Celebrating World Intellectual Property Day with the theme “IP and Music,” the music industry is entering an exciting new era driven by artificial intelligence (AI) and blockchain-based smart contracts. These technologies are transforming royalty management, enhancing transparency, fairness, and creativity in unprecedented ways. 

AI has become an invaluable tool in music creation and distribution. Companies like LANDR provide AI-driven mastering services, allowing musicians, particularly independents, to produce high-quality music affordably and efficiently (LANDR, 2022). Additionally, analytics platforms like Chartmetric offer musicians detailed insights into listener preferences, enabling them to strategically plan releases to maximise engagement and revenue potential (Chartmetric, 2023). 

Smart contracts are revolutionising royalty payments by automating and streamlining the distribution process. These digital agreements, embedded within blockchain technology, automatically trigger royalty payments the moment a track is streamed or sold, eliminating traditional delays associated with multiple intermediaries. Artists like RAC have adopted blockchain platforms such as Zora, allowing fans to buy tokenised royalty rights via NFTs and directly benefit from the music’s success (Zora, 2021). 

Despite these promising benefits, smart contracts present significant challenges. Their immutability means that terms initially set cannot be easily changed. Errors in royalty percentages or metadata can thus become costly and complex (Royal, 2022). Furthermore, royalties paid in cryptocurrencies can introduce intricate legal and tax implications due to varying international regulations (KISCH IP, 2023). 

Musicians considering smart contracts should be mindful of the following key points: 

• Precision in Metadata: Accurate metadata, including songwriter credits, ownership percentages, and ISRC codes, is crucial. Errors within smart contracts can cause lasting complications in royalty payments. Initiatives like the Open Music Initiative seek to standardise metadata to mitigate these risks (Open Music Initiative, 2021). 
• Technology and Collaboration: Blockchain can be complex, so artists may benefit significantly from partnerships with technology specialists or by using musician-friendly blockchain platforms like Audius or Royal (Audius, 2022; Royal, 2022). 
• Navigating Regulations: Rapidly evolving blockchain and cryptocurrency laws necessitate proactive understanding and compliance. Engaging with legal specialists in this area is essential for artists (Business Live, 2024). 
• Financial Management: Cryptocurrency volatility demands careful financial planning. Artists might consider converting royalties promptly into stable currencies to manage financial stability effectively. 

AI-generated music further complicates IP management, prompting significant legal debates around copyright. Major music labels have recently launched landmark lawsuits against AI platforms accused of training their models on copyrighted music without authorisation (Business Live, 2024). Such cases highlight the urgent need for clearer legal frameworks around AI-produced music globally and within South Africa, where existing copyright law remains ambiguous (KISCH IP, 2023). 

Blockchain technology also emerges as a potent tool against piracy. Its transparent ledger creates an unchangeable record of music ownership and usage rights, simplifying the identification and prevention of unauthorised distribution (Investopedia, 2023). 

As we advance into this innovative landscape, artists equipped with a balanced understanding of the opportunities and risks presented by AI and smart contracts can lead the music industry towards greater fairness, transparency, and creative empowerment. 

For musicians navigating these challenges, consulting experienced legal advisors like KISCH IP is crucial to safely harnessing these emerging technologies.