Bitcoins were introduced as a revolutionary system of digital currency. It is considered revolutionary because of various reasons, the primary being no third-party involvement. It is a digital health market stored in cloud spaces that are non-tangible assets and have no interference from the government of any nation. It also serves as a concrete digital database of economic transactions without leaking any personal information. Any industry can use this currency and the entire system attached to it to its leverage and make the best out of the same. The global music industry is an unorganized sector that can also make the best use of this currency. The music industry can become a more organized sector and ensure timely payments of royalty and fees for musicians which is still a dream in the industry. Blockchain theory and digital currencies have already been welcome in the fashion and fine arts industry and they are emerging as more organized industries that are exploiting their potential to the fullest.
How Can Bitcoins Benefit the Music Industry?
The discussion here is specifically about the industry producing music records and labels and how bitcoins can benefit the existing artists. From the very nascent stage of the existence of bitcoins, it has been peer-based networking which is more distributed and not controlled by any central power or force. Therefore, the independence of the currency plays an important role in the absorption of this mode of exchange in any industry. Here are a few possible ways how the music industry can use bitcoins to its advantage:
- Dealing with Piracy: Statistics say that piracy in the music industry has cost $ 12.5 M, 71000 jobs, and $2.7 B in artist earnings and royalties in the USA alone. Therefore the damage to the global music scene can be estimated due to piracy of music albums and single releases. Easily downloadable content being available for free has become a major revenue slaughter. It is primarily because the music industry is an unorganized sector. Cryptocurrencies come with security and complex algorithms that can be cracked only by coders. Attaching bitcoins to the music industry will strengthen its security and prohibit it from piracy.
- Ownership Rights: There have been enormous and lengthy legal battles regarding ownership of particular music albums or recordings. Intellectual copyright came into being much later as law and despite it, there have been unresolved cases regarding ownership. Distributed ledgers are used in bitcoins which hold the records of all transactions related to a particular blockchain. These open sources with all information stored in the cloud space will help resolve many ownership issues.
- Contracts made smarter: When a particular music recording crosses international boundaries, the contract, royalty rights, and many other legal procedures undergo alterations and change. It becomes almost impossible to keep track of royalties coming from various nations, according to their national laws. Using bitcoins will ensure a single method of payment in royalty without the interference of any government or political boundaries. This will make the contracts with artists simpler and smarter.
- Fair Payment: Royalties for music vary across various platforms for artists leading to the artists complaining about unfair and non-transparent royalty policies. If cryptocurrencies are used as payment currencies, the process becomes transparent across all platforms. Also, the revenue earned by a piece of particular music released is all recorded with each purchase. The artist can calculate the total amount collected for his/her particular production.
- Timely Payments: Due to legal procedures and international laws, many artists receive their royalty payments even after years of their release. This becomes difficult for struggling artists and alternative funds have to be arranged. In the case of using bitcoins, payments can be made instantly and no delays are entertained. Therefore, artists are paid on time.
In spite of having many advantages, Bitcoins are not a foolproof method of exchange in the music industry. But it is being adopted by many major labels and brands to mitigate the existing problems in the industry.