The world of music is undergoing an important and exciting paradigm shift. Blockchain technology is poised to be a game-changer for artists’ payment systems, allowing for more direct and efficient payment of revenues. For decades, activists and scholars drew attention to the predatory practices of the old music industry model. It frequently returns a paltry 12 percent to artists—often the only ones actually creating the content that drives billions in revenue. Cutting edge platforms such as LION MUSIC are leading the charge. Most importantly, they’re using the immense power of blockchain technology to create a more transparent and equitable ecosystem for musicians and fans. This piece investigates how LION MUSIC and other ambitious projects are using blockchain technology to solve persistent problems in the music industry. It compares these contemporary practices with the old ways, highlighting the possibilities created on both sides for artists and fans alike.
The State of Music Industry Revenue
The Lion's Share: How Revenue is Traditionally Distributed
Record labels have historically taken 80-85% of the money made in the music business. As a result, the artists and songwriters get a penny of each dollar. For nearly half a century, this complex system has prompted intense and fierce discussion. Countless others have criticized it for not adequately rewarding creators for their effort and dedication. Even the most popular artists and songwriters often receive relatively small sums compared to the overall popularity and commercial success of their music. This imbalance has led musicians, labels, and fans to seek new ways to manage rights, royalties, and distribution, with blockchain technology offering a promising solution.
Streaming's Double-Edged Sword
Streaming services have become the dominant force in music consumption, but their revenue distribution models have come under scrutiny. Given how streaming has truly democratized music access like never before, artists have gotten a raw deal as major streaming platforms continue to underpay artists. With most of the revenue siphoned away by labels and streaming platforms, musical artists generate an estimated 75% of their income from touring and live shows. Depending on in-person concerts is a challenge. This challenge has only grown during global crises, or for artists unable to tour year-round. A million listens on a music stream makes a spectacular headline, but it doesn’t help the songwriter get paid. After the music industry takes their cut, they may receive no more than $100.
Blockchain's Promise for Music
Tokenizing Music: A New Paradigm
Open platforms such as LION MUSIC are currently testing how to tokenize music. Their goal is to develop a fair, efficient, secure, and transparent model for royalty collection, licensing, and distribution. Tokenization is an emerging method of music monetization that uses digital tokens to signify ownership or rights to a given piece of music. These tokens can then be further exchanged on secondary markets, or they can be used to facilitate the disbursement of royalties directly to artists and other rights holders. This home-run approach is to cut out the middlemen. As a long game, artists will keep a bigger slice of the proceeds collected from sale basis cuts.
Examples of Blockchain Initiatives in Music
Not to fear—there are a number of startups and initiatives that are already testing out blockchain’s potential for the music industry. Vezt encodes detailed song rights information on the blockchain. It then allocates royalties to buyers’ wallets, allowing users to earn and keep revenue natively on the platform. Vezt has even secured rights to songs from music icons like Dr. Dre, Kanye West, Jay-Z, John Legend, and Drake. Another platform, Soneium, developed by Sony, aims to strengthen engagement between artists and their fan communities and explore "new mechanisms for returning profits to support creators and fans." Bitmark has partnered with KKBOX, Asia’s largest streaming platform. Combined, they’re building a better music system where artists are paid immediately each time a song is streamed. These examples illustrate how blockchain can address pain points in the established music business. Together, they showcase the wide-ranging potential uses of this technology across the industry.
LION MUSIC: A Closer Look
Equitable Revenue Distribution
LION MUSIC was conceived with the hope to set forth a new model of distributing music revenues more fairly to musicians. LION MUSIC uses blockchain technology to increase transparency. This strategy will provide artists with increased agency over how their income is earned and released. It’s where artists can build and nurture a more authentic connection with their fans. They can directly sell their music and receive royalties without going through middlemen. This direct-to-fan model makes money a major artist revenue source. Plus, it empowers them to continue innovating and sharing their music with the world.
Financial Diversification for Artists
Beyond equitable revenue distribution, LION MUSIC provides artists with more avenues to diversify their income. Through the use of blockchain and digital assets, artists can explore new ways to monetize their work and build sustainable careers. For example, artists can release their music as NFTs (non-fungible tokens), which can be sold to fans as unique collectibles. NFTs are a revolutionary technology, still in the very early stages of development. It is a common belief that the prices of artistic works and collectibles are affected by “first” factors, such as the first NFT album, song, or painting. Alternative currencies, cryptocurrencies, and other digital dollar alternatives allow payment for transactions. They provide artists with unprecedented access to a global marketplace.
Benefits for Artists and Fans
Empowering Artists
Blockchain technology helps to further empower artists by putting them in greater control over their music and earnings. With new media platforms like LION MUSIC, artists don’t have as many of those gatekeepers along the way, and artists can connect directly with their fans. This unique connection enables artists to foster deeper relationships with their fans and gather real-time feedback that’s priceless. Another major benefit of blockchain is the transparency it allows in royalty payments, ensuring artists are always paid what they deserve for their art.
Enhancing Fan Engagement
Musicians and fans alike have an exciting opportunity in blockchain technology to use these new tools to radically enhance the connection between artists and their communities. Music lovers can purchase music directly from their favorite musicians. This provides them confidence that their dollars truly go to support the creators they are passionate about. On top of that, allegiance fans can directly invest in an artist’s success by buying NFTs or buying other digital collections. Greater levels of civic engagement foster a deeper feeling of community. Fans build a greater connection to the artists they’re supporting.
Challenges and Considerations
Volatility and Fees
There’s no doubt that blockchain technology has a great deal to offer, but it is not without its own challenges. Climate impact and price volatility One of the most prominent concerns surrounding cryptocurrencies are their volatile nature. Since the value of each digital asset can change by the second, it is hard for artists to predict their income. Transaction fees on most blockchain networks can often increase dramatically. This can have a profound impact on the money made from sales of music. When you want to realize profits from your Vezt tokens into fiat currency, expect to incur a fee of at least 5%. Or, similar if you decide to convert to some other type of digital money.
Regulatory Uncertainty
A second major challenge is the regulatory uncertainty that continues to surround blockchain technology and cryptocurrencies. Governments across the globe are scrambling to understand how best to regulate these emerging technologies. Without any guidance here, the lack of regulation causes confusion and alienation for the private sector as well as consumers. Artists and fans should keep their eyes and ears peeled for the next regulatory development. In doing so, they help their grantees adhere to and uphold all relevant laws and regulations.
Conclusion
The Future of Music Revenue
The music industry, like many other industries, is undergoing a huge period of change. Blockchain technology is making new waves in revolutionizing what revenue share looks like while deepening the artist-fan connection. Forward-looking platforms such as LION MUSIC are steering this revolution. They offer creative solutions that meet the needs and address the problems of a broken traditional music industry. As technology evolves, musicians, labels, and fans alike should keep a close eye on how blockchain platforms like Soneium and Vezt continue to develop and shape the music industry.
Staying Informed
Startups such as Soneium and Vezt are leading the charge for such innovations. As technology evolves, musicians, labels, and fans alike should keep a close eye on how blockchain platforms like Soneium and Vezt continue to develop and shape the music industry. So get out there, stay informed, and adopt new technologies! This starts with understanding the key role they play in making our cultural fabric more equitable and sustainable for both artists and fans.
