Transformation of creativity and value in music through NFT and blockchain-based copyright management in the music industry

Abstract

As in many areas of talent and creativity, the field of musical talent and creativity has also entered into new debates with recent technological developments. In this study, I aimed to examine the transformative effects of blockchain technology and NFTs (Non-Fungible Tokens) on copyright management and the creation of “value” in musical creativity (within the music industry). This research comprehensively analyzes the structural inadequacies of traditional copyright systems and the transformative potential of blockchain-based solutions. The research model is based on a methodological synthesis of case studies and theoretical paradigms. The findings demonstrate that blockchain’s decentralized architecture and the unique nature of NFTs provide artists with greater autonomy over their intellectual property; smart contracts automate royalty payments, democratize financial flows, and restructure the creator-audience relationship by eliminating intermediaries. Case studies such as the electronic musician RAC and the decentralized platform Audius concretely show how this technological integration reshapes artistic production and distribution mechanisms. However, the existing legal frameworks lag behind technological innovation. There are significant challenges to be addressed, such as inconsistencies between national and international copyright laws and uncertainties regarding the legal status of NFTs. Blockchain and NFTs have the potential to transform the ontological structure of the music industry by offering creative control, transparent copyright management, direct fan engagement, and alternative income streams for artists. These technologies also carry the potential to evolve the music sector toward a more transparent, fair, and artist-centered model. Therefore, all stakeholders in the industry may need to adopt this technological transformation strategically. Nevertheless, the ecological impacts of blockchain-based copyright systems, including energy consumption and digital carbon footprint, must also be discussed from a critical sustainability perspective. In evaluating the value of musical talent and creativity, it is now essential for disciplines such as musicology, technology studies, economics, and law to work together and adopt a holistic approach to the evolving dynamics of the digital art economy. In this context, blockchain applications in the music industry are interpreted through the cultural, socioeconomic, and epistemological dimensions of the global digital economy — not merely through the lens of technological determinism but also from the perspectives of artistic autonomy and social justice..

Keywords

• Blockchain technology
• Copyright management
• Music industry
• NFT
• Smart contracts
• Value of musical creativity

References

1. Balganesh, Shyamkrishna; Wee Loon, Ng-Loy; and Sun, Haochen, "The Cambridge Handbook of Copyright Limitations and Exceptions" (2021). Faculty Books. 307. https://scholarship.law.columbia.edu/books/307
2. Boix Domenech, R., De Miguel Molina, B., & Rausell Köster, P. (2022). The impact of cultural and creative industries on the wealth of countries, regions and municipalities. European Planning Studies, 30(9), 1777-1797. https://doi.org/10.1080/09654313.2021.1909540
3. Bowker, R. R. (1912). Copyright: Its history and its law: Being a summary of the principles and practice of copyright with special reference to the American code of 1909 and the British act of 1911. Houghton Mifflin Company.
4. Ciriello, R., Torbensen, A. C. G., Hansen, M., & Müller-Bloch, C. (2023). Blockchain-Based Digital Rights Management Systems: Design Principles for the Music Industry. Electronic Markets.
5. Detweiler, C., Coleman, B., Diaz, F., Dom, L., Donahue, C., Engel, J., Huang, C.-Z. A., James, L., Manilow, E.,
6. McCroskery, A., Pedersen, K., Peter-Agbia, P., Rostamzadeh, N., Thomas, R., Zamarato, M., & Zevenbergen, B. (2022). Redefining relationships in music. arXiv preprint arXiv:2212.08038. https://arxiv.org/abs/2212.08038
7. Edelman, R. (2022). The truth about crypto: A practical, easy-to-understand guide to bitcoin, blockchain, NFTs, and other digital assets. Simon & Schuster.
8. Fai, A. (2021). Smart collectibles: Unlocking the value of non-fungible tokens (NFTs). TechRxiv. https://doi.org/10.36227/techrxiv.14762769.v1Frye, B. L. (2023, January 1). A Brief History of NFTs. RELX Group (Netherlands). https://doi.org/10.2139/ssrn.4577014

9. Falk, B. H., Tsoukalas, G., & Zhang, N. (2022). Economics of NFTs: The value of creator royalties. arXiv preprint. https://arxiv.org/abs/2212.00292
10. Geiger, C. (2021). 'Fair Use' through fundamental rights in Europe: When freedom of artistic expression allows creative appropriations and opens up statutory copyright limitations. In S. Balganesh, W. L. Ng-Loy, & H. Sun (Eds.), The Cambridge handbook of copyright limitations and exceptions (p. 174). Cambridge University Press. https://doi.org/10.2139/ssrn.3256899
11. Kadam, A. (2023). Music and AI: How artists can leverage AI to deepen fan engagement and boost their creativity. International Journal of Science and Research (IJSR), 11, 1589-1594. https://doi.org/10.21275/SR231116134503
12. Lee, E. (2023). NFTs as decentralized intellectual property. University of Illinois Law Review, 2023, 1-63. https://doi.org/10.2139/ssrn.4023736
13. Li, N. (2022). Combination of Blockchain and AI for Music Intellectual Property Protection. Computational Intelligence and Neuroscience.
14. Mell, P., & Yaga, D. (2023). Non-fungible token security (Draft NISTIR 8472). National Institute of Standards and Technology. https://csrc.nist.gov/publications/detail/nistir/8472/draft
15. Mendonca, V., Pillai, A., Abraham, E. T., Crasto, K., & Minu, A. (2024). Decentralized Music Marketplace: A Blockchain-Based Rights Management Approach. International Journal for Multidisciplinary Research.
16. Ploman, E.W., & Hamilton, L.C. (1980). Copyright: Intellectual Property in the Information Age (1st ed.). Routledge. https://doi.org/10.4324/9781003519973
17. Priest, E. (2021). The Future of Music Copyright Collectives in the Digital Streaming Age . The Columbia Journal of Law & The Arts, 45(1). https://doi.org/10.52214/jla.v45i1.8953
18. Rahim, R., Patan, R., Manikandan, R., & Kumar, S. (2020). Introduction to blockchain and big data. In R. Rahim, R. Patan, R. Manikandan, & S. Kumar (Eds.), Blockchain and big data: Trends and applications (pp. 1-23). CRC Press. https://doi.org/10.1201/9780429352546-1
19. Scharf, N. (2022). The evolution and consequences of digital rights management in relation to online music streaming. Legal Studies, 42(1), 61–80. doi:10.1017/lst.2021.26
20. Senkardes, C. G. (2021). Blockchain Technology and NFTs: A Review in Music Industry. Pressacademia.
21. Stavridou, S. (2020). Collective management of copyright in Greece after the implementation of Directive 2014/26/EU. GRUR International. https://academic.oup.com/grurint/article-abstract/69/2/128/5709510
22. Tharun, T., Vamshi, A., & Eswari, R. (2023). NFT Application for Music Industry Using Blockchain Smart Contracts. 4th International Conference on Innovative Trends in Information Technology (ICITIIT).
23. Towse, R. (2020). Dealing with digital: the economic organisation of streamed music. Media, Culture & Society, 42(7-8), 1461-1478. https://doi.org/10.1177/0163443720919376 (Original work published 2020)
24. Van Haaften-Schick, L., & Whitaker, A. (2020). From the artist's contract to the blockchain ledger: New forms of artists' funding using NFTs, fractional equity, and resale royalties. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3842210
25. Wendy J. Gordon, Copyright and Parody: Touring the Certainties of Intellectual Property and Restitution , 26 Lex Electronica 57 (2021). Available at: https://scholarship.law.bu.edu/faculty_scholarship/3387
26. Wright, A., & De Filippi, P. (2015). Decentralized blockchain technology and the rise of Lex Cryptographia. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2580664