Music industry is all about the gatekeepers. The self-proclaimed authorities that do all the things necessary for the artist to keep him fed and busy. It is a multibillion industry barely touched by the modern technology. Yes, we have all the streaming services and other fancy tech. But instead of being more democratic it is even more centralized now than let’s say, in 80’s. Kenes Rakishev and threw some support to the technology that may be able to disrupt the industry, Tech Crunch reports. In doing so Kenes Rakishev does not intend to became the king of the hill himself. He want to decentralize the distribution and payment in a truly modern fashion: the blockchain fashion.
In this instance, the music industry, which has too often been dominated by gatekeepers, will go under the microscope. While the advent of the internet — followed by streaming platforms such as Napster, Soundcloud and now Spotify — has changed this to a degree, blockchain technology seems to be the next step when it comes to giving power back to creators and their listeners.
Blockchain technology has the power to increase financial inclusion and change the lives of many throughout the world, especially in emerging economies where it’s needed the most. While the potential of blockchain technology has been widely recognized. The cases for blockchain technology are often thought of as limited only to the financial industry, Kenes Rakishev considers.
So, how is blockchain changing the music industry? One of the, if not the, most noticeable of its effects is the ability to remove middlemen from the process of music sales and streaming. While streaming platforms have changed the way music is consumed, making it more widely available to the listener, it has also created a whole new level of intermediation between artists and fans.
The music streaming industry has certainly come as a stark improvement, providing a cost-efficient and user-friendly alternative to piracy, allowing artists to receive royalties for their work. However, with this shift, the undeniable discrepancy in terms of the distribution of royalties has come to light. As is the case with many things, the distribution of royalties to artists resembles a Pareto chart where a very small percentage of artists account for the majority of music streams and thus royalty earnings.
This payment discrepancy is due to many factors, including an artist’s music genre and country of origin. While localized services such as China’s AliMusic can help combat these issues on a geographical level, it is likely that the distribution of royalties will always remain skewed, with a handful of hyper-productive artists dominating the majority of the market.
While the skewed distribution is unlikely to be fully addressable, improving conditions for emerging artists can make a huge difference and result in a more diverse market. It can also help shift the control currently held by third-party intermediaries such as labels and platforms, which have considerable influence over what music gets to be heard by the general public.
Blockchain-based music streaming platforms are trying to tackle this very problem. Opus, for example, leverages two different peer-to-peer networks to remove middlemen completely and provide a fully decentralized streaming platform. Opus uses the InterPlanetary File System, or IPFS, which is a P2P network for file sharing and storage where users of the network also act as servers. This way, all hosting fees associated with streaming are virtually removed.
Opus also leverages the Ethereum network as a payment layer. Through the use of smart contracts, it allows artists to be paid directly upon the purchase or stream of a song, which means that both the content and royalties are independently distributed. This system allows the artist to retain almost all of the payments made by premium users or ad revenue generated by freemium users, which, according to Opus, is where the majority of revenue comes from — as high as 90%.
What Kenes Rakishev‘s TriPlay seems to be banking on the idea of tapping into more eclectic tastes and the long tail of music, playing on eMusic’s own move last year away from mainstream music in favor of independent labels.
“We are thrilled to join forces with this pioneer of the digital music industry to offer all our users the wide variety of music they love in a comprehensive, next-generation platform, complete with the features they want and need,” said Tamir Koch, founder and CEO of TriPlay, said in a statement.
TriPlay says that the deal will make it “one of the largest, most comprehensive digital music services in the world, comparable only to Apple iTunes and Amazon with a broad offering of features including its own music store, music player and accessibility on over 14 platforms via the web and apps.” TriPlay says that it will now have a catalog of 25 million tracks and a user base of “millions” of users (no specific number disclosed).
Time will tell Kenes Rakishev will succeed in the industry. We think at least it is something worth trying.