How Blockchain And Cryptocurrency Can Speed Up Spotify International Publishing Royalty Payments To US Songwriters

cryptocurrency and music

There’s been a lot of talk about applications of blockchain technology and cryptocurrency payments in the music industry. In fact, there isn’t a single major music industry conference that doesn’t dedicate some programming to related topics. There are several projects and startups currently underway to address licensing, discovery, attribution, remuneration and more with blockchain, smart contracts, and cryptocurrency.

For those of us who aren’t blockchain developers, simply keeping up with the many applications of blockchain in the music industry is the closest we’ll get actually knowing how this all (could) works.

I’ve been thinking about how blockchain and cryptocurrency could speed up the process of paying U.S. songwriters, who wait upwards of 1.5 years to get paid for the use of their songs on Spotify outside the U.S.

The current state of the flow of international publishing income to U.S. Independent Songwriters who own their publishing and use traditional publishing administrators to collect in the U.S. is quite depressing.

As an example, Tommy released a song on Spotify in January 2018. In the United Kingdom, the song earned $100 “publisher share” Spotify UK digital public performance royalties.

Here’s the breakdown:

START: $100 “publisher share” of Spotify UK digital performance royalties in January 2018.

1. PRS collects Tommy’s publishing income in the UK ($100) in January 2018.

2. PRS retains 10% admin fee and remits the balance ($90) to ASCAP in October 2018.

3. ASCAP retains 12% admin fee and remits the balance ($79.20) to the Publishing Administrator in February 2019.

4. Publishing Administrator retains 20% admin fee and pays Tommy ($63.36) in July 2019.

END: Tommy is paid $63.36 for his Spotify UK “publisher share” income (earned $100) after waiting 1.5 years and experiencing a reduction of 37% of his royalties. Imagine $1,000 reduced to $633.60 or $10,000 reduced to $6,336.00.

Had Spotify used blockchain technology to dynamically identify Tommy as the rightsholder in his song and paid him instantly at the close of the month with cryptocurrency, Tommy would have already spent his $100 on studio time!

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About Dae Bogan

Dae Bogan is a music industry professional. Connect with Dae on Twitter at @DaeBoganMusic.

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