Last year, Spotify failed to obtain mechanical licenses (copyright holder’s control over the ability to reproduce a musical work) for many songs on the platform. This harmed music publishers and artists. Spotify had to pay them over 20 million plus a 5 million penalty!!!
I have been using Spotify’s free version for the past month, enjoying the repetitive ads with great joy, waiting to see if I am ready to invest in the premium version. I am still testing out the platform and researching some information.
As a consumer of music content and an amateur musician, I care about the content creators and it bothers me that the platform I am using would be involved in such a dispute. I want to know where my monthly subscription money is going.
The excuse for not paying these royalties was that Spotify did not have access to the necessary data to determine whose claims were legitimate and who were the parties involved.
No database covering all existing music rights exists.
Instead of creating a centralized database with music rights information, Spotify turned to blockchain.
Indeed, I recently found out that Spotify has acquired the blockchain startup Mediachain Labs, developing better technology to connect artists and other rights holders with the tracks hosted on Spotify’s service. The technology includes a decentralized, peer-to-peer database to connect applications with media and the information about it, as well as an attribution engine for creators, and a cryptocurrency that rewards creators for their work.
The vision for the problem with attribution is a shared data layer, which “is key to solving attribution, empowering creators and rights owners, and enabling a more efficient and sustainable model for creativity online.”
We are still far from perfection in terms of distribution, access, and profitability for content creators, but blockchain is helping us get there.
It is believed that streaming services benefit both users and content creators. However, the platforms are often accused of getting the giant’s share of the profits, leaving little to the artists. Artists like Taylor Swift have even refused to use the platform and turned to Apple Music instead, as Spotify pays the artists much less.
Platforms using a mainly centralized system such as Spotify or Netflix are our gateways to content, thus control over the flow of information and money in the music and entertainment industry still lies in the hands of a few —the platform owner, labels, and other organizations.
Blockchain has the power to reintroduce fairness into the content playfield. Sustainability is a trendy matter in consumers’ minds such as myself, and I am more convinced to use platforms such as Spotify if I know that what I am paying rewards the right people appropriately.
We believe blockchain is only the first step towards achieving that goal. There should be no limits once the transparency train is started.
How do you think the future landscape of content will look like?
Dear artists, out there, how will you leverage the music industry’s rising blockchain to your advantage?
Bachelor of Commerce Graduate & MiM Candidate at IE Business School
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