Blockchain and Tokenized Music Catalogs: Future of Music Industry
Summary:
Sergio Mottola, CEO of Music Protocol and the Web3 Music Association, anticipates a future where music catalogs are tokenized, revolutionizing the industry. In an interview, Mottola described how emerging technologies such as blockchain can transform music distribution, IP management, and revenue generation, in an industry where streaming dominates. He suggested that tokenizing music intellectual property could lead to more accessible music, better data availability, and potential collaborations with metaverse developers. Moreover, he outlined how blockchain can assist in handling rights and IP generated by artificial intelligence efficiently and transparently.
The music sector is on the brink of a radical metamorphosis, incited by the increased use of music streaming services that are altering the ways people listen to music. Music streaming services now command an astounding 84% of the entire music industry's revenue, bringing in more than $17 billion annually, according to Forbes data released earlier this year.
Yet, music streaming is not the only digital innovation reshaping the industry. Emerging Web3 technologies like blockchain and tokenization are gradually transforming opportunities for everyone involved in the industry, from artists and fans to distributors. Leading this change is Sergio Mottola, the head of Music Protocol and the Web3 Music Association. He imagines a world where music catalogs are tokenized, leading to an innovative, game-changing scenario for the sector. Mottola, during the Proof of Talk 2024 conference in Paris, explained to Cointelegraph how blockchain tech could revolutionize several aspects of the music industry, such as distribution, intellectual property (IP) management, and revenue generation.
He discusses the conundrum that faces an industry increasingly dependent on streaming - how can you incentivize people to buy music? With streaming's incredible earnings, revenue from individual track sales pales in comparison. The present model, heavily dependent on streaming, poses challenges for artists and industry stakeholders in successfully capitalizing on their work.
Mottola illuminated this problem while indicating Web3 technologies such as non-fungible tokens (NFTs) that musicians have used to release new tracks or give exclusive content to their fan base. People still purchasing music are primarily industry professionals like DJs; for the average listener, this behavior is becoming scarcer.
While alternative models like Patreon help create more revenue streams, they do not directly tackle the fundamental problem of music distribution and IP monetization. The pertinent solution, according to Mottola, lies in integrating music into the chain.
Tokenizing the music IP permits the major industry players -Universal Music, Warner Music, and Sony- to digitize and distribute their catalogs through blockchain, creating a framework where users can acquire licenses and use the IP in diverse creative endeavors.
Such a paradigm shift can have a substantial impact on virtual environments like metaverses, where integrating music currently presents a significant challenge. Tokenizing music IP would facilitate its smooth inclusion into these virtual worlds, improving user experiences and generating new income streams. Mottola spoke of potential alliances with metaverse developers in the Web3 space, such as Animoca Brands and Mythical Games.
The tokenization of this music catalog involves delineating the IP onchain, selling licenses that anyone can buy, and allowing users to curate unique experiences with the music. Besides making music more accessible, this method also provides a means for better data accessibility and revenue generation.
The upcoming role of music intersects significantly with artificial intelligence (AI), a factor that has already created copyright infringement issues for top labels and artists. More and more IP will be brought to the market because of AI. With the use of blockchain and the Music Protocol, the IP registration, license issuance, and distribution become more straightforward across the value chain.
Mottola believes this system could provide improved capital efficiency and liquidity in the music industry by employing blockchain and digital assets. At the same time, it can monitor rights more transparently. While acknowledging that other music applications may have differing viewpoints on the industry's future, Mottola confidently states: "We're not discussing how the music industry will operate among themselves, but rather assisting them in utilizing this new tool called blockchain to reduce friction, solve issues, and secure their future.
Published At
6/13/2024 4:59:16 PM
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