It was in a taxi on my way to Midem last year that a fellow passenger introduced me to Blockchain. That was the first time I had heard of Bitcoin’s technology, and its possible application to the music industry. It offered a solution to help solve the metadata and transparency issues in the industry by building a new advanced database and ecosystem.
As interesting as it sounded, it also seemed futuristic. Since then, however, I have been surprised at how quickly the topic has surfaced in many different forms across the industry: from Berklee’s Fair Music paper to Imogen Heap’s Mycelia project. Finally, we saw it explode under the very pragmatic approach of Benji Rogers, chief strategy officer of Pledge Music. I was lucky enough to be in the audience at his presentation at FastForward this year and was inspired by his mission. It is an enormous project and requires someone with vision, passion and an inclusive solution, and Rogers seems to be the man for the job.
However, one of the biggest challenges with Blockchain is that it, by its nature, involves complex technology and concepts that are not easy to understand. With our short-attention-span society, I see people’s eyes start to glaze over the minute the topic delves into technicalities. Although I am by no means an expert, the purpose of this article is to touch upon the key points that make the project so important and why everyone in the industry should take notice. So I interviewed Benji Rogers to find out more about his proposed Blockchain solution.
What are Blockchain and Bitcoin, and how do they work?
First, the relationship between Bitcoin and Blockchain can be compared to an app built on iOS. The iOS is the technology that powers the app, but many different apps can be built on the technology. Blockchain is the technology and Bitcoin is the first, largest and most popular app.
Bitcoin is a type of currency built on block chain technology. With a normal currency, your wealth is defined by government policies, the gold standard, and your bank’s centralised database. How Bitcoin differs is the entire value of the currency and everyone who owns it has been recorded in chronological order in a decentralised database or ledger.
There are two important parts here:
1. The database is decentralised, or, more specifically, distributed. No one owns it and all users have access to it and several large players have a copy of it. This makes it safe from failure or corruption.
2. Every change is recorded. It is possible to amend the information, but it is impossible to delete the history. If approved by the owners, all changes are recorded and attributed to the person who changed it. The easiest way to understand it would be to think of a public word document with track changes on it and a certain amount of people needing to approve the changes.
“Its publicness makes it powerful” explains Rogers. “All amendments are done going forward. That is an extremely powerful concept.”
How can Blockchain be used in the music industry?
The music industry has a massive issue with transparency and copyright databases. This issue has been drastically surfaced of late by songwriters taking class actions against DSPs including Spotify, TIDAL and Rhapsody.
Spotify is addressing the issue by brokering a settlement with the NMPA, but this seems like a short-term fix to a bigger problem. With an industry that complains about how little it gets paid, we make it very difficult for users of our copyright to know exactly how to pay the correct people. Today, if you find a song you like and would like to use it for commercial purposes, it is incredibly difficult to find out who owns it, who to contact or how to license it. There are thousands of scattered databases across many entities, many not updated and with conflicting or missing information.
The GRD was a project aimed to address these challenges but its failure last year was a big setback for the industry. Now Blockchain proposes a more efficient way to achieve this.
The idea is to use Blockchain technology to build a database that has four important elements:
1. It is a distributed database, owned by the public vs. one entity, accessible by everyone and automatically updated across all copies at once
2. Every song ingested into the system would have enough data to be able to understand who owns every aspect of the copyright, how to pay them and/or who to contact to use it
3. Every song and its copyright would also have rules around who needs to approve any attempts to alter it
4. Every change to the database would be recorded and attributed to the person who changed it, and would need to be approved by the correct parties to be passed into the system
This would result in a much fairer, more inclusive and more transparent database which could be altered in one place and automatically update all associated systems and partners that need the data.
So how do we practically go about setting up this database?
Rogers has broken up the project into practical steps. Firstly, as an industry we need to decide what data is crucial around a copyright, i.e. label, performer, ISRCs, publisher, songwriters, lyrics, contact info etc. A public survey is underway for the industry to decide on this Minimum Viable Data (MVD), which will form a new standard. I urge you to get involved.
This standard will create a new file type. Instead of using a WAV or MP3 type file that can be altered, it will create a Blockchain file type; a sort of zip file that carries all of the information one needs for each song. This means that once a song is created it will be exported as .BC, and this will trigger a minimum amount of data to be inputted with the song that cannot be stripped or altered. Artists, labels and publishers will have read/write access and they will add the data required for it to be ingested in the system.
This won’t stop incorrect data being inputted in the system, but creates a solution for how to resolve it. For example:
In the present situation…
Two people write a song together and don’t agree on the publishing split, and then both go to their publisher and claim 75% ownership. Publisher A registers the song claiming 75%.
This is where it gets complicated…
Publisher B registers the song and either also claims 75% or discovers the other entry. Publisher B does not know who to contact or how to contact them. Even once they discover this information, Publisher B will have to update over 100 databases to correct the misconception.
Why Blockchain is so amazing…
The minute Publisher B tries to upload the song, a match is detected. Publisher B can then use the contact info to write to Publisher A and dispute the issue. They will come to an agreement offline. And once agreed, Publisher A will amend the data; publisher B will add to it; and the entire system will update automatically.
Rogers envisions that a Blockchain format has the potential to create a Fair Trade standard for music. Songs should be in this form to guarantee everyone is fairly being compensated for their work. It will then be up to all players in the industry (PROs, DSPs, labels, publishers etc.) to get on board and adopt this file type as the only acceptable format.
This is an enormous undertaking, and requires a top-down approach. If and when Apple Music and Spotify stipulate that Blockchain is the only acceptable format, this will force the industry to get on board.
Does the technology exist?
Rogers has partnered up with a Blockchain company to build four public APIs:
1. An uploader to enter the Blockchain file into the system
2. A scanner that scans every song to make sure that it doesn’t already exist in the system so that no duplicates can exist (think of it as a very efficient Shazam or Content ID)
3. A search tool for the database so you can find any file and all the information around it
4. A universal player to be able to listen to any track
These APIs should be ready by the end of May, and once the MVD has been finalised, it can be inputted as part of the rules of upload. Then comes the mighty task of uploading all of the songs. Rogers has already secured partners with 440K songs to pilot the project.
What is standing in the way of success?
“Nothing!” exclaims Rogers.
Now I admire a man on a mission, but this major undertaking certainly has challenges.
What about the problem of too much transparency? I have heard the system being criticised, as artists wouldn’t want sensitive information in the public sphere. Rogers explains that it is up to the artists to decide how much they want to include in their smart contracts. These contracts mean that rightsholders could set a rate for different commercial uses or licensing, and then the transactions would automatically be done by system.
However (unlike Heap’s Mycelia project), Rogers is actually not including smart contracts in his first undertaking of the Blockchain database, as he is not sure whether the technology is at a scale to facilitate the millions of transactions a day. Rogers is focusing on building the tracks for which many trains can be built upon, and he believes that when Blockchain technology gains full traction, the industry will be ready to take advantage of it. He also stresses that the aim of the project is to include the industry and not destroy it.
I also question Rogers on the debate by Bitcoin’s users who need to decide on how to adapt the system to scale. Some critics have called it the end of Bitcoin. But Rogers explains that Blockchain is still a new technology and the battle is a testament to democracy in action. He explains that change should be difficult in a democracy and is reassured that it is.
Lastly, the most controversial issue concerns costs. Who will pay for this new system? The APIs are being built by a company called Monograph – they are making it publically available, but with the aim of setting themselves as the experts in this new field. To avoid greed getting in the way, Rogers aims to set up a public benefit cooperation that hopefully will aim to keep costs as low as possible. There will however be significant costs for all players of the industry who wish to change over their CMS to this new file type and work more in sync with the ecosystem.
That sounds like a lot of work. What’s the big deal?
“If we leave 2017 and we don’t have global decentralisation of rights then the entire industry has failed”, proclaims Rogers. “The consequences are disastrous if we don’t do this quickly.” I would agree. Many big players in the industry have come out in support of this project, including PRS for Music CEO Robert Ashcroft, who has said that the biggest issue facing the industry in the Internet era is metadata. But this project requires all players in the industry (especially the major rightsholders) come together and collaborate for the greater good of the industry; and this may be biggest challenge.
There is certainly enough evidence to show that the music industry has avoided, lagged and blocked technology (much to its own destruction). This is an immense opportunity to stop stifling innovation and to make it easier for other technologies to collaborate with the music industry. Our reputation for being difficult to work with has meant we are missing out on opportunities to further monetise copyright, and this will only continue to increase.
Augmented and virtual reality (AR and VR) are coming. All the new content they will create will need a soundtrack. This is a massive opportunity for the music industry if we get it right. Importantly, AR/VR does not currently have a file type, and Rogers sees this as an opportunity to cement .BC as the format from the start. It would be a way to enforce a new fair-trade format created by the industry. For once, the music industry could be ahead or alongside new technology and we cannot afford to miss this.
It is also about time that artists and right holders understand how they are being compensated in a transparent way.
We know the status quo. It doesn’t work. Let’s strive for better.
Benji Rogers speaks on Midem 2016’s “How Blockchain can change the music industry” panel (June 5, 14.30-15.30), with artist Imogen Heap, Downton Publishing’s Joe Conyers III, Revelator’s Bruno Guez, Ethereum’s Vinay Gupta and moderator Allen Bargfrede, of Berklee College of Music. More about Midem conferences…
Claire Mas is head of digital at Communion Music, and one of Midem 2016’s Label Ambassadors. Check out all of their posts to date here.