The networked record industry: How blockchain technology could transform the consumption and monetisation of recorded music

Following the emergence of file-sharing networks such as Napster and BitTorrent, the record industry has tended to regard peer-to-peer networks in a negative light. This is hardly surprising: in the terms of Yochai Benkler, such networks provided ‘technological shock’ but not ‘economic sustainability’, at least form an industry perspective. Some have seen recent technological developments as revolutionary, but it is a revolution only in potential: though music can be recorded and distributed more easily than ever, there remains a crisis in terms of attribution and monetisation that the Sisyphean ‘war on copyright’ seems unlikely to solve. Royalty payments in the streaming era, meanwhile, are slow, inefficient and enormously complex. A twentieth century, industrial information model, then, remains dominant, although the apparently inexorable overall decline in income from recorded music is gradually reducing it to a mere husk.

This paper suggests that blockchain technology, which, like Napster and BitTorrent, harnesses the power of peer-to-peer networks, could represent a more sustainable model, realising the revolutionary potential of disintermediation and direct-to-fan models to facilitate a shift to what, with a nod to Benkler’s ‘networked information economy’, might be called the networked record industry. As well as exploring the workings of distributed ledger technology, this article outlines the transformation it could bring about in determining the authorship and attribution of recorded music; enabling asset transfers and the tracking of provenance; allowing artists to determine their own pricing and terms of use for their music; facilitating licensing through metadata; introducing frictionless, near-instant micropayments for streaming and downloads. The broader themes of the networked record industry – disintermediation, transparency and the nexus of control – are also explored, as well as barriers to adoption.