It’s not that things have gone quiet around blockchain. It’s just that things were really loud when it was being touted as a silver bullet to all of the music industry’s productivity.
Meanwhile the technology is reaching its plateau of productivity, so let’s take a quick look at what’s bubbling up among the initiatives leveraging blockchain technology in the music space right now.
(If you need a primer on blockchain, read my 2016 piece “The Music Industry Isn’t Ready For Blockchain” in which I shared my skepticism about the silver bullet way of thinking at the time)
The following is not intended to be a complete overview — if you’re doing something in this space, feel free to put yourself on my radar by pinging me on Twitter.
Music rights
Ownership of songs can famously be complex. One of the startups trying to solve the problems around this is Verifi Media (formerly Dot Blockchain). This year the company partnered with music distributor FUGA to let its users register their (meta)data on a blockchain that tracks changes to proprietary data. Then, Verifi partnered with rights management platform Unison Rights bringing together rights metadata on the work and recording level.
The promise of the use of blockchain in this space is that changes to data can be made real-time and transparently, which also creates benefits for faster and more accurate reporting and payments.
Cryptocurrency
Facebook’s long-awaited ‘stablecoin’ Diem (formerly known as Libra) could launch as early as January. One of the Diem association’s members is Spotify, which has long shown interest in the space. They’re furthering their commitment now and are looking to hire someone to their payments strategy & innovation team that is specifically focused on digital assets such as the blockchain-based Diem.
Rapper Lil Yachty is the most recent star to launch their own cryptocurrency, called “YachtyCoin”. The token will allow fans to earn perks similar to things you might see in Patreon tiers or Kickstarter rewards. How exactly is still unclear. The token is powered by Fyooz, a platform that encourages creators to ‘become a token’.
Decentralization
In the case of Audius, a blockchain-based streaming platform I’ve written about (a lot) recently, blockchain is used to distribute value more directly between participants of the platform (e.g. artists and listeners). Their tokens also allow users to participate in the governance of the platform — creating a more decentralized approach to platform-development than the status quo of streaming — akin to common practices in open source software.
Marketplaces & Non-fungible tokens
Through tokenizing the trade of goods, market places such as Foundation and Zora (the latter of which recently raised $2M) allow creators to participate in the secondary market of limited-edition goods. The latter launched a token with musician RAC, which is built on Ethereum (a popular blockchain for cryptocurrencies) and is rewarded to his “most loyal fans”. Holders of the token, which can only be earned and not bought, will have exclusive early access to new merch released through Zora by RAC (who’s also an investor in Zora).
Whether physical or digital, so-called non-fungible tokens (NFTs) are used to prove the authenticity of goods and are already leading to sales of digital art for $100k. It could create an interesting avenue for digital scarcity and what 2020 was for livestreaming in music, 2021 could be for NFTs for high profile artists. New startups keep popping up, like Catalog where artists can sell single-edition music recordings and make money off of the secondary trades.
Up until now, these types of experiences would mostly appeal to collectors and superfans due to the associated price tags, but it’s interesting to think about what applications could be for more accessible types of digital scarcity (e.g. creating a song that can only be heard once and then must be sold on through a bidding mechanism).
As music professionals had to figure out models of digital scarcity and unique virtual experiences as a response to the pandemic, those insights can now be used to explore completely new avenues, some of which may be blockchain-based.
Special nod to Music Ally and Cherie Hu whose writing provide an accessible overview of the space.