The history of the music industry is inevitably also the story of the development of technology. From the player piano to the vinyl disc, from reel-to-reel tape to the cassette, from the CD to the digital download, these formats and devices changed not only the way music was consumed, but the very way artists created it,” said American entrepreneur, Edgar Bronfman, Jr.
Truly, from vinyl to CDs to digital downloads and now to digital streaming, the music industry has seen substantial shifts in the last two decades. Artists now use streaming services and social media to promote their tracks, changing the way people listen to music.
The surge in streaming contributed to a 20 per cent increase in global music industry revenues last year. This accounted for 65 per cent of industry revenues according to the annual IFPI Global Music report, the organisation that represents the recorded music industry worldwide. Meanwhile, over 70 per cent of the revenue generated comes from the top five countries – the US, Japan, UK, Germany and France. These countries represent a little over 8 per cent of the global population.
It has also been estimated that the penetration rate for digital service providers in emerging markets is approximately 3 per cent, and it is expected that that figure will increase to 18 per cent by 2030, according to Goldman Sachs. This is primarily due to the paid subscription model.
As unbanked younger generations in emerging markets have limited or no access to online payments in most territories, they use unauthorised or illegal ways to access music. For instance, last year in India, it was estimated that 68 per cent of people used unlicenced services.
With the aim of differentiating itself in the market and catering to the needs of its general consumers and content creators, Pulse Music, the Dubai-based music streaming platform, has implemented a “self-sovereign” identity, which allows all actors within the platform to manage and control their own data. Additionally, the platform integrates smart contracts to simplify the licensing of content and intellectual property.
“The emerging markets are where we want to focus our efforts. We strongly believe that we can offer a solution to the issues that these markets are facing. Examples of key challenges are the lack of bank fiat accounts for payments for subscription models, the inability of music collecting societies to effectively and transparently collect rightful income to musicians, difficulties in accessing otherwise available global content due to localised copyright legislation and regional economy limitations,” explains Mehdi Cherif, co-founder and CEO at Pulse Music.
The idea behind Pulse
Pulse uses the power of blockchain to disrupt how brands use music to engage with supporters. “The idea of Pulse was a long process that has taken a few years, with many hours of research, study and peer-to-peer review to validate what we wanted to build as a product,” states Cherif.
Having spent the last decade managing and operating diverse end-to-end streaming services, Cherif has been involved in various operational aspects — from managing Virgin MENA’s music buying operations to founding and managing a music streaming service of his own. He explains that the experiences he has gained has given him a great deal of insight into not only the obstacles which the industry needs to overcome, but also opportunities where those challenges can be addressed.
Music industry growth has been hindered by five main challenges that are preventing it from progressing, Cherif notes. “To begin with, the complexity of IP (intellectual property)makes it difficult for any party to deal with the music industry. Additionally, there is an excess of existing supply chains and intermediaries. These increase the time of the process. Thirdly, current business models that favour intermediaries in terms of revenue and royalty splits. This means that artists take home an average of only 12 to 15 per cent of their generated revenue. Fourthly, artists wait between three months to nine months to get paid. And finally, the inherent lack of transparency and traceability limiting the access and control of data.”
By tackling these challenges, Cherif hopes to change the status quo within the music industry. In order to simplify content licencing, Pulse uses a proprietary digital right management system and a copyright ontology based on semantic data modelling. It empowers artists with a “do it yourself” model and simplifies their IP to allow a fairer royalty split. Furthermore, by using a micropayment system, it allows for instant payment as opposed to the traditional and inconvenient elongated waiting period. And finally, the blockchain being a fully decentralised database brings transparency and highly accurate reporting.
The company is also constantly trying to enhance all aspects of the business from internal processes to its products. “Everything we do is with our end users in mind. Not rushing our product launches while systematically reviewing and learning all the time will put us in good shape for the future,” comments Cherif.
Pulse has an ambitious plan to revolutionise the way they do business with the use of blockchain technology. The new modules that have been added to the platform make all of the metadata associated with the content accessible to everyone at any given point in time. Thereby, artists and copyright owners are assured they get a fair share of the profits.
“Pulse is an ad-supported service that doesn’t have any subscriptions. There are four main services Pulse offers are our own metaverse, music streaming, social engagement and the NFT marketplace.
“Pulse is a social music platform that leverages decentralised technology such as self-sovereign identity, smart contracts and micro payments to tackle major challenges that we see within today’s music industry along with the challenges of current social media platforms. Our platform allows artists to manage, control and monetise their data. Fans can discover new artists and engage with them via a unique user experience. It also offers brands to connect with artists, create meaningful engagement and generate return on investment from a unique revenue source.”
Meanwhile, the social aspect of the platform is interesting. Through the use of messages and video chat, users will be able to communicate with their friends. It is also possible for them to upload photos and videos, share interests and hobbies, connect with brands they like, and earn tokens in the process.
At the NFT marketplace, Pulse users can find rare and exclusive items. It is also possible for these users to launch their own NFT and showcase their collections to the Pulse community and get rewarded for it in exchange.
Pulse also helps brand reach their target audience. “We try to understand not only our existing community, but also our potential new audience by listening to what they have to say. We also have to understand the brands that we work with, making sure they are matched with the audiences. “We further put a lot of effort into understanding and analysing the regional, and local market landscape, market trends, economic shifts and user motivations.”
Building on blockchain
The UAE has embraced blockchain technology and is working to position itself as a global leader in the space. The country has launched several initiatives to promote blockchain adoption, including a blockchain strategy, a blockchain academy, and a multi-billion blockchain investment fund Dubai is becoming a major hub for companies, startups and key players within the space. Having aligned its vision with that of the UAE, Cherif states: “I believe that blockchain has the potential to transform the way we interact with the world around us.
“We are aware there are plenty of social media platforms that one can choose to use and approximately over 150 digital services platforms in the market where you can stream your music. However, no platform available either social or music combines them both and addresses the challenges of today’s music industry. This is why Pulse is unique and we believe the future is bright for all.”
He adds: “We are focused on emerging markets where penetration rates for digital service providers are low due to limitations in accessing payment and connectivity. Young people who can’t afford subscriptions struggle with finding accommodation, food or transportation so they turn towards social media which provides an easy platform that doesn’t require any investment of time/money from them – this has been our target demographic up until now.
“As technology becomes increasingly sophisticated, there will come another shift as these same users become more demanding; we aim to capitalise by providing quality content across all platforms while maintaining enthusiasm through constant innovation.”
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