Blockchain has the potential to save the music industry billions by revolutionizing the rights and royalties process, ensuring artists, writers, publishers and others in the music industry value chain are paid fittingly (PWC, 2022). A smart contract is a sort of program stored on a blockchain that runs when predetermined terms are met. It is typically used to automate the execution of an agreement so that all parties can be directly certain of the outcome, without any involvement of a third party. They can also automate a workflow, triggering the next action when conditions are met, which makes doing business faster and more efficient (IBM, 2022).
One of the elements of the music industry that smart contracts can impact is the trading in venue tickets. Nowadays, when a consumer buys a ticket for a concert or musical through the official channels the stakeholders(artists, venue & promoters) will receive their earnings. Unfortunately for them, if the consumer decides to resell their ticket for a much higher price they will not get additional compensation. Smart contracts can be the solution for this problem. A smart contract can identify the contractual parties, along with any third parties that may have rights to a transaction involving services or intellectual property (Shelkovnikov, 2016). Furthermore, music fans will also benefit from smart contracts since the chances of buying fake concert tickets are significantly lower as a result of immutability of blockchain technology (Morkunas, Paschen and Boon, 2019). Another way of how smart contracts can strengthen the position of musicians is that they can take the place of current contracts with music distributions platform services like Spotify, Tidal, and Apple Music. Artists can set their own terms in smart contracts which are more transparent, because of the use of blockchain technology (Arcos, 2018).
References
Arcos, L.C. (2018). The blockchain technology on the music industry. Brazilian Journal of Operations & Production Management, 15(3), pp.439–443.
IBM. (2022). What are smart contracts on blockchain? | IBM. Ibm.com. Retrieved 17 October 2022, from https://www.ibm.com/topics/smart-contracts.
Morkunas, V., Paschen, J. and Boon, E., 2019. How blockchain technologies impact your business model. Business Horizons, 62(3), pp.295-306
PWC. (2022). Blockchain: Recording the music industry. PWC. Retrieved 17 October 2022, from https://www.pwc.co.uk/industries/technology-media-and-telecommunications/insights/blockchain-recording-music-industry.html.
Shelkovnikov, A. (2016). Blockchain applications in the media industry. Deloitte UK. Retrieved 17 October, 2022 from: https://www2.deloitte.com/content/dam/Deloitte/uk/Documents/Innovation/deloitte- uk-blockchain-app-in-media.pdf
Interesting piece about smart contracts in the music industry. How you describe it would sound like the technology would solve a lot of problems currently affecting the music industry. Especially on the customers part of reselling bought concert tickets. A verifiable way of doing this would make life much easier. I hope this gets implemented fast, but I feel like the technology is still too far away to have this implemented on a wide scale in the next few years. What do you think is the timeline for the implementation of these smart contracts on a wide scale?
Thank you for your response! I agree, smart contracts probably dont get implemented within the next few years. Blockchain technology still is a difficult subject for the mainstream public to grasp. My guess is that it will take atleast 5-10 years before the first form of smart contracts will be introduced in the music industry