Before the 1990s, record labels tightly controlled all facets of the music industry from musician funding to distribution and even royalty payment collection.
This all changed with the rise of the internet and file sharing platforms such as Napster and Limewire, who made music available anywhere, anytime, and to top it all off, for free.
The rise of file sharing platforms crippled the record labels control over the music industry because they no longer controlled the distribution networks of new music, nor did they have time to recover as consumers moved on to digital music distribution.
The growth of digital music distribution led the industry to lose millions of revenue from lost sales of physical distribution channels, and non-traditional companies arising to cut themselves a piece of the pie.
Many thought the rise of file sharing platforms, which we deem “the first wave of disruption,” would lead to musicians reprising control of the industry because they no longer needed to rely on record labels for promotion and distribution.
However, that did not occur, and instead, the music industry is still controlled by the record labels, albeit, at a smaller percentage than before the 1990s.
Musicians did not feel the full benefits of the first wave of disruption, as the change in distribution channels hurt record labels sales of physical music, but did not remove their control over other areas of the industry.
To combat the issues left by the first wave of disruption, many are touting blockchain technology as the potential catalyst for change in the music industry, which we term “the second wave of disruption.”
Looking beyond the hype associated with blockchain technology, there are real-world uses of the technology to revolutionize the music industry, and dare we say, transition the music industry to a musician-centered ecosystem.
The pioneers pushing for blockchain in the music industry includes members stretching from all areas of the music industry and the blockchain industry.
Though, with any transition, there will be issues that must be managed to help current participants move to blockchain-based systems (“Legacy-to-Blockchain”).
The issues Legacy-to-Blockchain pioneers will face come not only from the current music industry, but also from the inherent limitations of blockchain technology and associated communities.
In this report, we identified the primary issues we expect Legacy-to-Blockchain pioneers to face, and possible strategies to mitigate or resolve them. Additionally, we examined possible blockchain-based interventions applicable to the music industry.
Thank you for reading a short summary of “A Preliminary Review of Blockchain in the Music Industry!”
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Originally published on Medium