From vinyl records, cassette tapes and CDs to MP3 players, music has come a long way to the point where we can enjoy it at the touch of our fingertips on a mobile phone. Communication technology now allows artists to reach hundreds of millions of listeners, but it's not making many of them rich.
Digital streaming companies are the biggest enablers of the music industry today, making tens of millions of tunes available to anyone with an internet connection. However, since most of these companies are supported by advertisements and subscriptions, there have been consequences for the music industry.
While artists are reaching wider audiences, their music has become a commodity that advertisers, music distributors and streamers can exploit. Not only are artists underpaid, but also their listeners are obliged to pay streamers a premium if they do not wish to be subjected to the eternal bombardment of a 30-second ad each time they play a song or two.
RIGHTS AND WRONGS
Studies show that each time an Apple Music or Spotify user plays an artist's song, the holder of the music rights earns between 0.6 and 0.8 US cents. While Apple Music and Spotify do not exclusively own the music they release, they are making exponentially more money than the artists who created the music.
Roughly 2 million artists contribute to the global recorded music industry, which earned revenue of $19.1 billion last year, according to the International Federation of the Phonographic Industry. Yet the artists are only making 12% of what the music industry makes.
In most cases, artists and music rights holders are considered two different entities. Artists need to sign up with a music distributor before they can release their music. And even before it reaches the distribution point the "holder" of the music rights is split among artists, producers, record labels and other parties. In fact, according to CNBC, 70% of an artist's streaming earnings goes to the artist's record label.
Artists are forced to put their music on different digital streaming platforms with several layers of middlemen. It is always a "take it or leave it" scenario. If artists do not accept the exploitative deals offered by their record label, then they are unable to reach a broader audience or monetise their music at all.
Meanwhile, if the audience refuses to pay premiums or listen to commercial messages, then there will be no way for them to listen to their favourite artists' music.
On the other hand, total streaming revenues have increased by 34% since 2018 as listeners continue to subscribe to Apple Music and Spotify and a handful of smaller services. YouTube is another option, but it treats creators even more shamefully than the streamers do, paying about $0.003 per view.
A FAIRER DEAL
In addition to artists being unfairly rewarded due to the centralised nature of music production and distribution, the industry is also suffering because of the increase in piracy. According to the global anti-piracy monitor Muso, websites featuring pirated music attracted 73.9 billion visits last year. One big problem is that artists and distributors are unable to access real-time data pertaining to their music productions when they are downloaded or passed to other devices.
But when double Grammy Award winner Imogen Heap released the song Tiny Human on the Ethereum blockchain four years ago, it set the stage for a groundbreaking experiment for music creators and developers to collaborate and test an alternative platform for releasing music directly to the audience.
With blockchain, music enthusiasts can directly download the music through a smart contract for a small fee and the earnings go directly to the artist. This is done through the use of a borderless mode of payment, which is cryptocurrency. Blockchain technology is a tamper-resistant ledger. No data record or even data sequence can be altered, as it is capable of remembering all transactions from the very beginning.
One perfect example of this is a company is called Vevue. When a song is placed on the blockchain directly by the artist, with no record label or middlemen involved, it is given a unique number and is accompanied by a surveillance smart contract. The smart contract then performs a search on the internet and detects any illegal duplicates of a song and directly executes the necessary copyright actions.
Through the use of this technology, piracy is eliminated and, for the first time, artists will have a better view of the real scope and reach of their songs, as well as receive the entirety of their uncut earnings.
THE FUTURE
Taylor Swift was the first major recording artist to take a stand against Spotify in 2014 when she pulled her music from the world's biggest streaming platform in protest against the paltry amount of its payouts. She returned after the company improved its payments.
Blockchain technology offers the possibility of a music industry free from piracy and where all stakeholders, from Taylor Swift to your local garage band, will be rewarded based on the level of their contribution.
Music streaming services and record labels today have significant, some say undue, power and influence over artists. However, if they do not change their ways and fairly compensate artists for their work, they will be replaced by emerging blockchain startups -- sooner rather than later.
Jirayut Srupsrisopa is the group CEO of Bitkub Capital Group Holdings Co Ltd, a local blockchain technology specialist that is also advising businesses on decentralised applications.
