of ownership. The creation of a song involves so many artists all working on different parts from lyrics to audio engineering that the whole thing usually ends up owned by several people.

The distributed ledgers in blockchain technology hold all records of a transaction within a blockchain and cannot be altered without being noticed. Therefore, these ledgers may be used as clear evidence of ownership and prevent legal battles in courts between artists and labels.

The blockchain platform can also act as a standardized way of proving ownership between several companies that have different requirements and wording for the property.

  • Redistribute power to the artists

There are blockchain startup companies that want to use the technology to redefine the industry by allowing artists to function as their label, publisher, and accountants. They seek to give power to the artists by introducing them to blockchain-powered streams, cryptocurrency charged tickets, and providing a decentralized music infrastructure for their business.

Potential Challenges

In theory, blockchain technology can fix all the problems faced in the music industry. However, several issues hinder the creation of a global music platform based on blockchain technology. For the ledgers to track information of all artists and their labels, data needs to be released to the platform. Unfortunately, not only are the organizations and labels involved most likely to be hesitant to release the information, but it’s also going to be a challenge to integrate the massive amounts of data from diverse databases. It’s also untested whether blockchain can handle data at such an astronomical level.

Furthermore, not all artists would be interested in doing the work of the middlemen like accounting and following up on their merchandise. Some of these middlemen, like managers, ease the artist’s work and do whatever jobs the artist isn’t interested in doing.


The current digital transformation has created both challenges and benefits to the music industry. As much as artists are finding it easier to share their content and connect with their fan bases, problems like content piracy are also on the rise.

Traditional licensing structures that haven’t been updated to feature digital platform compensation are leaving artists and composers empty-handed.

This is why blockchain adoption is essential as it promises to counter some of these challenges. We won’t know if it delivers on these promises until the industry takes a leap and gives the technology a run. The potential problems it faces are solved quickly enough with its creators initiating a system upgrade for those willing to give it a try.

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