Contrary To Predictions, Blockchain May Not Be The Future Of The Music Industry [Bobby Owsinski]
Over the past couple of years, a number of articles have surfaced in the music business world touting blockchain tech as the saviour of the music industry which will finally allow artists to get paid. This may be wishful thinking however, argues Bobby Owsinski, who offers several reasons why blockchain isn't the answer to musicians' prayers.
Guest post by Bobby Owsinski of Music 3.0
Just about every month for the past couple of years there’s been an article or post by a major publication about how blockchain technology is going to revolutionize the music business. It’s supposedly the savior of the industry because finally “artists will get paid,” record labels will be able to charge CD-level prices again, and music consumers will have something tangible to hand down to their children when they die.
Give me a break! Without getting into blockchain on a technical level here (and there are plenty of articles about why blockchain won’t work here), let me give you some thousand-foot optics on why the revolution will not arrive.
The Choice Has Been Made
First of all, the cow is out of the barn, the ship has sailed, and the genie is out of the bottle and they’re not going back in. By that I mean that music consumers have made their choice and they’re finally adopting streaming in earnest. While many still prefer to get their music for free (the key word here), an ever increasing number are getting more and more comfortable with paying a relatively low monthly fee to access a catalog of tens of millions of songs. Why would they go back to paying a much higher price for a much more limited product like an album?
What about the recent Taylor Swift release (or Adele before that), you might ask?
This is an anomaly built on unique superstar hype and popularity to get her most passionate fans to purchase a product that most will never use (many kids have never seen a CD player). Can a few other superstars pull off the same thing using a digital blockchain-based product in place of a CD? Sure, but then watch as piracy rears its ugly head faster than a CD spins.
But isn’t blockchain supposed to eliminate piracy? Digital piracy maybe, but streaming pretty much put an end to the piracy problem. Do you really want to start that one up again? Besides, just about anyone can play the songs out analog and re-record them. Blockchain protection eliminated! Now instead of artists, songwriters, publishers and labels getting paid on every stream, they’re getting the initial sale then zero afterwards. Sound familiar?
Here’s another reason why we won’t see blockchain adopted in music the way that hundreds of tech startups seem to think. Despite its reputation, the music business has always been pretty technologically hip. For more than a hundred years, whenever there’s been a new tech advancement, the business has adopted it and thrived as a result.
What me to prove it? Here we go.
Music Loves Technology
Originally back before the turn of the 20th century, the music business was built on sheet music, but as soon as the player piano came out it expanded into its first real physical product – piano rolls. When the Victrola was introduced the main product shifted to shellac records, and then to the sturdier vinyl, and the business grew faster than anyone imagined. Magnetic tape, first in 8 track form then cassette, made music portable for the first time, and consumers ate it up. CDs provided random access to songs without having to fast forward and rewind to find exactly what you wanted to listen to quickly. MP3s made your libraries more compact, available on your computer, and even more portable, plus lowered the cost of ownership. Finally, streaming provides access to millions of songs virtually anywhere for a lower cost, or even free.
You know when a new technology didn’t work for the industry? When it got greedy. Formats like Mini-disc, digital compact cassette, Super Audio CD (SACD) and DVD-Audio Disc were an effort to sell people yet another round of product they already owned. They offered no added convenience to the consumer (the audio quality was better, but that’s never been a driving factor with music delivery formats) and all failed miserably.
The Magic Word
Convenience is the magic word here. Music fans don’t consume a music format because it sounds better, they do so because it makes consuming easier. Look at the technology that’s worked for the industry – piano rolls, vinyl records, cassette tapes, CDs, MP3s, streaming music – they all make consumption more convenient! Can someone describe to me how that works with a blockchain-based format? What’s the consumer advantage here?
Once again, record labels don’t necessarily have a reputation of being technologically advanced, but believe me, they are. Big data, advanced analytics, precision social targeting – they’re on it. If blockchain would have provided a true path to industry growth or a competitive advantage, we would be transitioning to a new product by now.
But blockchain isn’t here and it’s not coming. Now let’s stop with the “blockchain is going to save the industry” talk and get back to the business of making better music (a discussion for another post).