How Taylor Swift and Blockchain Are Making Similar Strides to Transform the Music Industry
Questions answered by this blog:
Why did Taylor Swift re-record her album “Red?” What problem did this expose in the music industry?
What is a non-fungible token (NFT)?
How can NFTs be used to benefit artists?
How could NFTs potentially be used to solve the same issue Taylor Swift and other artists are facing in the music industry?
Anyone who doesn’t live under a rock knows about Taylor Swift’s re-recorded version of her 2012 album, Red. Contrarily, very few people are familiar with blockchain and its various use cases. So how could these two possibly be connected? No, it doesn’t have anything to do with breakups (though let’s be real, a song about your ex’s irrational obsession with Bitcoin would make for a killer breakup song).
Let’s start off with why Taylor re-recorded her songs in the first place.
Taylor first got her big break in 2006 when she signed a contract with Scott Borchetta, owner of his burgeoning Big Machine record label. She released her first single “Tim McGraw” that summer, and went on to produce six highly successful albums. Fast forward 13 years later, and that’s when the bulk of the drama begins.
As is common with many music contracts, Big Machine Record Group owned the masters (original recording) of Taylor’s songs. To own the masters of a song is to own the original recording of a song from which later copies are made. The masters gives the owner the right to license out the recording and collect royalties. According to Amuse, when artists don’t own masters to their work, they lose power over where and how that music is used.
Big Machine Record Group continued to possess the masters to Taylor’s first six albums even when she moved over to Universal Music Group’s Republic Records (who granted Taylor full ownership over all the albums she creates with them). It was announced in 2019 that Big Machine Record Group would be acquired for $300 million by Ithaca Holdings, along with the masters to Taylor’s songs. Ithaca Holdings is owned by Scooter Braun, whom Taylor does not have a good relationship with.
Via a blog post on Tumblr, Taylor expressed her sentiments toward the acquisition, claiming that Braun had consistently bullied her and that this was her “worst case scenario.” Braun would now profit from Taylor’s songs in multiple ways, from streaming services to royalties from use in TV, films, and commercials. Swift revealed that Braun was crippling her career, preventing her from being able to perform at the AMAs or even use her own songs in a Netflix documentary about her life. Her “musical legacy” would “lie in the hands of someone who tried to dismantle it.”
The Daily Campus explains it like this: “Imagine working on something extremely important to you for, give or take, 10 years and then, even though you offer to pay an exorbitant amount of money for it — it’s your life’s work, after all — this is not a possibility. To you, your work is priceless; to the people who now own it, your work is merely something with a price tag and nothing more.”
So there you have it - Taylor Swift is re-recording her past albums to take back full ownership of her music.
Taylor Swift is is not alone in her fight to own the masters of her life’s work. Prince, Kesha, and the Beatles are among other artists who have also struggled to acquire ownership. The fact that so many artists have fought for their masters, and not all have succeeded, shows how flawed the music industry is.
Enter blockchain technology in the form of NFTs, or non-fungible tokens.
Blockchain is a very complex topic to understand, so I’m going to break things down in the simplest way possible. The main idea here is that NFTs are a type of asset stored on the blockchain that allow for increased decentralization and transparency in the distribution of royalties, shifting more power from intermediaries to artists.
NFTs are digital assets that represent real-world assets, including art and music. When something is “non-fungible,” it means it is unique can’t be replaced with something else. This is the main idea behind a non-fungible token. NFTs allow buyers to be the owner of the original item, and contains built-in authentication that serves as proof of ownership. In the digital age where content can be endlessly duplicated, NFTs create a type of “digital scarcity” in the sense that there can only be one true owner at a time. In a sense, NFTs serve as “digital bragging rights” for owning the items they represent.
This technology has gained a significant amount of traction resulting from its applications as a method to buy and sell art. Rather than having a middleman, artists can sell their work directly to the consumer as an NFT, permitting them to keep more of the profits for themselves. Every time art is sold to a new owner, programmed royalties can also allow artists to receive a certain percentage of the sales (allowing artists to earn a profit even after the first sale).
How does this tie into the music industry? Record labels have historically been a method for artists to have their music popularized to a wider audience. In today’s age, streaming services can also make music more widely available. However, both require the use of intermediaries, ultimately reducing the total profits artists can earn from their work. It also creates an issue where a very small percentage of artists account for the majority of music streams, and thus earnings from royalties. NFTs allow for potential to remove these middlemen and makes it easier for more niche artists to spread their work in a profitable way.
NFTs also present the opportunity to help with conflicting claims of ownership. For example, smart contracts can be used to openly define royalty splits and payments and track all transactions. It is impossible for a central agency or organization to manipulate the information, allowing for increased transparency over the money supply chain. On top of this, NFTs can be used to help artists understand where and how their money comes in. According to Rolling Stone, in five years or so it could be possible to create a portal that updates all of an artist’s revenue streams, including but not limited to merchandise, streaming royalties, and performing royalties (which is currently not possible due to the challenges that come with the multi-ownership of music).
The Bottom Line: NFTs Are Shifting More Power Into the Hands of Artists
If Taylor Swift had sold her songs in the form of an NFT, the whole dilemma with the ownership of her music would be nonexistent. Scott Borchetta and Scooter Braun wouldn’t even be in the picture - there would be no need for the intermediaries who constantly chip away from her profits and bully her into how her music can and can’t be used. The market would also decide the value of her songs, rather than corporations like Spotify placing a price tag on them. Lastly, it would allow for increased understanding of where her revenue is coming from and who is truly benefitting the most from her work.
There are still plenty of unknowns when it comes to adopting NFTs as a way to buy and sell art, but it has excellent potential to help artists reap the most value from their work. Artists aren’t the only ones who can benefit from the decentralization of NFTs - even listeners can enjoy increased incentives, including new ways to engage with artists. Song ownership is only one piece of information the blockchain could contain. In addition, the metadata could also link to specific information about the song such as the equipment that was used to produce it, where and when the song was recorded, the artists’ inspiration for the song, and more — allowing for additional revenue streams.
This is only the beginning — it will be interesting to see where else NFTs can take the music industry in the next few years.