Could Blockchain Technology Bankrupt Spotify? A Music Revolution

Blockchain will transform the music industry in the next 10 years. You can bet on it.

YouTube & Spotify better be paying close attention or else. POOF!

The blockchain is allowing musicians to monetize their work and engage with their fans more directly, according to a recent report by Edith Suarez. By embedding music in the blockchain, those involved in its creation can get paid instantly. (Like I mean NOW, this second paid)  in cryptocurrency of their choice.

The Big Problem

For every song that is born, there are writers, managers, musicians companies publishing, companies record to rights claim of the song. And this complicated web of ownership has created one of the worst systems, and procedures for people in the music to get paid their fair share.

Bottom Line: Copyrights music is complex and painful.

  • Who wrote the song?
  • Who has the license?
  • Who is the owner?
  • And many more issues…


Will Blockchain Technology Bankrupt Spotify? A Music Revolution

A new report, which is being widely circulated in the music industry, suggests that embracing cryptocurrency technology and using a custom Blockchain platform could bring more transparency to the debate about musicians’ income from streaming services like Spotify.

A blockchain is a public record of all transactions that have ever taken place in a currency, the most well known example is its use in Bitcoin and Ethereum. 

Music is placed in the decentralized server, then each song is embedded with a piece of code, meaning that in time, anyone who downloads a track with a cryptocurrency, a payment is automatically sent to anyone involved, be it the writer, the producer, the singer, as well as many others,” Suarez stated.

The report suggests the music industry to create an accurate database of music rights ownership – who should be paid for sales and streams of any given song – then builds a cryptocurrency system around it to automate royalty payments.

“In addition to rights ownership information, the royalty split for each work, as determined by a mixture of statute and contracts, could be added to the database.

Each time a payment is generated for a given work, the money would be automatically split according to the set terms, and each party’s account would instantly reflect the additional revenue.”  suggested the report.


Blockchain technology allows for instant, private, and totally transparent transmission of artist royalties, including realtime distributions to co-writers, producers, technology partners, publishers, and even labels


The report uses the example of a song bought from Apple’s iTunes store, with $1 left for its rightsholders after Apple has taken its cut of the sale.

“This money would be split between the two different works contained in the song, with a 9.1 cent mechanical royalty going to the musical work, and the remaining 90.9 cents going to the sound recording.

Next, if the contract between the publisher and songwriter specifies a 75/25 split of revenue from downloads, the publisher would receive 6.825 cents and the songwriter would receive 2.275 cents.”

With an identical split at the record label, The label would receive 68.175 cents, and the recording artist would get 22.725 cents. The blockchain network could also further divide this 22.725 cents between the members of a band, if applicable.”

This entire process would take place in less than one second, allowing all parties to access their money immediately after it is generated.

Will Blockchain Technology Bankrupt Spotify? A Music Revolution

According to Rethink Music, such a system would also ensure that music labels and publishers do not hold on to royalties before passing them to musicians and songwriters, which would “eliminate concerns about accidental or intentional underpayment of royalties”.

The database is decentralized.

No one owns it and all users have access to it and several large players have a copy of it.

This makes it safe from failure or corruption.

Blockchain application and music


Will Blockchain Technology Bankrupt Spotify- A Music Revolution

A band struggling to make their rent, who go into the studio one weekend and “bang out an album then post it to social media” – come Monday, there’s $350 in their account to pay the rent. Conyers picked up on this: “As an industry we’ve really done a disservice to the middle-class musician by not getting them paid faster,” – Gupta



More Control Over Ownership

Musicians hope to have more ownership of their music, assuring them they are being paid fairly and quickly for sales of their work, as well as simplifying the relationship between musicians and fans, Suarez said.


“Retuning the way a global industry works may be the greatest barrier to implementing the technology,” – Suarez


“Blockchain opens a really interesting window into where the industry might go to in the next 20 to 30 years in the sense that the freedom to operate, in any way you want to online, both as a consumer, or as a creator, shouldn’t be impeded ,” said Paul Pacifico, CEO of The Featured Artists Coalition. “I think the pressure to change, the pressure to improve and the pressure to really create a modern industry that’s fit for global distribution marketplace in the 21st century means that the larger corporations will have to move too.”


Examples to look at

Imogen Heap

As the only female artist to have won a Grammy award for engineering, the “Hide and Seek” singer has always been a leader in tech innovation in the music industry.


Heap has embraced Ethereum (co-founded by Decentral’s CEO Anthony Di Iorio), a decentralized blockchain platform that can execute peer-to-peer “smart” contracts. By working with coders to develop a publishing method that is transparent, Ethereum can automatically distribute payment for sales of all copyrighted content, essentially eliminating the need for a middle-person or centralized authority. Her Dapp (decentralized app), Mycelia by Heap, will allow individual components of songs (such as a beat or a hook) to be licensed and monetized, with the owner of the content losing less (or none) of their revenue to corporate rentiers.



The reality is, blockchain technology is here to stay and it’s going to ruffle up many industry’s. The ball is now in the courts of the big giants. Do they adopt blockchain or ignore it? Only time will tell.

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