Smart Contracts in the Music Industry

Smart Contracts in the Music Industry
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The recent advancements in digital technologies have significantly impacted the recording industry. The non-material nature of the music industry makes it vulnerable to issues related to implementing technological innovations, which have been profound and swift. The sector demonstrated well-established hostility in the uptake of digital innovations. Block-chain is an increasingly disruptive digital development, although the recording business views this as an opportunity instead of a threat. Block-chain technology, when integrated into smart contracts, can create immense value and ensure equitable distribution of value. This paper discusses the royalty split contract and how it could benefit from automation, the rationale for the expensive nature of the verification in various industries, the economic implications of networking costs reduction, the impact of block-chain technology on the role of intermediaries in the future, and include links to articles on how to create a smart contract and a list of smart contract firms.
The royalty split agreement is a contract within the music industry that could benefit from automation. This agreement can include tokenization or, rather the conversion of an asset to a virtual token, for instance, a music piece that can be commercialized on the block-chain. Artists can create a digital version of the musician's art by tokenizing their music to ensure it is available for fans to distribute, market, and publish the track. A smart contract can be leveraged to achieve tokenization, where the track can be tailored to generate a specified number of tokens for the respective music piece and automatically distribute the royalties to the creator and other parties to the contract (Garg, 2023). Tokenization of music allows the artist to generate new revenues, including the potential for tokens value appreciations and selling of the track royalties share. Tokenizing track ownership also enables creating of a new market to facilitate the commercialization of the tokens that depict music ownership, thus allowing fans to purchase and commercialize tokens representing music ownership. This can attract investors and augment the industry's overall value. The smart contract will be tailor-made to automatically share royalties with artists and other stakeholders when the track is sold, thus ensuring the appropriate and fair treatment of the musicians and rights holders (Garg, 2023).
The royalty split agreement is relational because parties agree on different rights owned, including performance, mechanical, and needle-time. It also includes a shared understanding of the allocation of income, proceeds, and other earnings made from the commercialization of the music piece with respect to the splitting between the parties to the contract. One of the primary risks of the royalty split agreement is that it is normally employed under the assumption that the art will be sold and traded within intellectual property terms. On the licensee's side, the regular payment of royalties could have detrimental ramifications on track profitability (Kjus, 2022). The agreement has the potential to undermine the ar...