The first part of our exploration into the “New Music Economy” focused on Bitcoin’s potential to redefine how artists and fans exchange value. In this follow-up, we dive into the current state of the music industry—an ecosystem riddled with legal battles, power struggles, and technological disruptions.
From lawsuits involving AI-generated music to accusations of collusion between major labels and streaming platforms, these challenges highlight the flaws of the traditional system. A Bitcoin-powered New Music Economy doesn’t just offer an alternative—it may eventually be the solution the industry desperately needs.
The Legal Challenges Shaking the Music Industry
The music industry is no stranger to legal disputes, but recent cases reveal deeper systemic issues, highlighting the need for a foundational rethink of its economic and operational models. Let’s break down some of the most significant battles:
- Drake vs. Universal Music Group and Spotify
In late 2024, Drake filed lawsuits against Universal Music Group (UMG) and Spotify, alleging they artificially inflated the streams of Kendrick Lamar’s diss track Not Like Us. He accused UMG of using bots and engaging in pay-to-play schemes, distorting the competitive landscape and causing him financial harm. - Record Labels vs. AI Music Companies
Major labels such as Sony Music, UMG, and Warner Records have launched lawsuits against AI startups like Suno and Udio. These companies allegedly trained their AI models using copyrighted songs without permission, generating content that is directly competing with human artists. - Artists’ Lawsuit Over Streaming Revenue Transparency
In an ongoing class-action lawsuit, artists are demanding greater transparency from streaming platforms like Spotify, accusing them of underreporting streams and withholding royalties. - The Copyright Battle Over AI-Generated Drake and The Weeknd Song
Earlier in 2024, an AI-generated song mimicking Drake and The Weeknd went viral. Universal Music Group sought to have it removed from platforms, citing copyright infringement, but the case has sparked debate about whether AI-generated works fall under current copyright laws. - Streaming Payout Inequities for Independent Artists
Independent musicians continue to push back against low streaming payouts. Platforms like Spotify pay fractions of a penny per stream, leading to widespread frustration and calls for systemic reform.
Copyright Challenges in Blockchain-Based Platforms
While blockchain offers revolutionary benefits for transparency and fair royalties, it also introduces copyright challenges. A prominent example is Audius, a decentralised music streaming platform aiming to empower artists by removing intermediaries. Despite its innovative approach, Audius has faced significant copyright infringement issues.
Key Copyright Challenges:
- Irremovability of Content:
Once data is recorded on a blockchain, it becomes difficult to alter or remove, which complicates the elimination of infringing material. - Decentralised Control:
With no central authority, enforcing copyright compliance is challenging, as responsibilities are distributed across the network.
Addressing Copyright in Blockchain Music:
- Advanced Content Identification Systems:
Integrating tools that detect and block unauthorised uploads can prevent copyright violations proactively. - Collaborative Efforts with Rights Holders:
Engaging directly with artists and labels fosters trust and reduces disputes. - Robust Copyright Policies:
Clear rules and enforcement mechanisms ensure compliance while promoting innovation.
Distribution Challenges and Niche Crowds
One of the most pressing concerns for Bitcoin-powered music platforms is their niche audience. Compared to major platforms like Spotify or Apple Music, Bitcoin-based platforms often attract smaller, more targeted communities. This can create challenges in distribution and reach, as artists may find it difficult to achieve visibility or access millions of listeners.
Why the Niche Approach Works
- Dedicated Fans: Smaller, focused communities often have higher engagement rates. Fans on Bitcoin-powered platforms actively choose to support artists rather than passively streaming.
- Revenue Transparency: With Bitcoin, artists retain control over their earnings, avoiding the opaque systems of major platforms.
- Early Adoption Opportunities: As Bitcoin-powered platforms grow, early adopters gain a competitive edge, establishing themselves within a loyal community.
How Bitcoin Addresses Industry Issues
A Bitcoin-powered New Music Economy offers solutions to these systemic problems:
- Transparent and Automated Royalties
With Bitcoin smart contracts, royalty payments can be automated, transparent, and instant. - Immutable Ownership Records
Blockchain can securely record ownership and licensing information, reducing disputes over intellectual property and providing clear attribution, even for AI-generated content. - Global Accessibility and Fair Compensation
Bitcoin’s decentralised nature enables artists worldwide to receive payments directly from fans, bypassing traditional financial barriers. - Decentralized Platforms
Building music distribution platforms on the blockchain can eliminate centralised control, reducing the risk of manipulation and ensuring artists maintain ownership of their content and revenue streams. - Equitable AI Content Compensation
When AI tools use songs for training, those works can be identified through their blockchain registrations. Bitcoin smart contracts could automatically pay royalties to original creators whenever their work contributes to an AI-generated song.
To demonstrate just a fraction of the possibilities, platforms like Audionals.com, founded by Jim Crane, are actively developing ways to use Bitcoin’s blockchain to decentralise music creation, rights management, and distribution. By exploring how detailed metadata and audio data can be inscribed onto Bitcoin, Audionals is working toward solutions that allow for precise and transparent ownership and royalty tracking. While still in progress, it highlights how blockchain technology could enable a more efficient and artist-focused music economy.
For further insights on how Audionals works, check out this interview with Jim Crane.
A Real Economy, Not Just an Ecosystem
The current wave of lawsuits, technological disruption, and artist frustration shows that the music industry is ripe for change. Bitcoin offers more than just a payment system—it provides a decentralised, censorship-resistant infrastructure capable of fostering true ownership, transparency, and equitable participation in the music economy.
By addressing both the promises and challenges of blockchain, platforms like Audius highlight the complexities of this shift. From royalty transparency to AI copyright disputes, Bitcoin isn’t just a tool; it’s a blueprint for the real New Music Economy. The question now is whether the industry is ready to embrace it—or whether independent artists and fans will lead the way.
