Blockchain in the Digital Music Industry: The transition of royalty payments into the blockchain should empower artists in the music industry by increasing their bargaining power for asking higher payouts, claims a report that blockchain-based digital music platform, OPUS has shared with Cointelegraph.
According to OPUS’ study, given the novelty of introducing blockchain to the digital music streaming services market, they see great potential growth.
The blockchain-based platform says that artists may be attracted to decentralized platforms because of the potential for relatively higher earnings, compared to conventional platforms.
OPUS believes that a shift to tokenized royalties would also diversify personal portfolios of artists.
In recent years, the research observed a “substantial” increase in the cashflows payable on the grounds of royalty-related contracts in the entertainment and media industries.
Regions with a growing interest in blockchain solutions in the industry
Fees for the use of intellectual property increased at an annual rate of 8.99% in 2017 and 5.81% in 2019.
The report predicts that blockchain’s role in the music industry will be especially notable in emerging economies such as China, Brazil, India and Russia, despite the dominance of mainstream platforms such as Spotify, Apple, Amazon and Google.
The Asian giant is the one that stands out the most, as its royalty payments quadrupled between 2016 and 2017.
Another country of interest is Venezuela, as OPUS states that there is a growing adoption by blockchain technology.
Education as a key factor to raise awareness
However, OPUS claims that the open-source decentralized music platforms of the future should not just focus on increasing the musicians’ final share in the royalties, but also educate them on applicable aspects of financial literacy.
The report adds that new platforms will have room to grow:
“As this market is currently dominated by a few large players, there is a significant room for new platforms to change the way and amount of royalties distributed to individual musicians, podcast producers, and all other artists. In particular, the Blockchain is here to change the status quo.”
In 2019, Cointelegraph reported several use cases of blockchain applied in the music industry such as the global media giant Warner Music. Warner announced that they would start creating digital tokens using a public blockchain backed by the creator of CryptoKitties.