Twenty years after peer-to-peer (P2P) file sharing decimated the music industry, blockchain is emerging as a new P2P technology that could rip the industry anew.
But this time, the revolution promises to be different. Whereas digital and illegal downloading once wreaked havoc on the industry at large (from music creators to record labels, none were spared), a blockchain-based model for music pledges to boost the fortunes of artists. Industry middlemen and gatekeepers, however, could be in danger.
This is according to the vision proposed by SingularDTV, a company that is developing an entertainment app ecosystem on top of Ethereum — the blockchain computing platform for launching decentralized apps. Through its apps, SingularDTV hopes to enrich and empower artists, and rewrite the rules of the music and broader creative industry. Some of key steps its taking to accomplish this include:
- Creating a token-based economy where value is derived from an artist's work.Tokens are the native crypto-assets of a blockchain app. They are powered by smart contracts (code-based financial agreements) that are programmed into Ethereum. When an artist tokenizes, they're turning their intellectual property (IP) into a financial asset, so an artist's token reflects the value of their creative output. Those who buy into an artist's tokens buy into owning a share of the artist's creations and its revenue flows. The more people who consume the artist's creation, the higher the value of the token.
- Enabling artists and consumers to earn money from selling and buying tokens.Artists can raise money through a token launch, which is similar to an initial coin offering (ICO). Here, anyone can buy the tokens upfront. The majority of the windfall will go the artist, and the token launch platform-provider (such as SingularDTV) will retain a service fee. These tokens are programmed via smart contracts to dispense royalty flows: If someone pays a dollar for an artist's content, then all of that artist's token-holders will receive a pro rata share of that dollar, explains SingularDTV CEO Zach LeBeau. Tokens can also be exchanged for perks, like special access at a concert or early access to a new film release.
- Eliminating middlemen and undermining the influence of industry gatekeepers.Tokenization lets artists raise funds upfront without relying on an advance from their record label. Meanwhile, distributing content via blockchain would allow artists to skirt streaming platforms like Spotify to earn royalties on their own terms. Of course, the success of this model hinges on attracting users, but there are reciprocal incentives in place — on both the artist- and consumer-side — for it to take off, and LeBeau believes this model could become mainstream in as little as two years.
One artist who has a passionate and large following is already onboard with SingularDTV's vision. Gramatik, the New York-based hip-hop and electronic artist, is the first musician to sign on the company's tokenization program, and he's set to launch 100 million GRMTK tokens on November 9. "This is something artists have been dreaming about since the beginning of time, to be free of gatekeepers, and to communicate freely — and even be in a business relationship — directly with their fans," Gramatik told BI Intelligence. It's not hard to imagine his excitement spreading to legions of artists and fans in the near future too.
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