How blockchain can disrupt the music industry

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The business models that supported the distribution and sale of music in a disconnected world no longer sustain the fluid landscape of file sharing services like DropBox, Google Drive and MediaFire. That’s why since the advent of the first file sharing platform, Napster, in 1999, the music industry has been in constant upheaval.

The introduction of streaming services such as Spotify only made things more complicated.

Piracy and illegal use, dipping revenues and constant feuds over the fair distribution of revenue are just some of the problems that are plaguing the industry.

There’s mutual hatred among all the parties involved and everyone incriminates others for their miseries. But the truth is that with so much opacity and conflicting interests, it’s really hard to lay blame at any single entity’s feet.

But one thing’s for sure, and that is artists, i.e. composers, musicians, singers, etc., aren’t getting their due, and while they’re contributing the principal effort to create art, their compensation does not reflect that contribution.

This is something that might change with blockchain, the technology underpinning Bitcoin and other cryptocurrencies, which can be used as a democratized infrastructure that can support the management of assets and rights ownership.

One of the most attractive characteristics of blockchain is the fact that it is owned by no single entity and is transparent for all to see. The paradigm is already showing promise in other settings where records are kept of ownership and the transfer of it, such as the increasingly complicated supply chains underlying the production and distribution of goods across the world.

As a distributed ledger that can securely and irreversibly record transactions without the need for a central authority, the blockchain can transform the publishing and monetization of music as well as create a direct relationship between artists and fans.

Artists can publish their content on a public blockchain, where a unique ID and timestamp are stored on a record along with metadata such singer, composer, ownership rights and other relevant information.

With transactions that are ultimately unalterable, blockchain can ensure that the proper people are credited and eventually compensated for the content, and can also solve the problem of counterfeiters downloading and altering digital content at their leisure and republishing it in their name.

Further expanding on this model, the blockchain can also transform the monetization of music content. First of all, as opposed to traditional electronic payment methods, cryptocurrencies such as Bitcoin and Ethereum support micropayments because transfer fees are infinitesimal.

Also, blockchain supports smart contracts, or bits of code that can be executed automatically after payments are made. The combination makes it possible to develop new on-demand music services, where content is requested and paid-for on the blockchain, and the rights-holders get directly compensated through cryptocurrency transactions.

Record labels take a huge cut of music profits. Streaming services, which are supposed to play a fairer game, still have a non-transparent compensation model and have left artists in ire.

The blockchain can make it possible for content creators to establish a direct relationship with their fans. This is especially convenient for amateur artists who can’t afford or wait for a huge record label to sponsor them, or those who aren’t trustful or satisfied with how streaming services operate.

With requests and payments being transparently registered on the blockchain and available for public review, evaluating trends and popular music will change as well. The blockchain will thus provide a platform where amateurs can compete with the pros and independently tread their path to becoming stars.

While the blueprint for blockchain and music solves some of the rights management issues, the issue of piracy and illegal distribution is a bit more challenging to deal with. Without necessary safeguards and measures put into place, there’s no guarantee that the blockchain model will be enforced and used.

There are generally two approaches that can help overcome this challenge. One includes the development and rollout of codec and music formats that will be tied to the cryptographic hash and information stored on the blockchain and won’t be consumable without access to the blockchain.

Another approach will be to provide incentives to encourage users to publish and consume their content through the blockchain. Again, the blockchain’s nature and its ability to handle microtransactions offers a lot of possibilities and opportunities.

There are already several initiatives and projects that are exploring both venues, and I’ve covered some of it in an article I recently wrote for TechCrunch, where I examine a protocol, a file-sharing platform, and a distribution and consumption ecosystem, all based on blockchain.

I’m still amazed at the disruptive power lying in the blockchain, and its potential to change computation, business and life as we know it today.

In the music industry, it can overturn the tables and give power back to the people who deserve it. I plan to further explore other areas it might affect in the coming months.


  1. Great article. We fully believe in the power of the Blockchain not only in music ,but in others areas such as improvements in 3rd world living standards

  2. Hi Ben, I am an MBA student from India working on an academic project that deals with applications of Block Chain in music industry. I have certain queries regarding the working model pertaining to music industry and would like to hear your views on them. Regards.

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