Blockchain Technology And The Empowerment Of Content Creators

Blockchain Technology And The Empowerment Of Content Creators
Blockchain Technology And The Empowerment Of Content Creators

Mycelia by Imogen Heap has sought to introduce a potential solution to provide content creators with greater protection, both financially and in regard to the distribution of their content rights. While this solution appears to be theoretically viable, there are certain barriers that might constrain the success of this avenue.

A dilemma in the industry?

Creative content is now more readily accessible and discoverable than ever before – due to the digitalisation of movies and music, the way consumers interact with these products has become significantly more user-friendly. Streaming companies such as Netflix and Spotify provide not only a more efficient method of storage and collection of media files, but a lower-cost, subscription-based platform for users to enjoy content.

However, this benefit to the consumer is established to the detriment of content producers, with the circumstances of the music industry acting as an evident example. It is estimated that signed artists would have to achieve roughly 1,000,000 streams on Spotify or Apple Music to match the US’ minimum wage, and this problem is exacerbated for artists who are emerging or attempting to climb the ranks of the industry.

This problem has emerged due to centralised authorities such as these streaming platforms becoming more popular, and therefore more powerful. With a de facto oligopoly in the market for digital music and greater bargaining power, artists have no choice but to accept the terms of these corporations. This makes it harder for creators to sustain themselves financially, which in turn limits their ability to continue to produce new material. This cycle creates a high barrier to entry for aspiring mainstream artists due to the overwhelming disincentives.

How can blockchain provide a solution?

In an attempt to correct this issue and restore the balance of power in favour of the creative community, the Mycelia initiative was created by Imogen Heap, establishing a means by which artists can distribute and take greater control over their content.

Mycelia makes use of smart contracts on the Ethereum blockchain to allow musicians to sell and license their music, peer-to-peer. Payments (in the form of Ether, a cryptocurrency) are automatically distributed to the artist, and are then equitably divided amongst those involved in the song’s production. As a consequence, there are two key benefits on the part of both the producer and the consumer. The first mutual benefit is in respect to pricing. Due to the fact that no intermediary is required in the transaction, it is highly likely that producers will be able to charge lower prices while still earning a larger stake for themselves, leading to greater financial stability. This is because no fees have to be paid to any middlemen, such as a record label or streaming platform. Therefore, the money paid by the consumer is owned entirely by the artist at the point of transaction, at which point the creator is able to redistribute pre-
determined fractions of the sum to relevant parties involved, such as contributing
musicians or songwriters.

The second benefit is that content creators have greater ownership over their output. By minimalising bureaucracy, they are able to make independent decisions on the structure of licensing or distribution. For example, an artist may be able to develop different clauses corresponding to different prices in the smart contract depending on whether the song would be used for recreational purposes, as a soundtrack for a film, or other uses.

An assessment of this solution’s practicality

Ultimately, while Mycelia seems to provide a robust answer to the aforementioned problems of the music industry and beyond, it is uncertain as to whether or not this solution is practical in nature. A culture of dominance by mainstream music means that consumers tend to
follow the big names in the field. In order to drive adoption of blockchain technology for the transactions as proposed by Mycelia, there is a requisite of Top 40 artists and others with significant followings to promote and endorse the use of such a platform (although even this may not be enough, as evidenced by the underwhelming performance of Jay-Z’s TIDAL).

Without this, it is unlikely that the industry will make the transition to a decentralised environment, as consumers will not recognise the potential or merit to changing their habits. This is the barrier this technology will need to overcome to begin a true revolution for
content rights distribution.

KCL Blockchain is proud to be hosting Imogen Heap and Mycelia to gain a
greater insight into this subject matter in a public setting. Tickets are open to members of the public: https://www.eventbrite.co.uk/e/imogen-heap-mycelia-the-
future-of-music-tickets-57441736781

About the author:

Jeremy is a first-year law student at King’s College London and President (Legal) of KCL Blockchain. He is passionate about the interaction between the development of emerging technology and the law.

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