We all know the ups and downs the music business has gone through in the 21st century. The near total collapse of physical compact disc sales has seen major retailers simply stop stocking them (indeed the major retailers themselves are in peril). Some record label contracts are little more than distribution deals for the artists. The overwhelming popularity of streaming services has so drastically cut into revenue streams that by the time the record labels get their cut, little is left for the musicians who created the product. Streaming services like Spotify are overwhelmingly popular, but the artists themselves see very, very little profit from these models.
Established acts that have been around a few decades seem to take one of two approaches, they either stop recording albums and simply tour on past hits to generate income, or they go into a frenzy of production. Some veteran musicians are far more prolific today than they were in their heyday, clutching onto a diminishing slice of the pie.
But this may be changing, as nature abhors a vacuum. As Crypto-Currencies continue to make inroads into our collective consciousness, some have already begun to apply the concept to the music industry. I am far from a Crypto expert, but as I understand it the decentralized nature of blockchain technology prevents piracy of intellectual property, while smart-contracts can, in real time, reward those who are due payment.
Think of it, instead of an artist waiting months to receive a report from their record label of what their streaming revenue is, they can see daily how much of their music was purchased or streamed, how much money was generated, and who it is being distributed to! One thing that will have to be settled is which currency will be used. The early giants like Bitcoin, Litecoin, etc. may be huge in ten years, or may be obsolete. Another aspect is systems like Ethereum, which is more for smart-contracts than a store of value like Bitcoin.
So, if the current “Wild West” nature of crypto can be successfully applied to the industry we may again see musicians being paid a living wage for their efforts. On the upside, the current crop of young musicians are now so used to self-promotion they should flourish under a new system.
How will this affect the major record labels? If I had to guess, they probably already have at least one toe in the water to test the feel of blockchain feasibility. One thing is for sure, even if a new decentralized system helps musicians once again see the fruits of their labor it won’t take long for a new type of middle man to appear. After all, nature abhors a vacuum…
Up and coming artists like Griffin Tucker (pictured) could potentially see more revenue from a new crypto-currency payment model.