On August 17, TikTok announced its partnership with Audius, a music streaming platform, to manage its extensive internal audio library.
Audius was not the obvious choice for a partnership with the short video giant. Digital music streaming startup founded in 2018, it is not one of the major streaming services like Apple Music or Spotify.
And, even more unusual, Audius is one of the first and only streaming platforms running on blockchain.
Remind me, what is blockchain?
Blockchain is a technology that stores data records and transfers values without centralized ownership.
Transaction data on these systems is stored as individual “blocks” that link sequentially when connected by time stamps and unique identifiers to form “chains”.
For music, this means that individual songs are assigned unique codes and clear recordings are stored each time a song is played. It can also mean more streamlined and transparent payments.
Platforms like Spotify and Apple Music use a “pro-rated” model to pay artists. Under this system, artists get a share of the platform’s overall monthly revenue generated from ads and subscription fees, calculated based on the number of times their music has been played.
The pro-rata model has been criticized by independent artists and analysts for maintaining a “superstar economy” in which top performers claim a majority share of monthly earnings.
Facilitated by its blockchain system, Audius uses a “user-centric” model, where artists receive revenue generated by individual users who directly stream their music.
That is, payments are generated for artists more directly by the people who stream their songs.
While the biggest streaming players have refused to abandon pro-rata payments, Deezer – a French music streaming service with around 16 million monthly active users – has taken the first steps towards user-centric payments. .
Now, it looks like TikTok is set to follow suit.
And how does TikTok work?
With over 800 million monthly active users, TikTok is the world’s largest short video platform and has become a significant force in the global music industry.
Once on TikTok, the songs can be used as a background for short videos – and can go viral.
Currently, putting indie music on TikTok requires the help of a publisher or companies like CD Baby or TuneCore that charge a fee or take a cut in revenue.
Audius will allow independent artists to upload music directly to TikTok. This would be a boon for musical artists given the centrality of music on TikTok and the platform’s propensity to not properly credit artists for their work.
Recent research on blockchain systems in book publishing suggests that the technology may lead to better tracking of intellectual property and increased royalty payments to independent authors. The same may be true of indie musicians on TikTok, but a history of exaggerated claims and broken promises justifies measured expectations.
Is it a fairer payment system?
So far, TikTok has given no indication that the company will use Audius blockchain technology to implement a user-centric revenue model, but the incorporation of video playback royalty payments is an expectation. reasonable.
When artists get paid from a platform like Spotify, they get paid in cash. But Audius performs blockchain transactions using its internal cryptocurrency called $ AUDIO.
Cryptocurrencies are virtual currencies stored in public ledgers rather than banks and used to perform transactions facilitated by blockchain systems.
Audius co-founder says most users aren’t familiar with or interested in the cryptocurrency that underpins the platform – but the price of AUDIO in dollars has soared in coin markets immediately after the announcement.
Since cryptocurrencies operate in a volatile market, if artists were to collect payments in $ AUDIO, it might be impossible to predict whether their earnings would amount to fair compensation.
The income of artists will not only be linked to the frequency of listening to their music, but also to market speculation.
So what does this mean for artists?
Some independent artists may be reluctant to handle payments through a decentralized digital currency subject to fewer regulations and unpredictable fluctuations in value, not to mention the environmental costs associated with mining and maintaining the cryptocurrency.
And a user-centric model is not without its flaws. For the model to be truly tested requires the full cooperation of record companies, music publishers and digital platforms.
Anything less would create fundamentally unequal conditions for artists using different services.
Even TikTok doesn’t put all of its eggs in the blockchain basket. In June 2020, TikTok established partnerships with major labels and independent consortia for music distribution, and in July 2021, TikTok announced a new partnership with Spotify to offer exclusive premium services to European artists.
But, after years of sensational claims and broken promises that blockchain will transform the future of the music industry, TikTok has taken a tangible step toward discovering what that future might look like for artists. daily.
This article by D. Bondy Valdovinos Kaye, Associate Researcher, Queensland University of Technology is republished from The Conversation under a Creative Commons license. Read the original article.