Blockchain Use Cases: How The Tech Is Taking Over The World
In the first of this series, we take a look at common blockchain use cases and focus on how blockchain is radically transforming the music industry.
A decade ago, few would have believed in the disruptive nature of blockchain technology. But in today’s day and age it’s hard to ignore, with the extensive impact of the relatively new phenomenon reaching staggering proportions.
In banking the unbanked, the decentralised technology is revolutionising the way in which the global financial system works. But whilst Bitcoin may be its most common use case, the promises of blockchain go way beyond just crypto.
That’s why we’ve started this series, to showcase blockchain use cases and the many ways in which blockchain is changing the very world in which we live...
Blockchain use cases: the music industry
Traditional industry pitfalls
The global music landscape in 2019 is littered with digital services that enable you to stream and download each and every one of your most-loved tunes, but they all tend to be built upon the same traditional subscription-based model that is inherently unfair towards artists.
‘A major pain point for creatives in the music industry - such as songwriters, producers and musicians - is that they are the first to put in any of the work, and the last to ever see any profit.’
And so whilst you may think that because you listened to Drake, Beyonce and Rihanna last month, your $9.99 Spotify subscription fee will end up in their bank accounts - you’d actually be very wrong.
That’s because it’s common practice for Spotify, as well as the many other streaming platforms, to take a huge share of the revenue for themselves, meaning your money barely even reaches the musicians’ pockets.
And here are the figures to prove it: last year CNBC revealed that Spotify tend to pay between $0.006 and $0.0084 per stream to artists and labels, whilst Digital Music News claimed the same figure for Apple Music was somewhere in the middle at $0.00735.
But with over 150 million subscribers between them, the influence, reach and magnitude of Spotify and Apple Music - two of the world’s biggest streaming platforms - is undoubtedly clear, leaving artists like Imogen Heap with little other choice than to accept the low fees in order to get their music out there.
However, thanks to the magic of blockchain, times are a-changing.
That’s because blockchain technology promotes and creates the opportunity for disintermediation, a process which can be understood as the removal of third-party intervention.
In the context of the music industry, disintermediation therefore creates the potential for listeners and artists to directly connect and exchange music, against a fairer amount that’s far more likely to reach copyright holders in its entirety than through any other model that’s come before.
Imagine then, a new version of Spotify, where artists sharing their music actually receive the amount traditionally siphoned off to the streaming platforms. For many in the industry, this idea has been all but an unattainable dream - but thanks to the blockchain, this peer-to-peer music service can soon become the prevailing reality for all.
Well, it all boils down to the power of smart contracts, but let’s go through the basics of blockchain technology first.
As you may or may not know, a blockchain - in its simplest form - is a record of transactions. These transactions are stored in a series of timestamped, immutable blocks, which are first verified by a network of computers before being added to the blockchain and linked using cryptography.
Smart contacts are a series of terms and conditions, embedded into code that then run on top of the blockchain. This means that the terms of any prearranged agreement between a buyer and seller can exist as part of the blockchain, cutting out the need for a middle-man and allowing for the automatic execution of said terms whenever an asset is transferred or a payment is made.
Putting this into practice, in the music industry specifically, this means that anytime a song listed on a blockchain-based streaming platform is listened to, the fee paid by the user can be directly forwarded on to those named within the contract.
The artists therefore get a fairer amount, as the need for intermediary intervention by the likes of Spotify and Apple Music are completely removed, and users of such platforms are able to listen to their favourite tunes, safe in the knowledge that those responsible for the creation of such songs are being justly rewarded.
Is it the future?
Disintermediation within the music industry is more than just a promising idea; it’s a reality.
From Resonate to Ujo Music, there are a growing number of companies using blockchain technology to challenge the unethical practices of major streaming corporations right now. And whilst there’s still some way to go before they become part of mainstream practice - there’s no denying that it’s only a matter of time until they do.
The truly disruptive potential of blockchain-based streaming platforms is slowly coming to the fore, putting the music industry as we know it on the brink of a transformational change. But that’s just one of the many ways in which the technology can better our world, and just the beginning of our investigation into the myriad of blockchain use-cases that exist.
Stay tuned for more, coming soon on the Cloudbet blog.