South Korean K-pop music label SM Entertainment is planning to build its own blockchain network and cryptocurrency. This project allows fans to be more engaged with the entertainment ecosystem by investing in artists using cryptocurrencies. This was reported by South Korean media outlet IT Chosun on Wednesday.
Director Joo Sang-sik did not provide a lot of specifics about the network. However, he did mention that the blockchain network would allow an easier payment process between labels, managers and artists.
SM Entertainment is talking with potential partners to develop the network. The K-pop music label is considering both public and private blockchains.
The music company is listed on the Korean stock exchange. The company has a market capitalization of $597 million. The company’s stock price has dropped 43 percent since November 2018. Girls’ Generation, EXO and Red Velvet are among its acts.
Not much about music and cryptocurrencies
Recently Spotify hit the news when Facebook announced its Libra stablecoin. Their CEO said the blockchain technology would allow artists to earn money in a new way. On top of that cryptocurrencies are a worldwide payment method, instead of a local one. Spotify only needs to take a look at South Korea. In that country consumers can already pay for music with crypto. This is only the case when they use a platform called Bugs.
There aren’t many connections between the music industry and blockchain technology just yet. However, it does make a lot of sense to implement blockchain technology into the music making business. Smart contracts would allow writers, singers, band members, producers, record labels and everybody in between to be paid for every time a song is being streamed on an online platform.
Don’t think there’s no blockchain future for the music industry. There are at least four companies working on decentralized music platforms:
Where available, please check out these music applications. They are more generous towards music creators. On top of this they provide a better distribution of financial earnings among the industry participants. At least Spotify doesn’t get 80 percent of the earnings.
Also published on Medium.