The international music industry is a multibillion-dollar enterprise that makes a few people a lot of money and lots of people very little. The companies seem to hold all the cards, taking the larger percentage of any profit that might be made. Independent songwriters and artists always struggled to reach the point where they might be compensated well for their work. Even the advent of streaming and download sites has not changed that much for the less well-known, where even a large number of “plays” on a streaming service might generate only a few dollars.
One issue is the perhaps deliberately outdated and convoluted systems that manage music royalties. The system is outmoded and leads to delays, errors, and even financial losses for many. A new system described in the International Journal of Student Project Reporting might address some of the issues. Yichen Jiang and Stephanos Matsumoto of Olin College of Engineering, in Needham, Massachusetts, USA, and Thitipong Bisch of the University of Zurich, Switzerland, describe the Trustworthy and Auditable Royalty Processor (TARP), which uses blockchain technology.
Blockchain is a secure, decentralized ledger system that was initially developed to underpin what we call digital, or “crypto”, currencies. Recently, however, the potential for other applications beyond money have been developed using blockchain technology. The TARP innovation could use blockchain to streamline the royalty payment process, ensuring that artists are paid faster and with fewer errors. By integrating blockchain with smart contracts, TARP provides a transparent, tamper-proof record of transactions that all parties can trace and audit, the team suggests. Such transparency is important in an industry prone to errors and even exploitation. The system could also preclude issues arising from inaccurate music file metadata, complicated international copyright laws, and the existence of multiple intermediaries.
The architecture of TARP is partly centralised so that one server performs verification tasks, but the royalty transactions themselves are handled using a blockchain. This “hybrid” approach ensures that while the verification process remains efficient, the core transactions are secure and auditable. The use of blockchain could reduce discrepancies and fraud, some of the most persistent and pressing issues in royalty distribution. Moreover, the system encourages the digitisation of music metadata so that tracking and managing rights could become much simpler, allowing timely compensation for music sales and streams for artists, publishers, and other rights holders.
Jiang, Y., Matsumoto, S. and Bischof, T. (2024) ‘Towards a blockchain-based music royalty system’, Int. J. 2, No. 2, pp.174–201.
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