Why Blockchain is the Future of the Music Industry

Why Blockchain Future Music Industry

Musicians make up one of the largest groups of starving artists in the world. In 2020, musicians only gained 12% of the $43 billion generated in the industry, according to the Citigroup report. By comparison, the athletes in the NFL or NBA take home almost 50% of the industry’s revenue. It appears that while the music business is still very much booming and makes billions of dollars, its main protagonists -the musicians themselves- are getting just desserts by earning little from what they sow.

Why blockchain is the future of the music industry

Did you know that to earn $1000 a month on Spotify, a musician needs to have around 120K streams per month and hold all the track’s rights (rarely the case)? Spotify pays between $0.006 and $0.0084 per play, while for artists, producing and promoting music involves so much hard work. However, this work does not guarantee success and sometimes might feel like a waste of time.

Upcoming musicians are challenged to find innovative ways to fit into the new paradigm and build an independent career, often avoiding the mainstream world and accepting to be more profitable at the cost of creativity and fame. Is there a solution to fairly reward musicians for their hard work and encourage them to create more? Yes, this solution is blockchain technology, and this article will show you why blockchain is the future of the music industry.

How can we use blockchain in the music industry? 

Blockchain technology is one of the most effective ways of storing transactions thanks to its immutability, unalterability, and transparency. What’s more, blockchain reduces the cost of trust. As a result, you don’t have to pay someone in the middle to verify that a transaction has occurred.

Here is what blockchain can do for the music industry.

Cut out the middlemen

One of the best things the blockchain can do for musicians is to cut out the middlemen from music sales (think record labels and distributors) and centralized music streaming platforms (think Spotify). While music streaming platforms have revolutionized how music fans listen to their favorite artists, they also created a whole new level of intermediation between music creators and consumers.

We already spoke about meager royalty payments. However, there is also an issue of late and inaccurate payments and artists, like this one, waiting for months to get paid. Blockchain and smart contracts will enable immediate and accurate payment to the artist after each sale or stream with no middlemen delaying or taking a portion of this payment.

Intellectual property protection

Whatever type of intangible media you create, blockchain guarantees your IP rights as an author or creator. The current system makes it easy to steal your content online and fails to protect IP rights. With blockchain, once an artist releases a song on the ledger, it has a unique ID, which protects it from fraud. Since we can’t change data on the blockchain, it ensures transparency and traceability, allowing creators to control their work. For example, blockchain makes illegal downloads of a song impossible and enables the creation of a global database of rights, ownership, and rules.

Today, there is no public or private space to verify music ownership rights. Why is it a problem? For example, one of Beyonce’s albums had more than 70 songwriters and 100+ contributors working on it.

Beyonce Lemonade

Image via myvalleynews.com

Who is responsible for paying their royalties? The middlemen (Spotify, Apple Music, etc.)? However, they need time, effort, and human resources to solve such a complex challenge. Sometimes confusions and errors lead to multimillion lawsuits against streaming services. Apple Music and Spotify need to keep their profits high to be able to operate.

Blockchain and smart contracts can automate this process by allowing artists to create an immutable record listing all their contributors, producers, and others who participated in the creative process of music files. Every time music files are transferred on the blockchain; this data stays intact. On the contrary, in the current online world, music file data can be altered or removed with no trace.

New revenue sources for musicians

Anote Music

Independent artists with a strong fan community can have constant financial support from their fans thanks to blockchain. For example, ANote Music, a Luxembourg-based startup, launched a blockchain-based platform to open for artists new opportunities for accessing capital. The platform allows users to invest in music royalties, and buy trade music royalty shares on a secondary market. ANote aims to create a stock exchange platform for music investments and become the leading music rights marketplace.

Another exciting project is opulous.org. They enable fans to invest in emerging musicians and their songs,  and buy trade music copyright shares as NFTs. Opulous also offers musicians quick access to cash with DeFi loans backed by real-world music assets and future royalty payments.

How can blockchain change the music industry?

Now that we understand how to use blockchain in the music industry, let’s look at how this technology is already changing this business.

One standard across all music databases

Current music file standards

Today’s music industry consists of up to 5000 databases with little to no interoperability, meaning that if you mention a songwriter in one database, it’s not going to synchronize in another. Stakeholders in the music industry don’t share their data nor use a standard music file format.

Today’s most prevailing file format in the music industry is WAV, which is 27 years old. Today not many people utilize faxes and letters, but we still use WAV and MP3. These file formats do not allow creating, maintaining, and transferring comprehensive, unchangeable records about music rights holders and contributors.

Let’s think about how shipping containers revolutionized global trade, fueled a 780% growth in commerce and made the cost of many goods more affordable. Why? Because all containers have standard dimensions, subdivided interior, multiparty, trackable ownership, a complete history of the container movements, etc. in a single database. These standards dictated the measurements of every truck, ship, train, crane, even port.

What if we could have the same unified standard in music technology? With blockchain and smart contracts, we can create a standardized music file container carrying synchronized media files, ownership rights, metadata, and music licensing information. Blockchain allows us to establish a standard file format unique to the music industry, enabling tracking, communication, and monetizing using smart contracts.

Verifi Media – a blockchain-backed music ledger

Verifi media

Such a protocol exists, and it’s Verifi Media. Artists can create a dashboard for every song that will contain licensing information, publishing info, version history, and a provenance trail on this platform. Each track has a unique Verifi Media ID and a blockchain address.

Similar to how we have protocols to build websites, mobile apps, Verifi Media is a protocol that allows artists and producers to efficiently release music by creating a dashboard for every song. Then, if you want to use this song for your movie, advertisement, or YouTube video, you can message the participants within the song dashboard and purchase the license directly. Songwriter, remix artist, singer, and every music rights holder will be paid through attribution, and we will avoid lawsuits like this one.

Blockchain formats for music files

Blockchain keeps all this history for future references. This data can be replicated, synchronized, and accessed in a decentralized system. Each new media file, each change to this file will permanently remain on the blockchain, creating a common language for the music and media industries. Now, with so many smart contract platforms available, we can build dApps for streaming or decentralized analogs of YouTube on top of this protocol.

Fair distribution of royalties

For decades, physical distribution was the only way for fans to discover music. You bought CDs, DVDs, tapes, vinyl, and other physical objects to deliver music to your location. It was easy to track where and how many albums were sold and calculate the number of royalty payments. The digital era brought music downloads. In the 2000s, it became easier and cheaper to download a track than to go and buy it. As a result, we’ve seen piracy flourishing and artists being stripped of royalty payments.

Streaming platforms revolutionized and revitalized the music industry. It became cheaper and faster to stream a track than digitally steal or download it. It changed how artists receive royalties. For the first time, royalties became evergreen. The more people listen to the track, the more royalties artists receive. However, there is no physical way to track this because of too many parties involved.

The problem with music streaming platforms

Usually, the artist delivers his music to the record label (unless it’s an independent artist). Then the label gives it to a distributor, who formats all the data and uploads it to music streaming platforms. Independent musicians still need a distributor to get their music on Spotify or another platform. Streaming services then report the number of times a track has been played back to the distributor.

It’s not uncommon that the actual number of music streams does not match the number of royalties that artists receive. Streaming services self-report their numbers. With 600+ music streaming services worldwide, playcount auditing became a burdensome task. Playcounts can also be hacked and faked, like in the 2018 case when “fake artists” were getting fake plays on Spotify.

Another challenge is that, more often than not, centralized music streaming services act like search engines. And, as with any centralized search engine, there is an algorithmic bias that might give more exposure to some artists or tracks and neglect others. Decentralization opens doors for censorship-free search so that everyone can have equal chances to be found based on relevancy to the search query instead of being pushed by an algorithm.

The current music industry is too bloated with tons of intermediaries, all taking a piece of the cake with almost nothing left for musicians; centralized music streaming services are inaccurate, unsafe, and vulnerable to malicious agents. We all need a platform that will put power in the hands of artists and fans and streamline royalty payments. And one such fully decentralized music platform is Audius.

Audius – the future of streaming


In an industry where nobody trusts each other, blockchain offers trustless participation to all parties, including fans and artists, while maintaining their data integrity.

Audius is a blockchain-based, fully decentralized streaming platform. It is backed by names like Dead Mouse, 3LAU, Avicii’s former manager, Twitch’s co-founder Justin Kan, and others. Unlike Spotify, Apple Music, and others, it’s not hosted on corporate servers that Audis owns. It’s completely decentralized and operated by nodes located worldwide. People with individual PCs, servers, and other devices are running this platform in a wholly democratized fashion. Audius uses its own governance token called $AUDIO to run the platform, and it is being built on Solana, the only blockchain that can deliver the speed, low fees, and censorship resistance necessary to fuel Audius’ growth.

Artists can upload music directly to Audius, like Soundcloud, and bypass distributors. Once the track is uploaded, all the metadata is imprinted into the file and stored on the blockchain. Audius allows artists to receive compensation for their music straight from their fans.

Audius features an excellent mobile app and a flawless desktop experience. It also offers access to exclusive artist content for $AUDIUS token holders and instant royalty payouts. Today, emerging artists, electronic and hip-hop music dominate the platform as it’s still in the early days and needs to see wider adoption and user growth. Nevertheless, Audius has the potential to become one of the music streaming platforms that jumpstarts the actual value exchange between consumers and creators of music in an equitable and fair fashion.

NFTs in the music industry

NFTs in the music industry

If streaming revolutionized the music industry, NFTs could transform it by becoming the most substantial change in the music business since the emergence of streaming platforms. One of the reasons for NFTs being so transformational is that they offer an opportunity for musicians to get paid for years to come. Aside from a musician making an initial NFT sale and profiting from it, they can keep a percentage of all future NFT sales.

Visual art

For example, someone buys an asset or an artist logo for an album cycle at $10,000. The artist can then designate to keep 10% of all future sales. It means that they will get 10% every time a sale of that NFT happens. So if the fan base grows together with demand, the price of the NFT will grow too, and it might sell for $100,000 in the next cycle.

Visual art, like logos, album covers, etc., constitutes the first phase of music NFTs because blockchain technology already allows it. You can find plenty of album art, t-shirt designs, concert photo prints, etc., on Open Sea and other NFT marketplaces.

Music samples

Currently, we don’t have the technology to sell full master tracks as NFTs. Therefore, similar to Illlmind, artists sell samples and rights as NFTs instead of full tracks. The next phase in developing music NFTs is to figure out how to sell master recordings of a song.

Artists like 3LAU are already making millions of dollars selling things such as limited edition vinyl pressings and unreleased music. However, it’s not the same as selling actual master recordings. Once this becomes possible, people will invest in music NFTs like they do in stocks or startups. They will forecast the track’s popularity based on a variety of data, and if the track becomes popular, they will earn profits from it. One of the projects to watch in this space is onchainmusic.com which helps artists create NFTs and list them for sale.

Tokens of live performances

Think of those high-production live streams everyone is doing now. With NFTs, people will be able to own videos of those streams. Artists can do the same with live shows, where you will have the opportunity to buy the video recording of this show as an NFT. We will see NFTs in every pre-order of a record, packaged with every live stream and merch bundle. VIP experiences, and meet & greet will all come with NFTs of, perhaps, your selfie with an artist or some other digital assets.

How will blockchain affect smaller artists?

How will blockchain affect smaller artists?.

There is a trend in music where those at the bottom get no help, and all the money goes to the few privileged at the top. So you might be thinking about how the artists with less than 10K fans will benefit from NFTs and other innovations that blockchain offers. With this technology, it will take just one super fan to make a huge bid and take artists’ funding to a whole new level.

One of the coolest things about NFTs is that they enable fans to give their favorite musicians any amount of money they want and help boost their funding.


Many people in the music business are dreaming of a tip jar, where funding can go directly to artists bypassing middlemen. CDs made the music business more profitable than ever by bringing tons of new revenue to record labels and only a tiny portion of that to artists. Blockchain technology is on its way to change this by creating ways to reward artists directly and opening opportunities for them to earn an unlimited amount of money. The blockchain-based solution can offer artists much more than CDs did, unimaginable profits, and true freedom in terms of how they want their content released.

We can already imagine a world where money flows directly from fans to artists, and royalties stay with creators. Indeed, some of these possibilities are not so far away. If things go well, using this technology, everyone could have something to share with artists and will be able to get back what they wanted: great content.

Hunter S. Thompson once said that “the music business is a cruel and shallow money trench,” so the 4th industrial revolution might put an end to the music business as we know it.


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