Strobes pulsed through fog as a tightly packed audience sought to get a shot of the DJ.

Revered for his contributions to electronic dance music, Gareth Emery was in the box at London’s Ministry of Sound last weekend, there to show off the synths that have helped him win the prestigious “A State Of Trance Tune Of The Year” award three times over.

Fans were quickly sent into delirium, almost as delirious as crypto enthusiasts can sometimes seem – an interesting link since Emery, with his new startup Choon, wants to replace the antiquated digital music industry with ethereum tech.

Like many gigs that Emery has played in the past months, the night is a sell out.

“I’m one of the lucky ones,” Emery told CoinDesk backstage. “I get paid really well because I have a lot of fans that will come and see me do gigs.”

However, many musicians are less privileged as their audiences have turned to recorded music, Emery said. In that market, musicians are paid ridiculously low royalties on notoriously unreliable payment rails with long wait times.

“It’s fucking horrendous,” Emery said. “Basically we have this system that was designed in the days of sheet music and jukeboxes 60 years ago and it’s never been changed.”

According to Emery, while the music industry is anything but short on cash, it has failed to adapt to technological advancements.

But Choon looks to fix that. A streaming service that “mines” via a smart contract, Choon gives 80 percent of profits directly to musicians – a step up from similar services like Spotify – which pay out disturbingly low fees (some musicians have estimated it’s as low as $0.004891 per stream).

Emery told CoinDesk:

“We took a different path and said, ‘If you were to design the music industry today, how would you do it?'”

Musician as miner

And according to Emery, using blockchain “for what it’s really good at – money and contracts” is exactly how to create a more equitable music industry.

He’s not alone there, the music industry has been one of blockchain entrepreneurs’ favorites to disrupt. For instance, Slovenia-based Viberate is trying to eliminate the fee-taking middleman in the music industry, and several high profile people in the music industry have begun their own blockchain projects in this area as well.

But for Choon, Emery is working alongside the developers of CryptoPunks, a digital collectable precursor to CryptoKitties, with the hope of launching in the next six months.

The technology is based on a customizable “Smart Record Contract” that stores copyright credentials on the ethereum blockchain, and splits the funds gained from the track fairly between the creator and producer, in the form of an ERC-20 token called NOTES.

These NOTES will be sold in an initial coin offering (ICO) in the coming months. According to Emery, more than 500 artists are already signed up to use the platform, including several big names in the music industry like Darude, creator of the infamous trance track “Sandstorm,” and leading dubstep DJ Datsik.

The tokens are programmed to distribute according to how many times a track has been streamed, directly into an artist’s wallet. (A breakdown of the distribution can be witnessed live on Choon’s functioning testnet).

Artists can cash out NOTES on participating exchanges, but to keep the price of the token high, artists are urged to keep their money inside the Choon system, with Emery hoping the token becomes widely accepted throughout the music industry.

And it has a chance, since artists that use the platform keep full copyright ownership of their work – a change from labels that buy up full copyright as part of the deal.

In the wrong pockets

The global music industry tops something like $130 billion annually.

In spite of this, funds get lost in the machinery – taking elaborate, unnecessary detours to end up in pockets that aren’t the musicians.

“It’s just going to the wrong people – copyrighters, publishers, recording labels, streaming companies,” Emery said. “I don’t see for the most part that we have a need for record labels and publishers.”

Because of the availability and cheapness of production now, artists don’t need to be sponsored for studio rent, Emery explained, and social media allows artists to take control of their own marketing. Plus, the manufacturing and distribution of music has become easier for individuals to do themselves.

Yet, regardless, the monopolies still exist, and musicians are struggling to make ends meet.

And because it’s so difficult to make money off recorded music, more musicians are pushed into relying on live gigs.

“I make 99.5 percent of my income from touring and 0.5 percent max from streaming and recording music,” Emery said.

And that’s upsetting since some great musicians cannot or would prefer not to tour due to health conditions and family, he continued, adding that he wants to bring those people back into the lucrative music industry.

The solution, according to Emery, is to wipe out the third party and replace it with a system where artists and their audience are connected directly.

Emery told CoinDesk:

“We don’t really need them anymore, yet they have more power than they ever had before, and the only reason is they just have this iron grip on the flow of money, on the flow of payment.”

Gareth Emery concert via Facebook