How The Blockchain Will Change The Music Industry
By now I’m sure that most, if not all of you have heard of Bitcoin or Ethereum.
If you don’t know what makes crypto currencies so special, it’s all about the technology they are built behind, the blockchain.
If you don’t know much about the blockchain, well you don’t need to because I give a basic level explanation for what this mysterious piece of tech is!
What’s even more special about it is the near endless posibilities of how we could implement the blockchain with music, especially through distribution.
Come hangout while we explore how the blockchain WILL revolutionize the music industry for artists.
What You’ll Learn:
- What the blockchain is
- How the blockchain is used
- How you can implement the blockchain in music
- The benefits of the blockchain
and much more!
Automatic Episode Transcript — Please excuse any errors, not reviewed for accuracy
Hey guys welcome to electronic dance money, your number one business resource for making money as electronic musicians and producers
Hey, What is up everyone? Welcome back to a brand new episode of electronic dance money. I’m your host for string Casino. Hope you guys are doing well and doing good today I came up with this episode for this podcast because for a few years now for a while actually for probably almost 10 years I’ve been paying pretty close attention to blockchain technology. Bitcoin Aetherium ripple a bunch of other different cryptocurrencies and it’s piqued my interest for for some time now, I’m super into economics, I’m super into the free market, obviously, because I’m involved with business. So the blockchain,
especially when it comes to money seems like a really smart idea, since you don’t have one centralized person kind of controlling everything. Now that that I that ideas kind of shifted over the years with, you know, massive Bitcoin farms, because then you can have, you actually have an issue of people, one creating supply issues with certain computer components, specifically graphics cards, but then also you have these massive farms where if someone’s farming more than everyone else, then there could potentially be an issue in terms of supply and demand, and then actually having control over mining and that’s for monetary reasons. And bitcoins always been about money and investment in nothing else. But, but what piques my interest more than anything else is definitely the Ethereum blockchain, for sure, with smart contracts. And as of recently with NF Ts, we’re not going to be talking about NF T’s today. Specifically, what I want to talk about is just blockchain technology in the way that it can impact the music industry as a whole in such a, a, an amazing way. And I hope that today, if you know nothing about blockchain, I hope that today, you’ll leave this episode, having a better understanding of what the blockchain is, and what it would look like in a world away from money. Okay, so the idea of, we’re going to be talking about NF T’s at a later date and the use of NF T’s of music because there’s a lot of really, really interesting ideas that I’ve been thinking about and processing and talking to people about, about with the implementation of virtual reality and NF T’s and there’s a I’m doing, I’m going to do an entire episode on it with another guy, this graphic artist that is super into NF T’s right now. So we’re going to be talking about that. Hopefully, in a few weeks, I’m gonna have him on I’m not sure we’re still discussing figuring out a schedule. But today, like I said, we’re just focusing on the blockchain technology, the idea of blockchain can be used in just about any aspect of your life technologically and in regards to the internet. So it’s taken me years, it’s taken me a long time to grasp the thought of blockchain technology being implemented in a different way outside of money in monetary policy, because of these cryptocurrencies that are that are all just about money. The fact that the blockchain is starting to be implemented more and more is awesome. And and I think tackling money first for the blockchain is actually a really smart idea. You know, since Bitcoin was started, and all these other cryptocurrencies, the face value of these of the blockchain has been money. And the reason for that, I think is, is probably because the biggest interest most people have is money, right? Everyone needs money to survive. So if you want to get something popular, have it revolve around money. And, and because people have been able to get really, really rich off of these cryptocurrencies, it just brings the blockchain in the idea of the blockchain to more and more people, which, which is a positive. So I think we’re seeing now and we’re going to continue to see over the next decade, decade or two, the blockchain being implemented in different ways in more useful ways, and in different parts of society, again, outside of money. So let’s just talk a little bit about the basics of what the blockchain is. I’ll provide some resources as well if you guys want to dig into what the blockchain is on the shownotes. But specifically the blockchain itself is essentially a ledger that can take in information that gets encrypted. It is read by multiple parties who are essentially mining the blockchain. They’re inserting a block into the chain of events that can never be unlocked or or the information can be retrieved about that block, but the block itself can never be changed, changed. When you insert something into the blockchain in for instance, right now, it’s monetary transactions. That’s what’s being read in issued on the blockchain. Like I said, it’s being implemented in different ways. But let’s say you and I exchange one Bitcoin, okay, so I send a Bitcoin over to you, there are people out in the world that are quote unquote, mining, Bitcoin or, or mining different cryptocurrencies. And essentially, what that means is when I issue that transaction to you, there are at least two people randomly out in the world that read that transaction, confirm the transaction, issue that into the block, and then a second person is going to verify that same transaction issue into the block. And that turns into a block within the chain of other blocks that can never be unchanged, that transaction is then issued to that person, and it can be verified, and it’s very secure. So security is a big aspect in this. But also, it’s not someone that is some central power that’s issuing out these coins to everyone, it’s kind of a community of people around the world that are that are reading that these coins are being transaction, yada, yada, yada. Now, when those people verify that that transaction happened on the blockchain, they get a kickback. So they have fees that they’ll take from your transaction. And they’ll actually acquire a percentage sometimes it’s super small, sometimes a little bigger, it depends on the transaction size itself. Usually it’s it’s very small amounts of money, I do believe you can have more than one person working on verification of blockchain as well. It just depends on your computing and processing power. And this gets into technological mumbo jumbo like the hash rates and whatever. We don’t want to get into that. That’s the idea of what the blockchain is. It’s it’s verifications on a distributed ledger that is not solely controlled by any one person. It’s verifiable, and it’s secure. So let’s now transition into the idea of using the blockchain with your music. Okay, currently, one of the issues that you have when you sign let’s say, your you sign a song to a major label, and you get roped into a contract that that might not benefit you the most that you you could potentially get screwed over on, or you will get screwed over on one of the issues with having these contracts. And signing tracks to labels, sometimes big or small, is that you don’t necessarily always know what’s going on with your music, especially when you’re signing over such a large percentage of your of your work, right? If you’re giving up 60 70% 80% You don’t know what’s going on, you don’t always know the payouts that are happening with your music, because you’re getting paid out by the record label based off of your royalties. You don’t know how it’s being used in other works. Sometimes you’ll just randomly receive a check in the mail. I know multiple friends that will randomly receive royalty checks in the mail for their use on shows or other videos, just depending on what the work is. A lot of the times as well. They don’t get the information or the analytics on like, how many times was this video viewed? How many times was it streamed on Netflix? How many people were watching this football game when my my song aired on TV, they don’t get that information. And one of the issues with that is that everyone has their proprietary databases that don’t talk to each other. So it’s difficult for you know, if a network show is playing your song is using your song, it’s sometimes it’s difficult for databases to refer all the information over to a third party company, sometimes they don’t want to disclose certain pieces of information. So you won’t necessarily always get paid out exactly what you’re owed. Right. This is one of the major issues with the industry is that there’s just a lot of gray area when information is being distributed and moved between third party companies, you know, with a major network and sending that information over to let’s say BMI and then BMI sends that information over to the record label and maybe they’ll send it over to you and then sometimes information is hidden from you. That’s a serious issue. Now imagine your song being distributed solely on the blockchain, okay, depending on how this could be distributed on the blockchain, whether it’s through a third party service and there are some company are working on some things I know Blau is working on a company right now to distribute music on the blockchain if there is a third party service, which is more than likely how I see this happening a third party service streaming service or distribution service, where you go on and you know, very similar to distro kid, you enter in all of your information, but all of that information is then stored on the blockchain itself. So that information can be retrieved, and looked at later on. And you can set parameters for what you want to track and how it’s tracked. Now, you have the ability, when you sign a contract to a major label or, or even a small label, everything that goes on with your song when it’s distributed through the blockchain is accessible to you. Right, you come up with the parameters and you you can actually see directly where is your song going to because it’s on a public ledger, that I don’t want to say no, it’s not an entirely public ledger completely depends on how the blockchain for this specific service is written whether or not it’s public or private, but it’s still private based off of, you know, if you have a contract with a record label, you set the parameters with that record label, that information is stored on a block on the blockchain that cannot be changed, or moved or adjusted. But based off of the parameters and how the blockchain is written, only you and the record label can access and view the information from from that block and how it’s used and distributed to other places. You know how that song is pulled and used for licensing or whatever the bottom line is, you can at least access the records from the blockchain that are continually stored. So if your song is then pulled licensed for a song for music, or something, that information needs to additionally be stored on the blockchain as well. So you have access to that because you have access to the original, the original file where it all started, where the licensing company pulled from the blockchain all the information. So you can you can directly see the parameters of Oh, based off of this licensing company also used my song on this blockchain, I can access that as well and see, okay, how much? How many people viewed that viewed that video? How many times did they stream that song? And how much is the record label getting paid for that? And then how much should my cut actually be? So all of a sudden, you have much more transparency over what’s being paid out how it’s being paid out? Are you getting fucked over, and you can see it as a whole, it’s no longer being hidden to you. Additionally, you can see exactly who’s streaming your music, you can see exactly where you’re being licensed from, who’s licensing it, where it’s being shown at, you get so much more data and information that currently databases are not telling you. And it’s it’s hard, if not impossible to actually get that information. So this is just one piece of the puzzle of the blockchain in changing the music industry as a whole. Let’s talk a little bit more about licensing and smart contracts. And this is all based off of the Ethereum blockchain. And Aetherium was created with this idea of using smart smart contracts for different transactions. You know, if you if you purchase a car from someone, that title can be transferred over to you in the blockchain. So it’s very clear who it’s registered to who owns it, who the transaction is being made to, and that information can’t be altered, and it can be stored in the blockchain, where it won’t be moved. So now you don’t have to have physical paper or be questioned about who actually owns this vehicle. So this is the idea of using smart contracts. Now. Now let’s take a look at look at this with licensing. So currently with licensing, if you own if you own a store, or let’s you know, let’s take you as an artist, for instance, we’ve talked about this with the use of what BMI and ASCAP are, if you register your song through bmi or ascap. That’s one of the many databases you could possibly register your song for. And they can usually, sometimes they’ll distribute to licensing platforms where your track is hosted. And people can license your tracks and then they pay out to BMI based off of whatever payment you deserve. Now, the issue here is that bmi or ascap or some of these other third party companies set the price for your song to be licensed. So you don’t have control over that. And you don’t usually know what your song is being licensed for. So this causes issues because if you’re Song is being priced way too high, then people aren’t going to use your song. Or if it’s being priced too low, you, you might not know that. And then additionally, sometimes you don’t even know what the record label is actually getting issued the payment for, we can go even deeper and talk about Spotify and in Spotify sometimes doesn’t pay people out the right the right amount or at all, because they claim they don’t. They don’t know directly who owns the rights to certain music. So sometimes people aren’t even getting paid, paid any music, or getting paid any money at all, or at least not the right right amount. Because they claim they don’t know who owns the rights. There’s too many songs, too many people to track everything. Well, again, the blockchain would fix this issue because the machines can directly relate to where it is that this song was first created on the blockchain, they can pull that information and they can create another block based off of how it’s being used if it was streamed, right, if you stream a song on the blockchain, on Spotify, that is, that is something that is encoded on the blockchain, your stream of that song is encoded, and it can it can reference the song that’s based in the blockchain. So now there’s direct information, every time a song is streamed. And the original block that was created when the song was first distributed out, has all the parameters and the information was on there, who owns the rights? How much is this person supposed to be paid for the rights. And this is all on a ledger that no one person controls and is talked publicly by all around the world by all of the machines. So it solves this proprietary issue with databases, and one central focus and people not being able to get paid out. So it’s the same thing when you’re talking about licensing with SYNC sync licensing, specifically with a third party. Let’s say BMI starts implementing the blockchain. Well, now you can set the parameters with smart contracts based off of you know, you talk to other people, you set the contract rate, the parameters, and and this can all again, notate who owns it. What percentage, how much do you want to get paid for the song? What’s the cost for someone to license the song, and this is all put into one contract that is then placed on the blockchain that can be referenced later on. And now, a third party business or someone who’s creating a video can go on to these third party platforms, they can set their parameters, they can find your music, they themselves can say, Okay, I want to pay this much for the song over over a year. And they can add that to some ice cream shop that has a loop of a playlist, they can add that to their playlist then. And the blockchain can then record every time the song is streamed, that can be placed on the blockchain, if they start hitting a threshold limit it can the whatever algorithm or software they’re using can stop streaming that song because they’re hitting over their max limit that they want to pay for it. It makes everything so much more customizable. And it’s crystal clear on what’s going on. Now, additionally, what’s awesome about smart contracts, and in the use of this with fans is you can there’s ways of you being able to set parameters within the smart contract for the machines to detect. When someone is using the song or sharing it a lot more you can set parameters to actually give those fans or people some sort of payout or send them something. So now you can incentivize fans to share your music and that, again, the reason this can be done is solely because of blockchain, right? blocked with Blockchain technology. It’s all being recorded when someone is using your song or sharing it and how they’re doing it. So if you have a super fan that shares your song 300 times throughout the year and plays it 3000 times, you can see that that person is doing that thing. Now if their information is public, you could potentially reach out to them. But based off of how this could potentially go because money will probably be attached to this because we’re talking about getting payouts and royalties and streaming costs and yada yada yada. If there’s third party streaming services, like Spotify, people could essentially can, in theory, people could connect. If they’re doing this on the Ethereum blockchain. With smart contracts, people could connect their Aetherium wallet there, and they’re within your parameters of when you first distribute that song. You can say if someone shares my song X amount of times, pay them this much Aetherium. So now there’s a direct incentive for fans to share your music, play it and get it out there for you and you’re setting parameters for people. And this is kind of a little bit dipping into the idea of NF T’s but but mostly just the power of the blockchain in what is accessible to artists and fans and what you can do. And this is all completely possible. This, this isn’t. This isn’t theorized, it’s starting to be used I suspect blouse company, I can’t remember what it’s called, is going to start doing this, this sort of thing. And it puts so much more power into the hands of artists. And this is why I’m so fascinated with that this idea of the blockchain and what it’s going to do to the music industry, if it can get implement in the right ways. This is going to break up a lot of massive companies like Apple Music, and Spotify and YouTube music. And I hope they implement this stuff in knowing those companies who knows how they’ll implement it, it’s gonna open up a lot more opportunities for artists, right directly for artists, they get more transparency on how their song is being used, what’s being paid out for it,
they have a much bigger pole with record labels in terms of setting the contract and the parameters, right, because record labels can no longer hide behind their proprietary databases and what they are and how they distribute it and, and what what are the what are the deals they’re making with other third party companies. It’s a it’s a very interesting concept. I’m very curious how this is going to be implemented. I’m excited to see it implemented. And going even deeper down the rabbit hole with NF T’s. I’m still hesitant on NF T’s I’m not 100% sure how that information is going to how that’s gonna play out. I see it playing out with generations B beyond us. I see it being played out in a very interesting way. Like my idea of how NF T’s will be used for music, I think is pretty interesting. And I have a I have some I have some, the theories I have are based off of the things I do outside of music and my, my job and everything. So I’m gonna dive into that when I get into that NFT episode. Again, I’m not completely sold on NF T’s but it’s a very interesting way of the way I’m thinking about it. I think it can be used in a very interesting way. But blockchain smart contracts I really think will revolutionize the way artists can release music, incentivize people and super fans, and in change the way music is distributed. And what comes with that. There’s so many opportunities with it. So if you didn’t understand it before, I hope I’ve given you a pretty good description on on what it could potentially look like for the music industry, and how it can be implemented. It’s really revolutionary if you can wrap your head around it. But that’s it for today’s episode, guys. Like I said, I’ll put some resources in terms of like, how this could be implemented in the music industry, what the blockchain the technology behind the blockchain is and smart contracts. that’ll all be in the show notes at envious audio.com/episode 66. For you guys to check out Ooh, order 66 I just realized Damn, I wish I made some more Star Wars references in this episode. Well, we executed episode 66. So there you guys go. I hope you guys have a good day. I’ll see you later and take care
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