Music exists in a profound contradiction. It has always been stateless, invisible to the eye, existing only as an event. Yet it remains one of the most fundamental aspects of human experience. A means through which we may paint the very air that we breathe.
Today, even sound recordings are only stored potentials. Data that can re-instantiate the wave pattern, but until played, they contain no “music,” only instructions for its rebirth. No longer subject to the permanent loss of direct transmission from origin to listener, no longer relegated to the physicality of vinyl wax or compact disc.
However the prevalence of this technological innovation has created an unexpected tragedy. In 2024, 12 million artists had music on Spotify, but only 71,200 of them— (just 0.6%) generated over $10,000 on the platform1. The democratisation of music creation and distribution has paradoxically diminished the earning capacity of musicians from music sales alone.
The problem is not merely one of scale. Music has become commodified as an asset class where value accrues predominantly to platforms and intermediaries rather than creators.
The Architecture of Inequality
Spotify paid out $10 billion to the music industry in 2024, but this was distributed across rights holders, record companies, music publishers, independent distributors, performance rights organisations, and collecting societies2, with artists historically paid last in this complex chain.
Today, for every 1,000 streams, artists can expect to earn between $3-$5 USD, with one million streams generating approximately $3,000-$5,000 USD in royalties3. For independent artists working with distributors who might keep 85% of this amount, the actual take-home from a million streams (a seemingly astronomical number) amounts to $2,550-$4,250 USD. In what other industry would a product consumed a million times generate such minimal returns for its creator?
Artists have always struggled to access funding for creation, but the current system compounds this by making it nearly impossible to generate decent income from the music itself. The traditional pathways - advance payments from labels/distributors that must be recouped, touring revenues that are only viable at scale, merchandise sales requiring upfront investment - all present barriers that technology was supposed to eliminate, not reinforce.
The Black Box Problem
The structural issues extend beyond simple economics. Music revenue remuneration pathways remain antiquated, with royalties generated from a stream today potentially taking up to 18-24 months to return to an artist.
More troubling is the “black box” phenomenon. An estimated $2.5 to $15 billion in royalties go missing or unclaimed annually due to incomplete metadata, missing ISRC codes, and complex global reporting rules. These funds accumulate in interest-bearing accounts, generating dividends for administrators while the rightful creators remain unpaid.
When someone streams a song with incomplete attribution data, the royalties flow into this “black box”, where they may be redistributed through opaque formulas rather than reaching the actual songwriters whose work was performed.
The system’s complexity creates perverse incentives. Each intermediary in the music supply chain maintains its own policy, database structure, and accounting system. Money must navigate through multiple layers before reaching creators, if it reaches them at all.
For multi-territorial licensing where rights holders exist in different countries, the payment process must comply with various domestic legal formalities, including national auditing rules and withholding taxes. The result is not merely inefficiency but systemic revenue leakage.
Programmable Ownership
Against this landscape of structural dysfunction, blockchain technology presents a compelling alternative. The concept of tokenising intellectual property and creating shares that exist on a public ledger addresses several core issues simultaneously. As I discuss in my book the Musician OS Blueprint
“Tokenisation offers a vehicle for transparency, global market access, and the potential for truly democratic participation in creative upside.”
In 2021, during discussions about creative financing with my band TORA, the concept of tokenising intellectual property emerged as a potential solution. The idea was elegant in its simplicity: create shares of intellectual property that exist on a public ledger, transparent immediately and globally accessible, allowing a truly global market to participate in the upside of creative work.
Tokenisation involves transforming rights to an asset, such as a song or album, into digital tokens that exist on a blockchain, a decentralised digital ledger that converts the intangible aspects of music, like royalties and intellectual property rights, into tangible digital assets that can be easily traded, bought, or sold4. This new paradigm challenges how we understand ownership and control in the music business.
Platforms like Audius and Ujo Music already allow artists to sell music directly to fans and receive instant payments through blockchain technology, while tokenisation and NFTs enable artists to create digital assets representing ownership and royalty rights5. The technology exists. Royal.io, which secured $55 million in Series A funding, allows artists to sell fractional ownership of their music rights, enabling fans and investors to participate in the revenue generated from streaming6.
Yet as I dig deeper, core issues emerge that must be addressed to set clear precedent for how such a system could work.
The Challenges of Adoption
Trust and Regulatory Uncertainty
Perhaps the most significant barrier is the ambiguous legal status of tokenised IP/music rights. Whether these asset classes should be considered securities subject to regulatory oversight remains unresolved in most jurisdictions. The classification determines everything:
Registration requirements
Disclosure obligations,
Investor protection standards
Potential securities law violations
Without clear regulatory frameworks, platforms and artists expose themselves to legal risks that few are interested in taking. What makes this even more challenging is that regulatory landscape varies dramatically by jurisdiction.
The Financialisation Dilemma
A deeper question concerns how tokenisation might alter the fundamental relationship between fan and creator. Does converting artistic appreciation into financial speculation remove some of the purity of that exchange? Or is this simply an evolution of existing crowdfunding models like Patreon and Kickstarter, where people invest for an outcome without expecting lasting financial returns?
The critical distinction may lie in expectations. When fans support an artist on Patreon for $5 per month, they expect access and connection, not financial returns. When they purchase a token representing future royalty streams, the relationship transforms into an investment decision governed by profit expectations.
This shift could create pressure for artists to optimise for commercial success rather than artistic vision, potentially constraining creative risk-taking, or tainting the creative process altogether.
The Infrastructure Gap
Even if regulatory clarity emerges and the fan-artist relationship adapts healthily, the technological infrastructure remains underdeveloped, though I do believe we are close. For tokenised music rights to become mainstream, the process must become as straightforward as issuing shares or licensing digital rights across jurisdictions, rights types, and at scale.
Platforms must abstract these complexities without sacrificing the transparency and security that make blockchain valuable. This is the “platform and plumbing” moment the industry awaits: when tokenising music rights becomes no more complicated than streaming a song.
The Narrative Challenge
The stigma surrounding Web3 assets (particularly NFTs and meme coins) has tarnished the foundation upon which music tokenisation must build. The speculative excess, scams, and dogma associated with cryptocurrency markets have created skepticism among both creators and consumers. Overcoming this is probably a function of time, better platform experiences, regulation and few pioneers who can champion the cause and demonstrate what is possible. Perhaps a technological re-brand or name change would be of benefit too.
The Reality of Music Today
Perhaps most fundamentally, any tokenisation system must acknowledge that in many cases today, people fall in love not primarily with the music but with the person, the story, and the performance behind it. Streaming has made music abundant to the point of commodity status; what remains scarce is authentic connection with artists. Tokenisation succeeds only if it enhances rather than replaces that human connection.
Transformation Imperative
Despite these challenges, the pieces are aligning for a potential breakthrough. Investment in music tokenisation infrastructure continues to grow. This formed part of my investment thesis into Unit Network, a platform focused on abstracting blockchain complexities and enabling straightforward token issuance, which closed $18 million in strategic investment in early 2025.
The regulatory environment is also evolving. In the United States, the Commodity Futures Modernization Act eliminated the economic purpose test, allowing prediction markets and event contracts to flourish without demonstrating formal utility. Similar regulatory evolution could enable music tokenization, particularly if framed as intellectual property licensing rather than securities offerings, though this distinction remains contested.
More importantly, the financial community increasingly views music royalties as a legitimate asset class. Music royalties demonstrate low correlation to economic turbulence, generate steady cash flows, and offer favourable yield profiles compared to traditional investments. Goldman Sachs forecasts the global music market could reach $131 billion by 2030, driven primarily by continued streaming growth. This projection has attracted institutional capital to music catalogue acquisitions, with several multi-billion-dollar securitisation deals in recent years.
The technological maturity and regulatory frameworks are beginning to align. When they do, I’m confident that the global market for tokenisation will manifest with enduring positive impact. Music streaming services now boast more than 500 million paying subscribers worldwide, and a future with one billion paying listeners is within reach7. Imagine if even a fraction of these subscribers could directly invest in and benefit from the music they love.
A Resonant Future
All of this together creates an environment where the technology is ready and implementation could happen today, but we lack the catalyst (person, product or event) able to set this movement in motion and establish the precedent so desperately needed to show musicians and creatives what is possible.
Perhaps the solution lies in recalibrating expectations. The promise of tokenisation should not be generational wealth in every instance - or even most instances. Instead, it should be understood as a funding mechanism for creatives who have the capacity to build an audience, tell a story, and create art that resonates with people.
While an artist’s ability to raise capital upfront through a token sale doesn’t necessarily guarantee revenue or success post-release, it could improve the odds: it may give rise to a committed stakeholder community. A small team of investors who are genuinely invested in their success.
In this light, token holders become more than passive investors waiting for returns, they become active participants who help artists along their journey, offering opportunities, advice, support, and network. When someone owns a piece of an artist’s future success, their incentives align.
Of course, this model hinges entirely on the artist’s ability to build and maintain community relationships, and ultimately, how hungry they are for success, which is no different from how the industry operates today. The difference is that tokenization provides a new vehicle to streamline this process while potentially strengthening the incentive alignment between artists and their supporters.
Rather than relying on a single label or management company whose interests may diverge from the artist’s, tokenization enables a distributed network of supporters, each with skin in the game and motivation to contribute to the artist’s growth.
This is not just the future of music, it is the reconciliation of art and commerce, shaped by our ability to harmonise innovation with integrity, technology with humanity, and profit with purpose.