The music industry has always had issues and complications resolving their Royalty distribution system with complaints from artists, record labels, and even rights holders.
Blockchain technology has the potential to rectify these issues and completely revolutionize the music industry’s royalty distribution system.
Here are 5 ways in which Blockchain can be used in the music industry’s royalty distribution System;
Smart Contracts and Smart Royalties
The smart contract is a technology used in blockchain technology. With smart contracts, the entire process is tracked, and each transaction is verified before it’s carried out and recorded as well afterward on the decentralized system thereby increasing transparency, and efficiency and reducing room for errors.
Also, the smart contracts when implemented automate the distribution of the music royalties when the set conditions are met, thus reducing the need for intermediaries and speeding up the entire process of paying royalties to rights holders.
Transparency and Traceability
Blockchain technology creates a transparent and decentralized music rights database and royalty payments, clearly showing what each party is entitled to.
This allows all parties involved, artists, rights holders, and record labels, to have access to a shared, and tamper-proof record of all rights ownership and royalty payments. This way there’s increased transparency and traceability of the royalty’s distribution.
Combating Music Piracy
Blockchain technology can make it nearly impossible for pirates to profit from stolen music, as there is a secured and decentralized record of rights ownership.
Also, a Digital Rights Management (DRM) system can be created that ensures that only authorized parties have access to copyrighted music and subsequently its royalty.
Improved Metadata Management
With blockchain technology, there is accurate and up-to-date metadata, which refers to the data that describes a song or recording, such as its title, artist, genre, and copyright information.
In the music industry, there are often cases of inaccurate and up-to-date metadata, which can lead to problems such as incorrect royalty payments and difficulty in identifying and contacting rights holders.
A blockchain-based music metadata system could help to solve these issues by creating a decentralized, secured record of all music metadata of all stakeholders in the music industry making it easier to identify and access rights holders, and ensuring that royalties are paid correctly.
New Revenue Streams
Blockchain technology can enable artists to tokenize music assets as well as allow them to create non-fungible tokens (NFTs).
These tokens can be issued as a share of the royalties or streaming revenues associated with their music, and people could purchase these tokens.
This creates new revenue models that can help to create more sustainable business models for the music industry in addition to the royalties.
Blockchain technology will also empower independent artists through a decentralized, blockchain-based music distribution system.
This will give them more control over their music distribution and promotion, while also allowing them to discover new ways to monetize their work as well, seeing as their fans can reach them directly.
They also get to decide how their royalties are shared as they are in control of all their music assets.
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