The introduction of blockchain will provide a more efficient and transparent means for tracking royalty distribution, remuneration for collaborative projects, and payments to talent. If you are looking for digital wallets, here are different types of cryptocurrency wallets to use.
For example, in traditional music chains, there needs to be more transparency about royalty payments and the costs associated with such charges. Due to these supply chain complexities, there needs to be more lag between when the song or video first airs or hits the internet and when royalties are made available to recipients. With cryptocurrency adoption by major industry players, musicians will be able to receive their royalties in minutes instead of waiting up to six months for a quarterly earnings statement from their publisher. Blockchain adoption by media outlets will also be a welcome change to the industry.
Fans will no longer have to wait days or weeks to access the entertainment they paid for, which is one of blockchain’s most beneficial traits to the entertainment industry. As far as the overall music chain is concerned, blockchain is expected to drive significant cost savings in global payments, data management, and real-time tracking of assets through smart contracts.
Major music and entertainment industry players recognize how vital blockchain technology and cryptocurrency can be for their businesses, and that’s why there has been an uptick in recent years in patent filings by major players such as Sony Music and Warner Music on behalf of their songwriters. Let’s discuss why the music industry needs the adoption of blockchain and cryptocurrency.
Fan-based tokens:
Tokenization is a strategy that major players like Sony Music, Warner Music, and Live Nation will utilize to solve the following problems:
- Reducing friction in the music and entertainment industry, which includes improving transparency and efficiency of royalty payments.
- Creating new revenue streams by leveraging previously untapped consumer data.
- Enabling a new class of music consumers with benefits beyond simply listening, such as voting on playlists or accessing exclusive content.
- Fundraising to support artists via fan-based tokens.
Cryptocurrencies for Royalties:
To reduce the lag time associated with royalty payments, major publishers and labels in the music industry will be accepting cryptocurrency as a means of payment for royalties. These payments will be held on the blockchain and distributed to rights holders instantly via smart contracts. In addition, using cryptocurrency will solve problems related to tax deductions, which can add up to millions of dollars in savings for significant players in the music industry.
Fraud reduction:
The current processes used by major players in the music industry are prone to fraud. It is mainly due to all parties having separate data silos that must be reconciled regularly. For example, there may be instances where multiple entities submit claims for a particular song or video on YouTube. By utilizing blockchain technology, the claims submitted on YouTube will be transparently reconciled by people with the metadata stored on YouTube’s servers. So, for example, if a patron makes two additional royalty payments for the same song or video, you can bet they’re doing so fraudulently.
Audience engagement:
The music industry has traditionally been one of the minor social sectors. However, in cases where artists can monetize their fan base by utilizing blockchain technology or cryptocurrency, it will significantly increase fan engagement and help build a bridge between musician and fan. It will also help disrupt other industries that rely heavily on traditional advertising.
Blockchain and smart contracts can be used by major players in the music and entertainment industry to solve the above problems. In addition, smart contracts utilized by these entities will have the added benefit of reducing the time it takes to process artists’ metadata information while eliminating payroll costs, which constitute a significant expense for most media outlets.
Another benefit of smart contracts is that they can reduce fraud by providing immediate royalty payments based on ad impressions. It will free up legacy media outlets’ IT engineers to focus on more meaningful projects for their business rather than manually entering advertisement data into spreadsheets or non-integrated systems.
Blockchain is expected to transform the music, entertainment, and copyright management industries.
Blockchain for Talent hunt:
Blockchain will be beneficial in terms of identifying talent. For example, blockchain-based royalty payments will help identify and quickly track talented musicians across the globe. Blockchain can also be used by agents, scouts, and industry professionals to discover the “next big thing” before other significant players do.
It is because blockchain-based metadata will allow scouts to search through thousands of songs globally without having to spend hours or days searching through individual artists’ websites. In addition, the benefits of blockchain technology are undeniable for artists and fans alike as it will help ensure all stakeholders in the industry are fairly compensated, which has been a long-standing issue plaguing the music industry for decades.
