Bitcoin and the Music Industry: Can BTC Disrupt Streaming Royalties?

In the last few decades, the music industry has changed massively with the emergence of digital downloading, streaming services and social media, which has changed how artists market and place value back on their work. But with all these advances, many musicians still struggle with fair payment, especially from streaming platforms that pay pennies per stream. With the rise of cryptocurrency, however, a potential solution to this long-standing issue is emerging: Bitcoin. Now, Bitcoin, the world’s first decentralized digital currency, gives artists the opportunity to get paid directly by their fans without intermediaries like record labels and streaming platforms. The direct-to-artist model could fundamentally change how royalties are handled, making a more transparent, fair and profitable system for the musicians. However, just how likely is this disruption, and can Bitcoin truly alter the streaming royalties game? It’s already done so in the investing realm with platforms like Binance leading the way; however, let’s look a bit closer at the part it can play in streaming royalties

The Current State of Streaming Royalties

At the moment, most musicians do not own the means to distribute their music globally, so they rely on the likes of Spotify, Apple Music and YouTube. Although these platforms have unmatched reach, the catch is that there aren’t large payments for artists. Spotify’s payment per stream is on average somewhere around 3 to 5 cents per stream, and it would take millions of streams to start making a decent income. For independent artists or those not famous enough to have a big following, the reality of making a living off streaming is grim.

Additionally, royalty payments are often so complex that there is a network of intermediaries, including record labels, publishers and collection agencies, that take a portion of the money before it ever reaches the artist. This fragmentation results in delayed payments, no transparency and inefficiencies that only exacerbate the issue for musicians trying to make it in a digital age.

How Bitcoin Can Disrupt Music Royalties

Bitcoin may hold the answer to this problem regarding streaming royalties via its decentralized nature. With Bitcoin, musicians could work around conventional payment methods and receive their due straight up from their fans, instantly, without third parties involved. Here are some ways Bitcoin could revolutionize the music industry:

• Direct Payments to Artists

Another major benefit of Bitcoin is that fans can now pay artists directly (eliminating middlemen streaming platforms and record labels). With Bitcoin, artists could begin direct-to-artist payment models where fans can pay artists for music, concert tickets, merchandise, or any exclusive content in Bitcoin. What this peer to peer payment system would provide to the musicians is more control over their earning and they keep the majority of their revenue.

For example, blockchain-powered platforms such as Audius and BitSong are already experimenting with direct artist compensation models. They also facilitate payments directly in cryptocurrency for artists who would prefer the benefits of faster and more transparent transactions.

• Instant, Borderless Payments

Bitcoin is one of the few coins that can afford instant, cross-border transactions. However, now, musicians regularly wait too long to get paid and royalty money is split across multiple countries. By using Bitcoin, these delays can be done away with as artists are paid immediately, no matter where their fans are based.

For international artists who rely on income from global listeners, this could be a game changer. Rather than waiting months for their royalties to drip through the normal financial system, Bitcoin lets them get their profits straight away without astronomical currency exchange fees.

• Transparency and Accountability

The underlying technology of Bitcoin is blockchain, an immutable, transparent ledger of all the transactions. This transparency could be a break from the murky, and often opaque, world of music royalties, where artists simply don’t have visibility into how much they are owed or how they are being paid.

Transactions are recorded on a blockchain that tracks Bitcoin transactions made and how much the artist is making. This would push accountability and reduce disputes over unpaid royalties enabling artists to have a more holistic knowledge of their income streams.

• Enabling Independent Artists

Bitcoin could bring financial independence to independent artists, who are sometimes the most vulnerable to the existing music industry model. Accepting Bitcoin payments directly from fans would allow independent musicians to have more direct and lasting relationships with their fan base and a sustainable source of income without requiring the aid of streaming platforms or major labels.

Another avenue would be crowdfunding through Bitcoin for a musician to fund projects or tours or even new albums without having a traditional record deal. By sending small amounts of Bitcoin, fans can directly support artists, as these amounts can really add up if you have dedicated fans.

Challenges and Considerations

The excitement around Bitcoin potentially disrupting the music industry is real, but there are a few hurdles to overcome before broad adoption in the space.

Volatility: As anyone in the art world knows, Bitcoin price volatility could pose a risk to artists who depend on stable income. Once a payment is made, if the value of Bitcoin changes significantly, artists could lose part of their earnings.

Technical Barriers: Not all artists or fans know Bitcoin or how to use it. If you aren’t tech savvy, setting up a Bitcoin wallet and understanding how transactions work, and managing cryptocurrency, can be intimidating.

Regulation and Adoption: Although Bitcoin adoption is still in its early stages, there are still regulatory hurdles in the way. The music industry is a highly regulated space and it’s hard to predict how governments and institutions will behave towards massive use of Bitcoin in this field.

The Future of Bitcoin in Music 

There are obstacles, but Bitcoin could transform how musicians are paid. The idea of musicians making a more fair share of their revenue becomes more feasible as more platforms and artists try the Bitcoin payments and decentralized models. In time, Bitcoin may well be the answer that gives artists a path away from outdated royalty systems and into their own earnings.

Bitcoin is a promising innovation in an age of digital advancement and it very well may be only the start in its effect on the music business. Through its capacity to make direct, borderless, and transparent payments, Bitcoin could actually upend streaming royalties and perhaps redefine how musicians get paid for their work.

La Rédaction C.

L'équipe éditoriale de Cointribune unit ses voix pour s’exprimer sur des thématiques propres aux cryptomonnaies, à l'investissement, au métaverse et aux NFT, tout en s’efforçant de répondre au mieux à vos interrogations.