Suddenly, Spotify Goes Blockchain, Aims to Improve Tracking of Royalty Payments
Spotify is set to use Blockchain technology to improve tracking and processing royalty payments.
Spotify, the largest European streaming music platform, has announced its decision to acquire Blockchain-related startup Mediachain.
According to Investopedia, the main objective of the acquisition is to improve Spotify’s tracking and processing of royalty payments thanks to the distributed ledger technology.
Mediachain was launched in 2016 thanks to seed funding received by Andreessen Horowitz and Union Square Ventures.
The New York-based startup created a peer-to-peer database to register, identify and track the online distribution of creative works. This was made possible through Blockchain technology, which works as a timestamp and certification of the ownership of content.
Through its new partnership with Spotify, Mediachain wants to enhance the ability of musicians to prove ownership over their composed music, in order to also receive payment of royalties.
Royalties payments: who earns them?
This is one of the biggest problems that Spotify currently faces. In the case of independent musicians and labels, understanding who owns the rights to a particular composition is difficult for streaming platforms to determine.
In order to solve this issue, Mediachain indicates that "a music blockchain would be a single place to publish all information about who made what song, without have to trust a third-party organization."
In assisting artists to receive royalties payments through the use of Blockchain technology, Mediachain could help Spotify to obtain a competitive advantage over its competitors, reaching more producers, artists and labels.
Blockchain and music
In addition to the specific case of Mediachain and Spotify, Blockchain could revolutionize the music industry. That’s what Benji Rogers, founder of PledgeMusic, had in mind when he decided to create dotBlockchain, a company with a desire to disrupt the music sector thanks to a new media format. In fact, dotBlockchain wants to develop a new media and architecture to benefit musicians, composers, among other artists.
This format will be created via an open source protocol and licenses, leveraging the Blockchain in order to have a fair and transparent way for music artists to express their rights and wishes for commercializing their art. Also, it should prove useful in improving the efficiency in which music is delivered worldwide.