Tune.fm solves the inefficiencies across the music industry and streaming platforms today, whereby artists aren't paid fairly. Tune.fm enables artists to publish their music for free, while listeners pay directly using a fungible token issued on Hedera called "JAM." This payment model cuts out several costly intermediaries found in today's music streaming business models. Tune.fm turned to Hedera Hashgraph as its public distributed ledger of choice for the issuance, management, and transfer of fungible (JAM token) and non-fungible tokens (NFTs) for artists’ exclusive limited release digital assets.

Using Hedera Token Service (HTS), Tune.fm cuts the cost of token transaction fees by over 98% compared to using a smart contract on Ethereum. And transactions of native fungible tokens on Hedera take mere seconds to settle. Hedera's performance and low, predictable fees enable economically feasible micropayments in JAM while also reducing the costs associated with the issuance and transfer of non-fungible tokens that represent unique content created by artists.

Streaming platform inefficiencies add costs and increase time to remittance for artists

On platforms like Spotify or Pandora, every stream of music represents fractions of a cent, paid by the platform to various master and publishing rights holders and costly intermediaries. On average, the service providers, labels, and publishers in aggregate end up taking 90% of the revenue for any given artist. That leaves artists with around 10% of streaming revenue which can take over six months to several years to settle before hitting artists’ bank accounts. This is a huge problem in the music industry that has many artists taking back their rights and going independent if they can afford to do so.

To reduce inefficiencies in today's music streaming market, Tune.fm looked to the various public distributed ledger and blockchain technologies that exist today and offer tokenization for fungible and non-fungible assets. Tune.fm found that tokenization through smart contracts on Ethereum (or comparable blockchains) was economically infeasible, not scalable, and too slow to perform micropayments. Minting and transferring non-fungible tokens is prohibitively expensive on legacy blockchains and smart contracts.

Creating trust and value through tokenization on Hedera Hashgraph

Tokenization brings value to both the music industry and streaming platforms by reducing intermediary costs associated with the transfer of value, ensuring instant remittance, and creating new revenue streams for artists.

By utilizing the Hedera Token Service (HTS), Tune.fm overcomes smart contract tokenization limitations through the efficiency of Hedera's underlying hashgraph consensus algorithm. HTS reduces the total cost of issuance and management for their JAM fungible token used to pay artists per stream, and improves settlement time from months to seconds. HTS also enables artists to create new revenue streams through the issuance of non-fungible tokens, representing creative works such as album art, limited releases, virtual live stream ticketing, merchandise, experiences and more.

Hedera goes beyond alternative public distributed ledgers by ensuring overall stability with its no-fork guarantee, all on a public network governed by leading global organizations.