How Blockchain Can Help Musicians Survive

By Carmel Doyle


Making it as a musician has never been easy, but the rise of streaming platforms like Spotify and Apple Music have arguably made matters worse. Even star celebrities like Beyoncé and Taylor Swift, who have no trouble bringing in thousands of dollars through smash-hit music streams, have boycotted streaming sites in an effort to make them pay higher royalties to artists.

“There is a ton of revenue generated from streaming music, but the revenue just doesn’t end up to the ones creating the music,” Bjorn Niclas, co-founder of Choon, a blockchain-based music streaming service, tells LongHash. In fact, he says, their company was ultimately born from the necessity to create a “better working system.”

“The current system as we all know is broken and doesn’t work for any type of artists outside of the major record labels,” Niclas adds.

Companies like Choon are trying to use blockchain technology, where data is shared and verified through a peer-to-peer network of computers, to help musicians monetize their music. Similar to cryptocurrencies like Bitcoin and Ethereum, blockchain technology can make digital assets scarce. This is important for tackling issues like online piracy, a multibillion dollar headache for the music industry.

Blockchain can also cut out middlemen by enabling individuals to transact directly with one another, instead of going through third-party intermediaries. In theory, this could help musicians negotiate more profit for their songs, instead of handing most of it to record labels and streaming sites. Spotify, for instance, pays less than a cent per stream to the owner of the song rights – which can be split between the record label, artists, and producers.

Thom Yorke from Radiohead, Taylor Swift, Coldplay and Neil Young are just a flavor of some artists and bands who have chosen to boycott Spotify in the past, though all of them have since relented.

“It's my opinion that music should not be free, and my prediction is that individual artists and their labels will someday decide what an album's price point is,” wrote Taylor Swift in a 2014 Wall Street Journal op-ed, a few months before starting a three-year boycott against Spotify. “I hope they don't underestimate themselves or undervalue their art.”

The Music Industry Deserves Better Technology

There are several models that blockchain-based music companies are currently testing. Many are paying artists with their own cryptocurrencies, for example, in part as a way to make payments quicker. Sometimes it takes artists more than a month to receive their share of royalties.

The way Choon operates its streaming model, for instance, is by compensating song streams with the platform’s daily distribution of Notes, Choon’s cryptocurrency, in a system that Niclas describes as “streaming as mining.”

“Each day, 375,000 Notes tokens are distributed for artists streams in a pro-rata way,” says Niclas. This also lets Choon pay “artists and collaborators directly every day without any record labels or intermediates that typically take and sit on the revenue for a very long time before maybe paying some back to the artists.”

According to the company’s whitepaper, artists will also be able to earn revenue through advertising, tips from listeners, paid playlists, and subscriptions. Choon retains a flat 20% from any profits earned; the remaining 80% goes to musicians.

Licensing and transparency, especially around profit-sharing and royalties, is another issue that blockchain companies in the music industry are trying to solve. Ujo Music, a New York City-based startup backed by blockchain venture studio ConsenSys, is one of the earliest companies to try its hand at this.

In 2015, the startup partnered with English singer-songwriter Imogen Heap to release her track Tiny Human. Since then, Ujo Music has also worked with Portuguese recording artist RAC and US electronic music record producer Giraffage to launch and publish their respective music albums. Listeners can purchase them with Ether, the cryptocurrency associated with the Ethereum blockchain.

In theory, blockchain technology can be used to more transparently track how often a song is played and divvy up profit accordingly. Smart contracts, or programs that run on blockchain technology, could automate royalty payments and ensure that artists, producers, record labels, and others are paid out according to negotiated terms.

However, Ujo Music is “not vilifying Spotify or streaming services,” emphasizes Jack Spallone, project lead at Ujo Music.

“We saw an opportunity to restore control within the artists themselves without undermining what the labels do,” explains Spallone. “We want to support artists in their destiny for their own art. We’re providing software for the entire music industry to build on in the future.”

Currently, 300 musicians are using Ujo Music’s Creator’s Portal product, which lets artists launch and sell their songs and albums, and manage ownership rights. In the coming months, Spallone says it’s about providing outlets for “bedroom musicians” to share their music with the world.

The music industry “deserves” better technology, he emphasizes. “Rather than disruption, we hope to support the music business and to help accelerate companies faster if they want it. We don’t want to disrupt the industry, but we do want to enable and spawn innovation.”

Mass Market Adoption Won't Be Easy

That being said, blockchain-based music applications are still far from challenging industry incumbents. Volume and traffic is one main issue: It won’t matter if artists get a higher share of royalties per stream if blockchain platforms attract a fraction of listeners compared to existing services.

Part of that has to do with the relatively small number of tracks blockchain companies currently offer on their sites. According to Choon co-founder, DJ Gareth Emery, the music streaming site is on the verge of reaching 10,000 tracks. Two months ago, the site had 500 at its launch. So far, the platform only accepts tracks from independent artists (no record labels or publishers).

Usability is another issue. Like other blockchain services, some music applications require users to make payments in cryptocurrencies, such as Ether. That usually requires some familiarity with MetaMask or other cryptocurrency wallets that let users purchase products and services through their web browser. That can be a deterrent to users, especially if they don’t own any cryptocurrency to begin with. There’s even a Medium post that documents how hard it was to buy Imogen Heap’s Tiny Human on Ujo.

Other usability issues, such as latency, can also affect the user experience. EvoPass, a Dublin-based ticket platform that lets users buy and resell concert tickets, originally launched as a blockchain-based application to tackle ticket fraud. Eventually, however, EvoPass moved away from blockchain technology as the company decided it wasn’t appropriate for their product.  

“Latency is an issue in terms of scanning tickets. It was taking a long time to relay back up and down the blockchain. We also didn’t feel ticketing was a perfect use case,” explains Kevin Murray, co-founder of EvoPass.

“Regardless of whether or not blockchain is the perfect solution for ticketing, even though we weren’t going to be using cryptocurrencies, the two are inextricably linked. The fluctuating nature of the cryptocurrency reflects poorly on the blockchain as a whole for mass market adoption,” he adds.  

Murray is confident, however, that there are applications for blockchain in the music industry and cites the aforementioned Imogen Heap and her Mycelia project for music makers. After all, the many pain points of the music industry, especially those related to third-party platforms and actors, make it an appealing target for blockchain-based solutions.

“I believe there is a space for blockchain in ticketing in the future but not currently, which is why we changed. I wouldn’t rule it out,” Murray adds.

Carmel Doyle is a Dublin-based journalist who covers STEM, business and blockchain technology.

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