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If you are not from China, chances are high you have never heard of WeChat. So, you probably didn’t know that it is the biggest mobile app in China and one of the biggest in de world. WeChat has more than 950 million monthly active users. This is more than, for example, Instagram. By now, you are probably wondering what WeChat is. WeChat is owned by Tencent, the most valuable Chinese brand according to BrandZ.

It is hard to describe the activities of the company, because there is nothing like it in the western part of the world. The app was first released as a messaging app, in January of the year 2011. Today it is known as “The App for Everything”, because of its many functions and platforms. The app enables you to do everything within your daily life: purchase flight tickets, transfer money, pay your utility bills or make an appointment at the hairdresser. Oh yes, you can also use the app for text messaging. The best thing is: you can do all this without leaving the app.

This sounds very convenient, and it is, but there is also a downside. All the information about the 950 million users is saved on WeChat servers. This means that the app knows who your friends are, how much money you have, where you live, where you work, where you buy your coffee, what kind of food you like, and so on… In most cases, these WeChat servers are located inside China. This means that they are within reach of Chinese law and regulations.

A year ago, Amnesty International conducted a survey. They ranked that eleven most popular messaging apps in the world in terms of protection of user privacy. Amnesty International found the following: “Tencent owns the two most popular messaging apps in China, WeChat and QQ, and is bottom of our message privacy scorecard, scoring zero out of 100. Not only did it fail to adequately meet any of the criteria, but it was the only company which has not stated publicly that it will not grant government requests to access encrypted messages by building a “backdoor”.”

Last month’s update to the platform’s privacy policy stated that saved data may be disclosed to representatives of the Chinese government. To the extend it didn’t already, WeChat now admits that data is being shared with the government.

Why is this important to know? I’m fine when I use WeChat outside of China, right? This is true for most cases. When you start chatting with someone that uses WeChat inside of China, things get different. Now, all your messages and information will be stored on Tencent servers. No need to be afraid. But just keep in mind, WeChat is like the ring from Lord of the Rings: the moment you put it on, they know how to find you.

Sources:

Instagram now has 800 million monthly and 500 million daily active users

http://www.slate.com/blogs/future_tense/2015/01/06/tencent_s_wechat_worldwide_internet_users_are_voluntarily_submitting_to.html

It’s official, WeChat shares private user data with the Chinese government

http://www.dw.com/en/hello-big-brother-how-china-controls-its-citizens-through-social-media/a-38243388

https://www.amnesty.org/en/latest/campaigns/2016/10/which-messaging-apps-best-protect-your-privacy/

WeChat Shares Consumer Data With Chinese Government

https://www.cnbc.com/2017/03/20/tencent-becomes-chinas-first-100-billion-brand-wpp-survey.html

 

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Streaming disrupted the business model of recording labels, which consisted digital music, iPod and mp3-players. The Streaming services like Spotify, Apple music and Deezer allow users to stream music online without the need of downloading each song separately. On the internet, streaming services created a platform which connect artists and consumers. This platform business model changed the revenue and cost structure and led to several new advantages for the companies and to disadvantages for the artists in the music industry.

Streaming services like Spotify make money by offering two different versions (versioning) of the service: 1) through subscribers, who pay a monthly fee, and 2) by advertising to ‘free users’. Different groups of subscribers are also offered a different price, for example students can get a student discount (group pricing).

Using the internet to stream music leads to several different advantages for companies.  First of all, streaming services are able to customize ads and customize the music they recommend to users.  Secondly, companies are able to offer individual songs instead of entire albums. Lastly, customers are able to share their playlists, increasing the attractiveness of the service.

However, the artists suffer from this business model. Artists get a certain cut of the revenue streaming services earn for streaming their music which is only 70% of the revenue that the song raised. Moreover, artists might not have full rights to their own music and therefore may have to split this part of the revenue with other parties.

The upcoming technology can disrupt the music industry and bring back the ownership of music for artists is blockchain. The blockchain is an immutable distributed ledger that can validate information and register transactions without the need for a central authority. The blockchain exists in communities which are all operating on the same blockchain and are connected, can share information and can transact with each other on the blockchain. Because of the validation of information and security that blockchain provides, intermediaries remain unnecessary.

Currently, one of the biggest problems of the music industry is the fact that there is no verified global registry of artists and their music. The blockchain could help build such a registry. Creators can upload their music and the associated metadata on the blockchain. Companies and consumers can search and play the music of the ledger. Smart contracts will ensure that the owners of the content will be paid automatically for its usage. This leads to several different advantages.

One of the advantages of blockchain for the music industry is that, blockchain can solve the piracy problem. Artists can publish their music on the blockchain, on which every song gets a unique ID and timestamp in a way that is unalterable, so that music can’t be downloaded at the leisure of users.

Secondly, blockchain can revolutionize the way money is earned in the music industry. Currently streaming services offer a pure bundle of all songs available and they pay out artists based on their share of streams. In the future people will be able to choose individual songs to listen to, so artists will receive money directly for each stream. Finally, the blockchain can establish a more direct relationship between the creators and consumers of content, leading to disintermediation.

References:

A short history of vinyl records. (n.d.). Retrieved from http://www.vinyland.com/index.php?main_page=vinyl&language=en

Dickson, B. (2016, October 8). How blockchain can change the music industry. Retrieved from https://techcrunch.com/2016/10/08/how-blockchain-can-change-the-music-industry/

Dickson, B. (2017, January 7). Blockchain could completely transform the music industry. Retrieved from https://venturebeat.com/2017/01/07/blockchain-could-completely-transform-the-music-industry/

Etwaru, R. (2017, May 15). Blockchain: Massively Simplified [Video file]. Retrieved from https://www.youtube.com/watch?v=k53LUZxUF50

Hall, J. (2017, February 21). How the technology behind Bitcoin could change the music industry – and help everyone get paid. Retrieved from http://www.factmag.com/2017/02/21/blockchain-bitcoin-music-industry/

Tapscott, D. (2016, June 1). How the blockchain is changing money and business [Video file]. Retrieved from https://www.ted.com/talks/don_tapscott_how_the_blockchain_is_changing_money_and_business

The history of the audio cassette. (n.d.). Retrieved from https://southtree.com/history-of-formats/history-of-the-audio-cassette

The history of the CD. (n.d.). Retrieved from https://www.philips.com/a-w/research/technologies/cd/beginning.html

Walden, J. (2016, April 25). What a blockchain for music really means. Retrieved from https://blog.mediachain.io/what-a-blockchain-for-music-really-means-e2f8dc66d57d

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Spotify has about 140 million active users worldwide, a database of around 30 million songs and over 20.000 songs added each day. Last year, the company made about 2,9 billion euros of revenue. As anyone can tell from these numbers, Spotify is doing well in the music industry. Still, less well-known artists are struggling to make ends meet. For these artists, the world is about to change. Blockchain has the potential to disrupt the music industry.

What is blockchain?

For those of you that are not familiar with the blockchain, here is a short introduction. The blockchain has the potential to replace all the intermediaries in business transactions. Typically, intermediaries are take part in transactions to establish trust. With the development of the blockchain, the system will establish trust and with that make all intermediaries unnecessary.

How is this done?

The blockchain is the technology behind Bitcoin. It is a decentralized, digitized, public ledger of all transactions. In this ledger, transactions are recorded and added as blocks, which allows market participants to keep track of transactions. The blockchain consist of nodes (computers connected to the network), which automatically download copies of the blockchain. This makes it impossible to change the ledger, because one would have to hack all the nodes at the same time.

How could the blockchain erupt the music industry?

Currently, there is no verified global registry of music. This is a big problem, especially for smaller artist. The blockchain could help build such a registry. Artists can upload their music, including metadata, on the blockchain. Companies and consumers can search the blockchain for music and play it off the ledger. The owners of the content will automatically be paid through smart contracts. This means that the blockchain could change the way music is published and money is made.

What are the advantages of blockchain?

First, the blockchain can solve the piracy problem. Because music can’t be downloaded, copied and modified at the leisure of users, piracy will be very difficult. Second, users can play the songs they want and immediately reward the artists with cryptocurrency. This revolutionizes the way money is made in the music industry. Lastly, the system enables artists to get in touch with the people that are playing their music. This results in intermediaries becoming (partly) irrelevant.

What will Spotify do?

Currently, Spotify experiences extreme difficulties to find out who owns the rights of a song. Most of the songs don’t have the proper metadata to ensure that the correct artists or rightsholders get their money. What will Spotify do if blockchain hits the market? In April of this year, the company acquired Mediachain, a blockchain start-up. It is not clear if Spotify will bet big on blockchain or do something else.

What do you guys think? Will blockchain take over the music industry? And, what should Spotify do if this happens? I’m curious to know what you think!