The unsurpassed reach of the Internet and the emergence of a range of new digital technologies have transformed virtually every corner of the music industry for fans and creators alike. While consumers enjoy vastly more options, these market disruptions are presenting a range of important challenges for creators, producers, and distributors of music.
Musicians are struggling to balance their passion for music with the need to be knowledgeable and vigilant about the financial rewards for their talents. Of the $15 billion in global recorded music revenue for sound recordings reported by the International Federation of the Phonographic Industry for 2014, only a small portion of the money beyond the initial recording advances ultimately makes its way to artists as ongoing revenue.
Author: Luke Parker
After a year long study, the Berklee Institute for Creative Entrepreneurship states ”significant funds are often paid to the wrong party,” the institute states. “Anywhere from 20-50 percent of music payments don’t make it to their rightful owners.”
ABI Research predicts that, by the end of 2018, we’ll see 191 million streaming subscribers, generating US $46 billion. In a world where data is readily available and micro-payments can be tracked, accountability should be a foregone conclusion. However, the industry has yet to require services and intermediaries to provide complete, readable, up-to-date data about music sales and uses in an industry-standard format.
A recent report from Deloitte suggests a solution, “blockchain has the potential to disrupt existing but also to enable new business models.”
Blockchain technology’s benefits, according to Deloitte, can be grouped into three main categories; getting consumers to pay more often, tracking copyrights, and increasing efficiency.
An “Increased willingness to pay” is an attainable goal, the report says. “Especially younger digital natives are more willing to pay a few cents for a music track they favor than to be charged a flat monthly subscription.” The research team went on to explain that “paid content can receive a boost from new, micropayment-based pricing models” that blockchains can enable since today’s credit card processing fees make buying a single music track at a time too expensive.
Another benefit is a blockchain’s ability to track items with a high level of integrity. “Copyright tracking becomes more accurate, as does allocation to media copyright holders and the subsequent distribution of royalty payments,” the report explains. “Copyright infringements and piracy would be nearly impossible.”
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