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Chain Reactions

Is Blockchain a better way of managing musicians' rights?

Getting your fair share has been a cause of debate, dissension and courtroom battles in the music industry for years. To ensure the correct rightsholders are identified and paid when a song is played, information has to be synchronised across the industry. Currently there are many different contracts, databases and lots of data, which means many musicians and other rightsholders can miss out on royalties, sometimes through something as simple as a misspelt name. One solution could be blockchain technology.

What is blockchain and how does it work?

Blockchain is a digital ledger or accounts book in which transactions made in bitcoin or other cryptocurrency are recorded chronologically and publicly. Each entry or ‘block’ made in the ledger contains three elements:

  • Data: In the case of a purchase it might be who bought something from whom and for how much.

  • A hash: This is like a fingerprint or an encrypted identifier. It makes each entry and its data unique to that block.

  • The hash of the previous block: This is what helps to make the chain or link secure. If the hash of the next record does not match the previous one then the chain is broken.

Blocks also have an algorithm called ‘proof of work’ which confirms the legitimacy of the transaction before a new block can be created. Because blockchain records each transaction, it’s like a peer to peer network rather than being managed by a third party, such as a bank. Anyone can join the network and when they join they each receive a copy of the blockchain. Blocks that are tampered with will be rejected by the network.


Jane purchases the song ‘Happy Computations’ by Byte Rate from a streaming company. She pays for the song and a block is created with a unique hash and her account is debited the amount it costs. A smart contract is then created which holds an agreement between Jane and the streaming company and describes how the money is distributed. The transaction is stored as data with a unique identifier, the hash, and a record of the previous hash. If these two don’t match, the chain will break and the money won’t be paid down the line.
This system means the right person is paid instantaneously in cryptocurrency as soon as a block is created and verified. It's secure because each block contains the unique identifier and each transaction is stored across the network of everybody making these transactions, so hacking into a single computer would not break the network. Finally, because each transaction is secure, it cuts out the need for intermediaries such as credit card companies or platforms such as collecting societies - it's a peer to peer system.

How can blockchain help the music industry?

Information about the rights and ownership of music and each transaction can be stored on a block and timestamped with a unique identifier providing a clear record of each transaction. Stakeholders could then be rewarded instantaneously because cryptocurrencies support micropayments. This would work well for services such as streaming companies and would enable all participants (sound engineers, producers, session musicians) to be paid the correct amount as soon as the transaction takes place, based on the data that would be recorded when a song was played.

The use of blockchain would:

  • Help lessen ownership disputes and copyright issues as each piece of data or musical work could be uniquely watermarked on the ledger.

  • Decrease illegal reproduction and copying of music as the data would be highly secure, helping to combat another issue that’s prevalent in the music industry.

  • Remove intermediaries because the ledger is not owned by anyone like purchasing platforms, collection societies such as the PRS, distributors and financial brokers who currently all take a cut from the revenue. This would benefit artists and songwriters who would get paid more every time their work is played.

So, will this happen?

Clearly blockchain offers many benefits to the music industry although implementing the technology could take time. However, there are also worries that the scale of the music industry is too vast for blockchain to cope with, which could mean multiple blockchain networks would be required, which in turn would take us back to the problem of reconciling one system with another. There is also the question of who pays for the computing resources needed to execute all the smart contracts every time a song is played. Despite these hurdles, blockchain technology could bring great rewards and security for artists and other rightsholders within the music ecosystem. Still stuck on Blockchain? Here’s a helpful video.


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