Can Bitcoin Save the Music Industry?

Ever since Napster, the Internet has taken the fall for the music industry’s woes. Now an unlikely contender from the tech world seems poised to turn the tide. On July 14, Berklee College of Music’s Rethink Music report endorsed Bitcoin’s Blockchain database technology as the most promising solution to the problem of artist payments. A chorus of industry figures  have echoed its findings, from David Byrne to D.A. Wallach of Spotify to Panos Panay, founder of SonicBids, to Brian Message, co-manager of Nick Cave & The Bad Seeds, PJ Harvey, and Radiohead.

Between 20 and 50 percent of artist royalty payments never reach their rightful owner, due to poor accounting and a lack of common reporting standards — what Rethink Music calls the “black box” problem. Previous attempts to establish a central payments registry bogged down because of high administration costs and concerns over sharing sensitive data. The Blockchain is a type of decentralized database that allows secure “trustless” transactions between multiple actors, without any central authority. The network validates transactions and enforces a common set of standards, but only the key holders to each transaction have access. The core innovation behind all forms of cryptocurrency, the Blockchain is what allows Bitcoin to process hundreds of millions of dollars in transactions daily without any central bank. Also in use for banking and real estate, Blockchain technology could reduce costs and solve the trust problem.

“Musicians tell us that a royalty check might come every six months, or not at all,” says Tess Gadwa, cofounder of Attention Based Currency. “This is a problem of missing information, and it can be fixed.” Her company plans to launch a model blockchain-based streaming service known as the Million Song Mixtape later this year, eventually licensing the platform to other streaming music services. The goal: keep licensing fees low by launching a tradable online currency generated from listeners’ interactions with music.

For a demo of Attention Based Currency in action, please contact the cofounders at info@attentionbasedcurrency.com.

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