Blockchain, the answer for Artists?
Before starting Mediachain Labs, co-founder Jesse Walden also helped co-found Cool Managers, an artist management firm. He represented independent musicians including Solange Knowles, Blood Orange, and Majical Cloudz. In a blog post, he wrote that he became “entangled with a host of problems” with music data. What a surprise, another non-technical founder of a music-tech startup that actually can pin-point real problems in the business...not make up new ones.
So, Spotify acquired Mediachain Labs yesterday. Mediachain operates on blockchain technology. Spotify hopes to fix attribution problems that has widely plagued its service. Last year, Spotify paid the National Music Publishers’ Association (NMPA) over $30 million to settle unpaid royalties.
“The problem is simply that no central database exists to keep track of information about music.” There it is! But what’s the solution? Walden viewed blockchain technology as the way to solve the problem with metadata and help artists get paid.
If you dont know much about blockchain, it's the core technology behind Bitcoin. It is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. This allows for transparency and accountability when using this virtual currency. Something Kobalt has tried to do, but its still centralized financially...what I love about this idea is that it's peer to peer!
Essentially embedding this tech in Spotify will aim to track money direct from consumers to the artists without a third party. Sold.
The NMPA estimated that 25% of Spotify’s songs weren’t licensed, so this will hopefully solve the problem of allowing artists to remain independent without needing third party administrators to collect / negotiate their income.
“If we want to enable maximum value flow and creation, we’ve got to solve the data problem first. Given that context, we should view a blockchain solution as a simple metaphor for shared, networked, media metadata.”
Wow, finally we're nearing a peer-to-peer royalty tracking system. Never thought I would see the day. Pleasantly optimistic about the future.
I'd love to hear what you think!
Co-Founder | Partner.ly, Inc