Last week, popular short video sharing platform TikTok announced it will partner with Audius, a music streaming platform in order to manage its internal audio library.

While there are more popular music streaming platforms online, one of the main reasons for opting for Audius could be its support for blockchain which could further help content creators earn easily.

Blockchain is a technology that stores data records and transfers values with no centralized ownership. The transaction data on these systems are stored as individual “blocks” which links together when connected by timestamps and unique identifier in order to form “chains”.

For music, this means individual songs are assigned unique codes, and clear records are stored each time a song is played. It can also mean more streamlined and transparent payments.

Popular platforms like Spotify and Apple Music make use of a “Pro-rata” model for paying artists in which case an artist gets a cut of the platform’s overall monthly revenues generated via ads and subscription fees as calculated by how many times their music gets played.

There has been some criticism of the pro-rata model by independent artists and analysts because this method doesn’t favor all artists as it creates a “superstar economy” whereby only popular artists get the majority of the monthly revenue.

Facilitated by its blockchain system, Audius uses a “user-centric” model, where artists receive revenues generated by the individual users who stream their music directly.

In this model, payments are generated for artists more directly from those who stream their songs. Deezer is one of the adopters of the user-centric payment method for its artists.

Now, it seems TikTok may be poised to follow.

Background music on TikTok

The short video platform has over 800 million monthly active users making it the world’s largest video platform. With that, it has also become a really significant platform for the music industry as well.

Once on TikTok, songs can be used as background for short videos — and can go viral. For independent music publishers to make money on their songs via TikTok, they often make use of third-party services like TuneCore that charges a fee or take a cut of revenues.

With Audius, independent artists can upload music directly to TikTok and can get paid directly on the platform.

How fair will it be?

Although there isn’t an official statement from TikTok whether it will implement Audius’ blockchain technology for user-centric revenue generation however there are expectations that TikTok may incorporate a royalty-based model for its artists.

When artists are paid from a platform like Spotify, they are paid in money. But Audius conducts blockchain transactions using its in-house cryptocurrency called $AUDIO.

Cryptocurrencies are virtual currencies stored on public ledgers rather than in banks and used to make transactions facilitated by blockchain systems.

Audius’ co-founder claims most users are unaware or uninterested in the cryptocurrency underpinning the platform — but the price of $AUDIO spiked on coin markets immediately following the announcement.

Because cryptocurrencies operate on a volatile market, if artists were to collect payments in $AUDIO it might be impossible to predict whether their income would amount to fair compensation.

Artists’ income won’t only be tied to how often their music is listened to, but also to market speculation.

Impact on artists

There are obviously some flaws if this method is implemented. First, the fact that some independent artists may be wary to handle payments through a decentralized digital currency which also has issues with fluctuations and unpredictable regulations all of which could affect artists in the long run.

And for the user-centric model to fully work, it needs to be tested out as well as getting full cooperation from record labels and music publishers as well as other digital platforms.

Anything less would create fundamentally unequal conditions for artists using different services.

But, after years of sensational claims and unfulfilled promises that blockchain will transform the future of the music industry, TikTok has taken a tangible step towards uncovering what that future might actually look like for everyday artists.

This article by D. Bondy Valdovinos Kaye, Assistant researcher, Queensland University of Technology is republished from The Conversation under a Creative Commons license. Read the original article.