How to Build a Blockchain Music Industry App?

blockchain for the music industry

Interested in learning how to build a blockchain music industry app?

This is an excellent market with many opportunities to be explored.

A recent Statista report predicts how the global music industry will grow over the next few years. The report estimates that the total revenue of the global music industry will grow to $65 billion by 2023. That’s a significant increase from the $51 billion it generated back in 2017.

Innovating in this industry is a great way to make money as well as to improve people’s lives. Here are a few amazing case studies of companies that hired DevTeam.Space to build their software products:

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Contents

The problems in the music industry
Let’s talk opportunities now!
Can the music industry transform itself using the blockchain technology?
Existing music blockchain platforms
Features desired in a blockchain platform for the music industry
How to build a blockchain platform for the music industry

The problems in the music industry

While the above statistics indicate a healthy growth rate, there are times when such statistics can mask underlying structural problems within an industry. This is true for the music industry.

The music industry has seen many disruptions over the years. Major labels like Universal Music Group, Warner Music Group, and Sony BMG once dominated the whole scene. They managed the music rights and reaped much of the profits. These and other record labels also coordinated with the distributors and managed many other aspects too.

Napster, a peer-to-peer (P2P) file-sharing service for digital music, totally upended this model by disrupting the traditional music business model. Legal battles followed, and in a win for the old giants, Napster was forced to discontinue.

Further music streaming platforms brought in more disruptions. Spotify, Apple Music, Google Play Music & YouTube, Amazon, Deezer, SoundCloud, and Tidal led this round of disruptions, and managed to succeed where Napster had failed.

Most of these disruptions didn’t do much to improve the payouts that artists received. Artists continue to earn less than they should, particularly the less well-established ones. This problem continues to plague the industry to this day.

Check out these examples:

A. Report about the main challenges in the music industry

The top 1% of artists earn 77% of the total income received by artists. This means that an artist outside this top bracket won’t earn anything in the way of a significant income.

In fact, with only a few exceptions, most of the top 1% of artists still only get rewarded with a minuscule amount of the revenue as the record labels keep most of it! While the above-mentioned numbers are from 2017, this general trend continues even to this day.

Most top artists earn around 18% of the total revenue generated by their music. The remainder only earn a maximum of 6%, something that seems grossly unfair! Read more about this and other statistics in “10 jaw-dropping music industry stats”.

When you review the numbers of the global music industry by countries, these figures aren’t any better. The entire industry managed to gross $43 billion back in 2017, representing a healthy growth rate over previous years. However, artists only earned a meagre 12%, on average, of that revenue! Even worse, artists often don’t know how their royalty payments are calculated since the industry isn’t transparent.

The simple fact is that the industry has too many middlemen – record labels, radio companies, and streaming services gobble up a significant part of the total revenue.

Artists that sell only 1 album per year make up 15% of all the artists who work in the industry. A staggering 82% of artists are not even signed up with any record labels, moreover, 33% of artists don’t sell any albums at all!

B. Media reports from 2020 highlighting the issues in the music industry

Reports from 2020 indicate that the music industry continues to face challenges. This “The Conversation.com” report states that even famous musicians continue not to earn sufficient returns on their work.

Why does this happen? “The Conversation.com” report states the following:

  • Streaming services like Apple Music and Spotify earn revenues from subscription fees and advertising.
  • Music streaming platforms enter into contracts with record labels to access content.
  • The streaming platforms retain 30% of the revenue from streaming.
  • Music publishers get 15% of the revenue. They represent songwriters.
  • Record labels get 55% of the revenue. They pay a percentage of this amount to the artists, however, they still take the lion’s share. You can see how artists get a significantly reduced amount.
  • However, multiple complexities exist on streaming platforms concerning how artists are rewarded for users listening to their work. This further reduces the amounts earned by artists.

It’s clear that the industry needs to change. In short, it needs to increase the pool of talent and start giving them fairer pay.

Let’s talk opportunities!

A defining characteristic of the free-market economy is that opportunities can be found in finding solutions to problems! So how does this apply to the music industry?

The present system requires artists to depend on middlemen like record labels, radio companies, and streaming services. Their success depends on how these middlemen market the artists’ work.

But what if artists could directly interact with listeners? The result would be that consumers would now get direct access to a new crop of talent and allow artists to discover whole new markets.

Direct interaction between artists and consumers would also eliminate middlemen from the revenue stream. This would improve the income of the artists, and reduce the cost for listeners to access music. A technology that puts a premium on transparency while also facilitating the ability of artists to have more control over the money they make would revolutionize the industry. Read more about this in “Blockchain could help musicians make money again“.

The transparency and efficiency offered by blockchain allow for fair incentives to be given to all stakeholders. This can bring much-needed advancements and fairer treatment for all parties.

Can the music industry transform itself using blockchain technology?

Blockchain technology is now firmly out of the shadows thanks to the cryptocurrency boom of Bitcoin, Ethereum, and the 1,000+ other digital currencies. More and more industries, governments, and non-governmental organizations are exploring how to use blockchain solutions to enhance efficiency as well as to increase transparency.

It offers the following:

1. Decentralization

Blockchain solutions work on a decentralized network with no one central server. This ensures every participant has equal authority on the network. Furthermore, hackers can’t alter data records by taking over the central server as this would require them to take control of 51%+ of the network’s nodes.

2. Data security

Modern cryptography protects the data, e.g., digital signatures are encrypted. This means that hackers can’t even gain access to data either.

Hackers find it practically impossible to tamper with the blockchain network because of the consensus algorithm. E.g., the ‘Proof of Work’ (POW) consensus algorithm would require a hacker to possess enormous computing power to overpower the decentralized network, something which, without the yet invented quantum computer, isn’t possible. Read “Proof of Work vs Proof of Stake comparison” to learn more.

3. A reduced role for the “middlemen”

Decentralization eliminates the need for middlemen, therefore, a blockchain music distribution platform would be able to connect artists directly with listeners. Since modern cryptography and consensus algorithms protect data, this assures that even the most basic blockchain solution will be protected against fraud.

4. Transparency

The distributed ledger of blockchain makes it easier to share data with a wide range of stakeholders. Stakeholders can access data on a real-time basis. This fosters transparency. This further reduces the role of the intermediaries. 

5. Efficiency

Blockchain networks like Ethereum have introduced smart contracts, i.e., autonomous, tamper-proof solutions (once written to the network) that transfer assets automatically upon fulfillment of a set of predetermined conditions. This would allow for the automation of payments for artists and other processes.

Read more about these possibilities in “What could blockchain do for music?“.

Existing music blockchain platforms

It’s time we review a few platforms that use blockchain in the music industry. This will provide those of you who are considering building a music industry blockchain solution with useful ideas.

Mycelia

Imogen Heap, the Grammy-award-winning artist launched Mycelia. This blockchain project intends to create a fair and sustainable music industry. Mycelia aims to ensure that all stakeholders receive fair compensation and acknowledgment.

VOISE

VOISE is another blockchain platform for the music industry. It is built on the Ethereum blockchain network. Artists can monetize their work on this P2P network, including setting their own prices. They can provide free samples of their tracks and seek feedback from music enthusiasts.

Artists can upload their content meaning that users on the P2P network can view/listen to the music. The platform enables artists to receive nearly all the revenue that they generate, using the VOISE crypto token.

Open Music Initiative (OMI)

Open Music Initiative (OMI) is a non-profit initiative. It leverages the power of blockchain for the uniform identification of music rights holders and creators.

The project intends to create a new music metadata layer. This layer should foster transparency, and it should be an authoritative source of information. It has created an open-source protocol for this.

Musicoin

Musicoin is a Hong Kong-based music streaming platform. The company uses a blockchain platform to support the creation, consumption, and distribution of music.

NFTs: another opportunity presented by blockchain for artists

NFTs (non-fungible tokens) are cryptographic tokens that are unique and indivisible. In this regard, they vary from other cryptographic tokens.

You can always trade one Bitcoin for another Bitcoin since they are equivalent. One can transact with smaller units of Bitcoin.

However, you can’t trade one NFT for another. You can’t transact with smaller units of an NFT. Such smaller units don’t exist. These attributes make NFTs ideal for tokenizing artworks and digital collectibles.

NFTs are stored on a blockchain network like Ethereum. No one can tamper with them. This helps artists to prove that they have created their artworks. In turn, this helps them to get fair compensation for their work.

Artists in the world of music have entered the world of NFTs. Both mainstream and indie artists have taken to NFTs with enthusiasm.

Features desired in a blockchain platform for the music industry

When you create a blockchain for the music industry, you need to offer the following key features in the app:

  • Artists should be able to upload their content in a secure manner.
  • Listeners/viewers should be able to view contents on the platform before they select a song.
  • The platform should offer cryptocurrency-based payments to artists.
  • Music fans should have full access to their favorite artists.
  • Upon the download of a song, smart contracts should automatically process payments.
  • The platform should use blockchain to keep transactions and accounting transparent.
  • The platform should let the artists keep most of the revenue they generate.
  • Listeners/viewers shouldn’t have to contend with ads. The platform should consider other monetization options. For e.g., artists can set up an agreement with their fans to share revenue if fans share music, helping it to reach a wider audience.
  • A simple user interface (UI) is important.

Read “Blockchain music platforms: a new paradigm” for more details on the desired features.

How to build a blockchain platform for the music industry

I will outline the Ethereum ‘Distributed App’ (DApp) approach to developing a blockchain platform for the music industry. A DApp is like a web app, except that it runs on a decentralized blockchain network. While the front-end of the app can be coded in any popular language, the backend must incorporate smart contracts. This requires a special skill set.

A DApp should also be open-source and store data in a decentralized blockchain that adheres to the required cryptographic standards. DApps must use a crypto token, however, no one entity should control the majority of tokens. All enhancements to a DApp must be based on the consensus of the user community.

Read more about DApps in “What Are Dapps? The New Decentralized Future” and find out what the future of Dapps will bring.

The development approach consists of the following steps:

  1. Build a capable team.
  2. Design and build a UI.
  3. Use a blockchain network like Ethereum.
  4. Code smart contracts and crypto tokens.
  5. Test and deploy smart contracts and the DApp.

A team to develop a blockchain music distribution platform

Firstly, you need to build a team consisting of business analysts, UX/UI designers, web developers, Ethereum blockchain developers, and testers. You also need a PM with knowledge of project management best practices. Our guide “Project management: 10 best practices” can help if you have no background in this.

While UX/UI designers, web developers, and testers are relatively easy to find, blockchain developers skills are a niche skillset. Finding quality blockchain developers can be tough. Allow yourself plenty of time to do this. Also, you might find yourself even needing to train them on specific elements of blockchain development yourself. Smart contracts in particularity are very challenging.

Start with the Ethereum development tutorial. The Loom Network offers CryptoZombies. This interactive DApp development training is another key resource for developers.

Ethereum DApps will require smart contracts. Smart contracts on the Ethereum network are coded in the Ethereum proprietary language, Solidity. Your team needs this skill set. This Blockgeeks Solidity course is useful if you are looking for a place to start.

Business requirements analysis, UI design, and front-end development will be the same as when developing any other web app. Assuming you have the experience to develop these, I will now describe how you can set up the Ethereum development environment and connect your app to the Ethereum blockchain.

Create an Ethereum account:

To implement your DApp on the Ethereum blockchain and run it, you need Ether (ETH). For this, you need an Ethereum account and a wallet address. There are two types of Ethereum accounts, i.e., ‘Externally Owned Accounts’ (EOAs) and ‘Contract Accounts’. You need an EOA.

You can easily do this using the ‘eth-lightwallet’. It’s an easy-to-use wallet. It requires you to create your private and public keys. Secure your private key. Check the eth-lightwallet documentation for instructions. You will need to buy Ether to deploy your smart contracts as the Ethereum network requires gas payments (processing charges) to be paid in Ethereum.

Install the required DApp development tools:

This project requires you to install a few important tools, as follows:

“TESTRPC”Ganache

“testrpc” “Ganache” is an easy-to-use Ethereum blockchain client, with a ‘Command-Line Interface’ (CLI). Install, set a block-mining interval, and take the other configuration actions, by following their GitHub instructions.

“WEB3.JS”

You will use “web3.js” to communicate with the Ethereum blockchain. Install it and configure the ‘aconfig.js’ file. They offer web APIs. Configure these too, for ease of use. Check out their installation and configuration instructions here.

“TRUFFLE”

This is a well-known tool for testing and deploying Ethereum smart contracts. The tool has different folders for your different projects, furthermore, it makes testing and deployment easy. Find their installation and configuration instructions here.

After installing these tools, open “Ganache”, and update your “config.js” file with your eth-lightwallet private and public key. This guide “Getting started as an Ethereum web developer” has the necessary instructions.

Create a crypto token for your blockchain music platform

You need a crypto token for the artists and consumers to transact. A crypto token is also a mandatory requirement of a DApp. Read “How to issue your own token on Ethereum in less than 20 minutes” to find how you can create an ERC 20 token.

You will want to be on the right side of the regulations when you market your project. In the US, the ‘Securities and Exchange Commission’ (SEC) requires that blockchain start-ups selling tokens as investment instruments register them as securities. Please consult our guide “Utility tokens vs. security tokens comparison guide“. Keep in mind that other countries may have their own regulations.

Code smart contracts

You now need to code smart contracts for your blockchain music platform. Smart contracts are open-source pieces of code with “If-Then-Else” statements. They execute automatically based on triggers and can be programmed to transfer crypto assets based on fulfillment of predetermined conditions.

Smart contracts are stored in the blockchain database, therefore, one added, they can’t be tampered with. Their execution results are also stored on the blockchain. Their execution is irreversible. Read more about smart contracts in “What is a smart contract?“.

Keep the logic of your smart contracts simple. This helps you to test them since simpler code is easier to debug.

You also pay less “gas price” if your smart contracts are simple. The gas price is the Ether you pay to execute any smart contracts on Ethereum. The higher the complexity of smart contracts, the more gas price you need to pay.

To get ideas from other music platforms, you can review their smart contracts, as follows:

Get the smart contracts audited by experienced reviewers

You can’t modify smart contracts after you deploy them, moreover, you can’t override their execution results. This makes it very important to test them thoroughly.

The testing process can’t detect all defects though. Furthermore, you want to identify defects as early as possible. We recommend you have a thorough review of your smart contracts even before you test them.

How to review smart contracts?

A review of smart contracts involves the following:

  • Locking down the latest version of the source code;
  • Understanding the project and studying project documentation;
  • Conducting a preliminary code review;
  • Performing a static code analysis;
  • Carrying out a code quality analysis;
  • Looking for known vulnerabilities;
  • Analyzing the functionality;
  • Reporting the issues and tracking them to closure.

Which known vulnerabilities should you look for in smart contracts?

As we have explained in our guide to blockchain code audits, you should look for the following vulnerabilities:

  • Reentrancy;
  • Storage pointers that are vulnerable to exploitations;
  • Under-flows and overflows;
  • Shadowing of variables;
  • Access control issues;
  • The lack of checking of the return values for low-level calls;
  • DoS (Denial of Service);
  • Generating random numbers incorrectly;
  • Front-running;
  • Manipulation of timestamp;
  • Validating cryptographic signatures incorrectly.

Test smart contracts

Use MetaMask, a browser extension, and a crypto wallet. You need to test your smart contracts on Ropsten, a test network for Ethereum.

You don’t need real Ether on Ropsten. Dummy Ethers are enough for testing smart contracts, and you can get them on the MetaMask Ether Faucet.

Deploy smart contracts

You now need to use the Ether you have purchased to pay for the ‘gas price’ for deploying your smart contracts. To deploy your smart contracts onto the Ethereum mainnet, i.e., the main network, you need to use Ganache, Web3.js, and Truffle. Read “How to deploy smart contract on Ethereum” to know how you can test and deploy your smart contract.

Building a scalable DApp:

You will need your DApp to scale as your transaction volume increases. While it’s known that public blockchain networks like Ethereum have scalability issues, a few remedies are available. One such remedy is to use side chains for DApps.

Loom Network offers ‘Software Development Kits’ (SDKs) to build DApps on ‘DAppChains’, i.e., side chains for individual DApps. Read more about scaling your DApp in “How to scale an Ethereum DApp“.

In conclusion, while it is not as straightforward as building a web or app solution, you can build a blockchain music platform to help transform the industry provided that you have the right expertise in your team.

It’s a complex development project that you will need to manage from end to end unless you outsource the project.

If you do feel that it is too complicated for your existing team and that you need to suppliment your team with additional developers or dev teams, then why not take a moment to let DevTeam.Space know about your project requirements via this link and one of our dedicated account managers will get in touch to show you how we can help.

Frequently Asked Questions

Is blockchain safe?

Blockchain is safer than many existing database solutions at the current time. The immutability of records thanks to any changes requiring 51% of the network to approve such changes means that blockchain data is also more trustworthy.

What are the applications of Blockchain?

Decentralized medical records, cryptocurrencies, automated supply chains, automation of property and real estate transfers, to name but a few.

How can Blockchain change the music industry?

It will allow artists to protect their music from theft by acting as a decentralized database on which they can record their ownership. This will save artists millions of dollars a year in lost revenue.

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