The history of the music industry is inevitably the story of the evolution of technology. From piano player to vinyl disc, from reel to reel to cassette tape, from CD to 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.
Really, from vinyl to CDs to digital downloads and now to digital streaming, the music industry has undergone major transformations in the past two decades. Artists are now using streaming services and social media to promote their tracks, changing the way people listen to music.
The increase in live broadcasting helped boost the global music industry’s revenue by 20 percent last year. This represents 65 percent of the industry’s revenue according to the annual IFPI Global Music report, the organization that represents the recorded music industry worldwide. Meanwhile, more than 70 percent of the revenue generated comes from the top five countries – the United States, Japan, the United Kingdom, Germany and France. These countries represent just over 8 percent of the world’s population.
It is also estimated that the penetration rate of digital service providers in emerging markets is about 3 percent, and this number is expected to rise to 18 percent by 2030, according to Goldman Sachs. This is primarily due to the paid subscription model.
Since younger, unbanked generations in emerging markets have limited or no access to online payments in most regions, they use unauthorized or illegal ways to access music. For example, last year in India, it was estimated that 68 percent of people used unlicensed services.
With the aim of distinguishing itself in the market and catering to the needs of general consumers and content creators, Pulse Music, the Dubai-based music streaming platform, has implemented a “sovereign” identity, which allows all actors within the platform to manage and control their own data. Additionally, the platform integrates smart contracts to simplify content licensing and intellectual property.
“Emerging markets are where we want to focus our efforts. We strongly believe we can provide a solution to the problems these markets face. Examples of key challenges include the lack of bank accounts for subscription model payments, the inability of music collecting societies to effectively and transparently collect the right income for musicians, and difficulties accessing otherwise available global content due to local copyright legislation and regional economic restrictions, explains Mehdi Sharif, co-founder and CEO of Pulse Music.
The idea behind Pulse
Pulse is using the power of the blockchain to disrupt how brands use music to interact with supporters. “The idea for Pulse was a long process that took a few years, with many hours of research, study and peer review to verify what we wanted to build as a product,” Sharif says.
Having spent the past decade managing and operating various streaming services, Sharif has been involved in many operational aspects – from managing Virgin MENA’s music purchases to establishing and managing his own music streaming service. He explains that the experiences he has gained have given him a great deal of insight into not only the obstacles the industry needs to overcome, but also the opportunities with which these challenges can be addressed.
Sharif notes that the growth of the music industry has been hampered by five major challenges preventing him from progressing. First of all, the complexity of intellectual property makes it difficult for any party to do business with the music industry. In addition, there is a surplus of existing supply chains and intermediaries. This increases the operation time. Third, current business models favor intermediaries in terms of revenue and equity split. This means that artists take home an average of only 12 to 15 percent of their generated revenue. Fourth, artists wait three to nine months to get paid. Finally, the inherent lack of transparency and traceability limits data access and control.”
By addressing these challenges, Sharif hopes to change the status quo in the music industry. In order to simplify content licensing, Pulse uses a proprietary digital rights management system and a proprietary copyright system based on semantic data modeling. It enables artists a “do-it-yourself” model and simplifies their IP address to allow for a fairer division of ownership. Moreover, by using the micropayment system, it allows instant payment instead of the traditional and inconvenient long waiting period. Finally, the blockchain being a fully decentralized database provides transparency and highly accurate reporting.
The company is also constantly trying to improve all aspects of the business from internal processes to its products. “Everything we do is our end users in mind. Not rushing to launch our products during systematic review and learning all the time will put us in good shape for the future,” Sharif comments.
Pulse has an ambitious plan to revolutionize the way they approach the use of blockchain technology. New modules added to the platform make all metadata associated with the content accessible to everyone at any given time. Thus, artists and copyright holders are assured of a fair share of the profits.
“Pulse is an ad-supported service that does not have any subscriptions. There are four main services that Pulse offers which are our metaverse, music streaming, social sharing, and NFT marketplace.
“Pulse is a social music platform that leverages decentralized technology such as sovereign self-identity, smart contracts, and micropayments to address the major challenges we see in the music industry today alongside those of today’s social media platforms. Our platform allows artists to manage, control, and monetize their data. Fans can Discovering and interacting with new artists via a unique user experience. It also provides brands with the ability to connect with artists, create meaningful interaction, and generate a return on investment from a unique source of income.”
Meanwhile, the social aspect of the platform is interesting. Through the use of messaging 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 love, and earn tokens in the process.
In the NFT Marketplace, Pulse users can find rare and exclusive items. It is also possible for these users to launch their own NFT, display their groups to the Pulse community, and get rewarded for it.
Pulse also helps the brand reach its target audience. “We are trying to understand not only our current community, but also our potential new audience by listening to what they have to say. We also have to understand the brands we work with, and make sure they match the audiences.” We have put more effort into understanding and analyzing the regional and local market landscape and trends market, economic shifts, and user motives.
Building on the blockchain
The UAE has embraced blockchain technology and is working to position itself as a global leader in this field. The country has launched several initiatives to promote blockchain adoption, including a blockchain strategy, a blockchain academy, and a multi-billion dollar blockchain investment fund, with Dubai becoming a major hub for companies, startups, and major players in the space. Aligning her vision with that of the UAE, Sharif stated: “I believe that blockchain has the potential to change the way we interact with the world around us.
“We are aware that there are plenty of social media platforms one can choose to use and nearly 150 digital service platforms in the market where you can stream your music. However, there is no platform available either social or music to combine them and address the challenges of today’s music industry. This is why Pulse is unique and we believe the future is bright for everyone.”
He adds: “We are focusing on emerging markets where penetration rates for digital service providers are low due to restrictions on payment and connectivity access. Young people who cannot afford subscriptions are having a hard time finding housing, food or transportation, so they are turning to social media which provides an easy platform that requires no investment of time/money from them – this has been our demographic goal so far.
“With technology increasingly evolving, another shift will come as these same users become more demanding; we aim to benefit by providing high-quality content across all platforms while maintaining enthusiasm through continuous innovation.”
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