Most conversations about blockchain and music begin with a sweeping question: could the technology replace labels, distributors, collecting societies, or streaming services?
The more useful legal question is narrower. Could blockchain distribution change what a streaming service is required to pay?
The short answer is no, at least not directly. Statutory royalty rates are established through copyright law and administrative rate-setting. They attach to particular uses of music, regardless of whether payments travel through a bank, a distributor, a collective, or a distributed ledger.
Blockchain could, however, change how the industry documents the facts used to calculate and administer those rates. It could make ownership histories, usage records, royalty inputs, and payment trails easier to audit. If those records were sufficiently reliable and made available in a rate proceeding, they might also affect the evidence used to establish future rates.
The rate is only one part of the royalty problem. The information beneath it may be just as important.
The rate follows the use, not the technology
There is no single statutory streaming rate in the United States.
A commercially released song ordinarily contains at least two copyrighted works: the underlying musical composition and the particular sound recording. Those works can have different owners, licenses, and royalty calculations. Copyright law treats them as legally distinct.
For interactive streaming, the reproduction and distribution of the composition are generally licensed under Section 115 of the Copyright Act. The Music Modernization Act established a blanket compulsory license for eligible digital music providers, administered by the Mechanical Licensing Collective.
Under the current Phonorecords IV framework, covering 2023 through 2027, the headline mechanical rate for most interactive streaming configurations increases from 15.1% to 15.35% of applicable service revenue. That percentage is only one component of the formula. Depending on the service and offering, the calculation can also involve total content costs, subscriber minimums, performance-royalty deductions, and other regulatory inputs.
The public-performance right in the composition is licensed separately. On the sound-recording side, interactive services generally negotiate directly with labels, distributors, and other master owners. Eligible noninteractive services may instead rely on the statutory license for digital performances of sound recordings under Section 114.
Changing the distribution architecture does not change those legal classifications. If an on-chain service offers listeners on-demand access to copyrighted music, the activity remains interactive streaming. Processing the payment through a token does not alter the rights being exercised or remove the licenses the service must obtain.
What blockchain could change
Blockchain can create a durable record of a transaction. That could be valuable in a royalty system that depends upon information maintained by many different participants.
Every streaming royalty calculation rests on a chain of questions:
Today, parts of that information sit in separate systems maintained by streaming services, labels, distributors, publishers, performing-rights organizations, collective-management organizations, administrators, and rights holders.
Those systems do not always describe the same work in the same way. Titles vary. Identifiers go missing. Ownership changes without being updated everywhere. A contract may establish one payment obligation while the corresponding statement provides too little information to determine whether that obligation was followed.
I have spent a significant part of my career looking at the space between the agreement and the payment. That is where many royalty failures occur. The governing contract says one thing, an ownership database says another, and the statement does not reveal which set of information controlled the calculation.
A properly designed distributed ledger could create a shared history across that chain. It could record when an ownership interest was verified, when a transfer took effect, which usage data supported a calculation, and which instructions governed the resulting payment. That could improve matching, reconciliation, adjustment tracking, and royalty audits.
A fair rate applied to the wrong ownership data still produces the wrong payment.
Could better evidence affect future rates?
Blockchain would not permit a service to disregard a rate established by the Copyright Royalty Board. Changing the applicable statutory formula would still require action through the legal and administrative process.
Its indirect effect could be more significant.
The Copyright Royalty Board commenced Phonorecords V to determine Section 115 rates and terms for 2028 through 2032. In June 2026, several participants filed a proposed settlement limited to Subpart B configurations: physical phonorecords, permanent downloads, ringtones, and music bundles. The proposed settlement drew both supporting comments and objections.
Interactive streaming falls under Subpart C and is not covered by that settlement. Its rates therefore remain in play.
Rate proceedings depend on evidence about streaming economics, licensing practices, service costs, market benchmarks, and the respective interests of copyright owners and digital music providers. More reliable transaction records could provide additional evidence about the administrative cost of paying royalties, the causes of unmatched revenue, payment delays, correction costs, and the economic results of direct licensing arrangements.
That evidence would not enter a proceeding automatically. Participants would need to obtain it, authenticate it, and present it through testimony and expert analysis. Streaming services might also resist disclosing granular records they consider commercially sensitive.
Still, if a reliable evidence layer became widely adopted, it could improve the factual record available to participants. Better evidence would not necessarily favor creators or services in every dispute, but it could move parts of the debate away from estimates and incomplete reporting toward observable transactions.
That is the connection between blockchain and statutory rates. The technology does not establish the legal rule. It may improve the record against which future rules are argued.
Direct licensing presents a more immediate possibility
Blockchain distribution could have a more direct effect outside the compulsory rate-setting process.
Where rights holders can enter voluntary licenses, the parties may negotiate compensation suited to the product and rights involved. Those arrangements could include per-use payments, subscription revenue shares, artist-defined pricing, fan memberships, or other structures.
A blockchain-based service could record the license and automate parts of its administration. Revenue might be divided among the artist, producer, songwriter, publisher, distributor, and other participants according to verified instructions. That could shorten payment cycles and show participants how gross revenue became net compensation.
It could also create new market benchmarks. If sufficiently representative and available to the parties, those benchmarks might later inform licensing negotiations or statutory proceedings. The commercial agreement supplies the payment obligation. The technology records or administers it.
The evidence layer can be built now
The central limitation is the quality of the information entering the system.
The Copyright Office and U.S. Patent and Trademark Office addressed this issue in their 2024 study of NFTs and intellectual property. The report notes commenters’ qualification that blockchain technology cannot distinguish between “ownership” and “possession.” It also explains that ownership of an NFT does not necessarily transfer intellectual-property rights in the asset associated with it.
The same problem appears in music royalty administration. Copyright ownership, contractual terms, usage, revenue, and payment instructions all originate outside the chain. Some of that information is incomplete, disputed, or subject to change.
An ownership interest can be transferred. A catalog can change administrators. A license can expire in one territory while continuing in another. A payment may require adjustment after corrected usage data arrives.
If an incorrect ownership share is entered into a conventional database, it can generate an incorrect payment. Recording that share on a blockchain does not resolve the underlying problem.
Immutability does not cure inaccuracy. It can preserve it.
A viable royalty infrastructure therefore requires verified sources of contract and ownership data, clear authority for approving changes, privacy protections, correction mechanisms, and procedures for resolving disputes. The objective is not a record that can never change. It is a record in which material changes can be traced and evaluated.
None of this requires waiting for distributed ledgers. Verified ownership records, contract-grounded calculations, and auditable payment trails can be built today. Blockchain could eventually make that record more durable, but not more true.
That distinction is central to how we think about the problem at Cadence. Better payment rails are valuable, but they come after the agreement, the rights, the usage, and the calculation have been correctly connected.
Blockchain may not rewrite the statutory rate. Its real contribution could be helping the industry demonstrate whether that rate produced the payment it was supposed to produce.