AnalyticsBig Data

How to solve the big data problem in the music industry has been a question for many years, but emerging blockchain technology might provide the solution the labels, producers, and distributors are looking for.

It’s an old joke in the music industry that every overnight sensation was actually years in the making, and the same could be said of product some are predicting will be the savior of the business. The concepts behind blockchain technology go back many years, but it’s only with the rise of bitcoin that people have really started paying attention and thinking about how the blockchain can be applied more globally. In the span of a few years, the blockchain has gone from a something associated by many with illegal purchases to a technology that Goldman Sachs is predicting will “change everything.”

Can the blockchain solve the music business’s big data marketing problem?

Right now, many artists face an asymmetric information problem — while their fans know where to find their music and offer financial support, they have very little data about those fans. Most of the data offered by labels and streaming services is too general to be really useful, especially for smaller artists — knowing that women age 25-45 who live in Nashville like your music is all well and good, but knowing the a 29-year-old woman named Lisa loves your tracks most of all, and where to email or call her, is worth far more.

On the flipside, many people don’t want all their data to be shared with the artists they listen to or the labels who release them. The blockchain could allow direct to fan distribution that puts the fan in control of how much information they share and allows the artist to reach out to superfans. It will also allow for a greater range of pricing — if someone wants to pay more than $1 for a track, or $10 for an album, they can contribute whatever amount they want.

Right now, the amount of data being shared with artists and labels is enormous, but very little of it is all that useful or applicable.

Blockchain will make payments more transparent

Many artists are frustrated with their payments from streaming services, and rightly so — they get a report of how many times their tracks have been played, and then months later, they get a check for a seemingly random amount. Streaming services right now pay the labels, and then the labels divide up the take among artists, but the accounting isn’t transparent. While no one is accusing the labels of doing anything wrong, the process is complicated and slow.

The use of smart contracts on the blockchain will help solve many of these problems, Revelator CEO Bruno Guez explained recently at the Future of Money summit. Artists will be able to register a composition and/or recording on the blockchain, and that can be associated with a smart contract that details who gets paid what amount. Payments can be turned around much more quickly; artists and streaming services will be able to see exactly where all the money is coming and going; and labels can spend their resources more wisely.

The more information that is uploaded to the blockchain, the better — right now, there is no central database for copyrights and song registration. If the blockchain can become the central repository for music metadata, it means more artists will get paid.

Given the momentum, 2016 is likely to be the year that labels, producers, and distributors start taking the blockchain seriously.

Turntable.fm co-founder Billy Chasen recently took to Product Hunt to unveil his latest creation — DoubleLock. The product creates two “keys” which must both be entered in order for a file to be unlocked or modified. Perhaps in light of the Ashley Madison hack, Chasen’s use cases involved naughty pics and videos, but there are plenty of less salacious uses for a product like this. In cases of severe illness or death, you could provide two trusted friends with keys to unlock social media and personal finance accounts — a hedge against anything going off the rails if one of those two people turn out to be untrustworthy. While DoubleLock is still in its infancy, it might be the product that introduces the idea of a multi-sig smart contact into the mainstream.

Smart contracts are contracts that are automatically executed by a computer program; in order for them to be changed, all parties must use a key to unlock the contract and consent to the modifications. The idea of the smart contact has been around since the early nineties, but because there was no one universal and digital financial system to facilitate payments, the concept languished. With the rise of the blockchain and bitcoin, however, interest in smart contracts has grown.

For artists, this could mean the dawn of a new era of payment transparency. At the simplest level, smart contracts could ensure that each band member gets his or her fair say when anyone wants to change a deal. We’ve all heard horror stories about unscrupulous managers or band members who cheat other members out of royalties; most recently, this narrative appeared on the big screen in “Straight Outta Compton.” An expectation of transparency, facilitated by smart contracts, represented a step forward for artists who want to be protected and make sure they are compensated fairly.

Assuming smart contracts can be used on a mass scale, this would also give artists more negotiating power. If a group of artists all have contracts with a single party, they could collectively bargain in order to get better terms, because they all hold the power to hold out until they get a fair deal.

On the back end, smart contracts have the potential to open up the black box system that has come to characterize most payouts. If you follow music and tech at all, before long you’ll likely run into an artist sharing a story about getting a check for a small, random amount and being completely befuddled about how ten thousand plays worked out to twenty-seven cents. It’s the same record label math that led to an artist who sold a million record still not recouping. But a smart contract system would allow artists to track money every step of the way and for each member to make sure they were being paid the correct amount. They also allow for payments to be made automatically — no more waiting around for a check or a deposit to clear.

Smart contracts could also act a defense for major labels. If they put up money to pay for expensive producers and guest verses, they should be able to make the money back, and having everything laid out clearly creates a system where everyone knows where the money is going.

There are a few other benefits of smart contracts that artists might want to explore. Some developers are working to combine the blockchain with the “internet of things;” for instance, if I rent a house on AirBNB, as many touring artists do, the house could unlock automatically once a payment clears. Artists who rent their equipment or vans while they’re not on the road to make some extra money could use smart contracts and shut off the rented gear if payments don’t go through, which is much easier than tracking down someone halfway across the country and forcing them to pay up.

As more artists demand transparency and accountability, smart contracts and multi-key systems will quickly come to represent the new normal. In a few years, we’ll all look back and wonder why we put up with “dumb” contracts and even dumber passwords in the first place.

Want to add your thoughts to this discussion, or learn more about Revelator? Visit http://www.revelator.com.

DA Wallach is fully aware he’s in uncharted territory. “I’m unaware of anyone who has used the blockchain to share data around music,” he says.

But just because no one in the music business has used the technology yet doesn’t mean that it’s not a potentially viable solution to fix the industry’s data, payments, and transparency woes.

“We don’t have a single, objective database to keep track of who owns what and is owed what, partially because no one has trusted each other enough to create something like that,” says Wallach. “But the blockchain represents a neutral ground, and a possible solution.”


“There are massive problems with the way music
copyrights and payments are currently managed”.

At this point everyone is aware that there are massive problems with the way music copyrights and payments are currently managed. Lacking a central database, those seeking to license music are forced to wade through disconnected and often incomplete information.

Artists are left to receive checks every quarter for seemingly random amounts, with almost no information about why those payments are being handed down.

And plenty of artists don’t even see money owed to them, not because of bad faith or unscrupulous actions by any one party, but simply because no one predicted the digital revolution thirty years ago when entering information in a database.

“No one predicted the digital revolution thirty years
ago when entering information in a database”.


The summer of 2015 has been the summer of the blockchain for the music business. Plenty of op-eds on either side have been published, with tech savvy artists and startup founders praising the technology as the means to an open and transparent payment system and naysayers dismissing it as another fad.

The truth seems to lie somewhere in the middle — while it’s dangerous to call anything a “savior” in this business without being reminded of videodisks, digital watermarks, and other flops, it’s also silly to dismiss the blockchain’s potential to create real change.

“One of the biggest problems now is a lack of understanding
about what the blockchain actually is”.

One of the biggest problems now is a lack of understanding about what the blockchain actually is and why it could power a solution where others, most recently the Global Repertoire Database, have failed.

Blockchain technology is most often related to bitcoin, the cryptocurrency associated with various illegal online activities (and, to be fair, plenty of legal commerce). But bitcoin and blockchain are not interchangeable terms; rather, the blockchain is the database that powers bitcoin, but it is certainly not limited to that one role.

Distilled down to its simplest essence, the blockchain is a decentralized public ledger that is duplicated across a “peer to peer network” while still maintaining a coherent state (agreed upon by all participants) without requiring a central authority.

New content updated to the ledger is validated and encrypted periodically and that data is bundled into a new block, making it hard to change the content of a block without permission.

Distilled down to its simplest essence,
the blockchain is a decentralized public ledger that
is duplicated across a “peer to peer network”.


Unlike many databases that exist today, the blockchain is public, meaning that data cannot be manipulated on the back end.

It is also open to public viewing and everyone has a full copy of the data, so it can never disappear, and everyone can participate. Think of it a little likeWikipedia, which allows open participation but open monitoring as well.


Blockchain technology also presents the possibility of using smart contracts. Smart contracts (or self enforcing contracts) are programs that execute a contract, without the need of an outside party to enforce them.

Because the blockchain is decentralized and immutable, everyone can trust a smart contract that runs on it.

For example, one can describe a contract where upon buying a song on iTunes, the value is immediately distributed with certain percentages (say 30%, 30%, 40%) between 3 predescribed parties (e.g. Apple, the record label and the artist).

Streaming services and labels could sync their payment systems up with the database and send royalties automatically, and artists could trust that they were being paid what they were owed.

“Streaming services and labels could sync their payment
systems up with the database and send royalties
automatically, and artists could trust that they
were being paid what they were owed”.


One interesting ability, available already on the Bitcoin blockchain, is a multisignature (or “multisig” for short) address which splits ownership between multiple parties (like a safe deposit box that needs more than one key to be opened).

Even if a band breaks up or members have a falling out, every member would still have to give permission for any contract to be modified, ensuring that no one member could monkey around with royalty payments.


One of the biggest battles will be getting artists and rightsholders on board the blockchain train. Wallach admits that this likely won’t happen overnight, and predicts it’ll be at least ten years before adoption will be widespread.

However, once information is being uploaded widely, the blockchain will provide accurate metadata for all to see, and transferring payments and copyrights will be as quick and easy as sending an email. Payments will be transparent and efficient, and easy to use as well.

“Transferring payments and copyrights will be
as quick and easy as sending an email”.

One possibility is that blockchain technology in music will be adopted first in developing markets that lack legacy databases.

As it stands now, most of the data is siloed and hard to understand even in developed markets, and as developing markets come online, the lack of any central database will be problematic.

In some African markets, mobile payments built on top of blockchain technology are commonly used; here in the US, it’s not hard to find business that don’t even accept credit cards.


The blockchain is also not the only game in town. Apple and Google, as well as the record labels, all have their own databases and many insist on those being used.

There are documented problems with historical data as well — even if artists all started using the blockchain tomorrow, there’s still almost fifty years of historical music metadata sitting out there, much of it incomplete and incorrect.

It makes sense for labels to make sure their most popular catalog content is correct — but pity the poor artist who sold a few thousand copies in the mid-seventies and then disappeared from view.

This is where a more open system could help; while that artist’s label has no real financial incentive to help him or her, the artist in question could upload their own information and at least start seeing some micropayments.


“An open and transparent platform that can
be used by anyone, anywhere in the world,
would open up opportunities for artists
to be compensated and music to be licensed
in new and exciting ways”.

Legitimate questions aside, the blockchain offers unprecedented possibilities in transforming digital rights management in the music industry.

An open and transparent platform that can be used by anyone, anywhere in the world, would open up opportunities for artists to be compensated and music to be licensed in new and exciting ways. Ultimately, greater transparency and smart contracts represent a great new way for artists to be paid fairly.

Revelator is one of a handful of startups innovating in this space, and isannouncing today a new partnership with Colu.
You can read the press release or the whitepaper.