Of all the places you might attend an event on “Fair-Trade Music, Virtual Reality and The Blockchain”, the headquarters of British music-industry body BPI is one of the more surprising.
Aren’t its most powerful members – the three major labels – exactly the kind of companies who have most to lose from an all-new, uber-transparent system of tracking music rights and paying for usage?
Maybe. Which is certainly one reason for being curious about how such a system would work. But the early evangelists for such a system – notably PledgeMusic founder Benji Rogers, argue that the blockchain would enhance the businesses of the BPI’s members, rather than destroy them.
That’s why the BPI invited Rogers in on a windy Monday evening for the first in a planned series of “thought-leadership events” tackling big topics and new technologies.
He was joined by musician Imogen Heap, who’s also been digging into blockchain technology in recent months from an artist’s perspective. For an hour and a half, they explained what they’ve been doing, what they’d like to do next, and fielded questions from the audience about the potential challenges.
(Some background reading: Rogers’ recent How the Blockchain and VR Can Change the Music Industry post on Medium, and Heap’s two-part interview on Forbes about her Mycelia project.)
BUILDING THE BLOCKCHAIN
Rogers kicked off with a brief introduction to the bitcoin cryptocurrency, and its underlying ledger – the blockchain – that tracks transactions using it.
“Once you’ve put and registered something in a block in the blockchain, it’s immutable. It can’t be changed. You would have to overpower 51% of the computers running in the network,” said Rogers. “It was designed very cleverly to be a trust-less system: it’s decentralised, nobody owns it.”
Rogers had an idea – “in the shower!” – that the music industry could make use of the blockchain for its own new music format: something he’s dubbed .bc, or “dot Blockchain”.
He hopes it will solve one of the most entrenched problems of the music industry:: the lack of an efficient way to track music rights, ownership or payments globally across the business, despite several (failed) efforts to build a centralised database of music rights.
Rogers’ vision is for a “fair-trade music format” that ties in to a new public, open database of rights, even though he admitted that challenges include inputting tens of millions of existing songs into such a system; identifying out exactly owns each of those songs in the first place; and deciding who would set up such a system.
Creating the format is the first step towards populating such a database. “As an industry, because we don’t control the format our music goes out in, we don’t have a way to express what is fair and what is unfair. We have to basically police it after it has happened,” said Rogers.
“If we as an industry can define this set of rules of what we consider to be fair-trade, then we can figure out what is sweatshop, versus what is fair-trade.”
Such a format would start with the “minimum viable data” (MVD for short): details of the recording ownership, an ISRC/ISWC/ISNI code; publishing information; mechanical rights information, performer data; global licensing rules; usage rights; lyrics and images; payment details; and contact information.
GETTING REAL ABOUT VR AND AR
Where does virtual reality fit into all this? Rogers said he sees the emergence of VR (and the related technology of augmented reality, or AR) as the next format change for music – and thus a good opportunity to persuade music rightsholders to adopt a new format, with its MVD requirements.
“What I’m proposing here is a new format. We had vinyl, tape, VHS, CD, MP3/WAV/ACC/MOV, DVD, vinyl again, then we had BluRay. And what’s coming is virtual reality and augmented reality – and they have no standardised format or codec,” he said.
Rogers pointed to the sales of Google Cardboard headsets – 5m at the time of writing – as well as the upcoming launch of the Facebook-owned Oculus Rift headset.
“VR has been around for a long time, but it’s now at the point of what I would consider to be deployment – and there is no standard way to express a creator’s rights into something secure in VR today. It doesn’t exist.”
Rogers cited a prediction by consultancy firm Digi-Capital that VR and AR revenues will reach $150bn by 2020, and described the technologies as “The largest deployment of a new format since DVD/Blu-Ray. I think it’s going to dwarf that: I think it’s going to become like the book.”
So, the .bc codec would be a new music format that would be playable on devices and software designed to play VR and AR content – which would include current and future music and video-streaming services.
Rogers wants the music industry to come together to set the rules for the new format, and then push for the digital services to agree to ONLY play .bc-authored content. Which would include “telling YouTube and all the other players that you have until 2017 to become .bc compliant” for example.
Any content separated from the .bc codec would thus be “not playable”, while any services refusing to become .bc compliant would be “falling into the sweatshop zone”.
‘DIGITAL RIGHTS EXPRESSION’
If there’s a warning klaxon sounding in your brain at the sound of this, it was in Music Ally’s too – but to his credit, Rogers brought it up himself. Doesn’t all this sound like digital rights management (DRM) – an area where the music industry has a chequered history?
“Why is it a dirty word, that you as an artist would be able to manage your rights?” said Rogers, while acknowledging that yes, DRM is a dirty word. “So what I’m terming it as now is digital rights expression. Spotify will still work at the same level Spotify chooses to, but the key is if you want to use my beautiful ballad in a porno, you can’t – and if you do, I can tell you to take it down, because I said no.”
Once a .bc file is delivered to a digital service or player, it would be decoded according to the .bc rules, authorising or rejecting the playback of the content. And if desired, a payment would then be made to the owner or rightsholder for the usage of that music.
The key for Rogers: the act of creating the .bc files would build and then add to a global decentralised database of rights. He thus sees VR and AR as the “Trojan horse” to get older songs and catalogues into the new format – and thus, into the database.
The latter will be future-proof, he hoped, even for forms of content not envisaged at the time files are originally encoded.
“If we agree to six or seven core pieces of information that make it fair-trade, then you can add to that information infinitely. That’s what makes it future-proof,” said Rogers. And that could also take into account ownership changes: for example, when publishing catalogues change hands, or songs revert to their creators from a rightsholder.
“We’ve got to start with a kernel of truth, and that truth is authored in every time it happens,” he said. “If we own the format as an industry and we say this is how our rights get to people… and a use case has not yet been thought of, well, you know who to contact.”
NOT JUST A SONG AND A PLAY-BUTTON
Heap spoke next, as an artist currently out of her label, publishing and management deals. That’s given her the freedom to not just think about new ways to handle her rights, but to practically explore them too.
Hence her Mycelia experiment, and the first track released through it: Imogen’s own ‘Tiny Human’. Heap stressed the creative implications: not just having “a song and a play button” but adding the cover art, metadata on the people and even the instruments involved.
“As an artist there’s so many things that go into the making of that music that don’t get shared, which could really really do with being shared,” she said. “It’s about going ‘here’s a beacon of information: come and get me, and let’s do business.”
She said the ability to track usage of these works will have benefits for the artist: “Anyone playing at that particular moment in the world, as an artist you could look at it: who’s playing my songs at the moment?” Including drilling down to the level of a radio DJ who’s just played the track, and ringing them up to say thanks.
“This idea of the goodness, the creative stuff that the industry’s built around exists under here as a nice layer. And above it are what I call the mushrooms, the services like Spotify, and then the fans at the top. So it’s a way of enabling those services to use the music under the terms of the artists, the rights-owners,” said Heap.
“We need to set the ethical, technological and commercial standards around how our music is used… At the moment, artists, we’re first in and last out: first in with our work, and right at the end, if we’re lucky, we get some cash back.”
When Heap released ‘Tiny Human’ on her website as an experiment, she challenged developers and startups to run with the idea, and create interesting uses for the information encoded within it.
One of the most interesting so far came from Ujo, which built a prototype with ‘Tiny Human’, which is explained on its site:
“Our prototype is a complete, self-contained song ecosystem. You can explore the Tiny Human network, examine the policies associated with the track, see how payments are automatically distributed to the different contributors to the song and – if you have the cryptocurrency Ether – buy a download of the song and have your transaction recorded permanently on the blockchain.”
TEAMING UP WITH DEVELOPERS
Heap admitted that for now “there’s a very very small amount of people buying” but was enthusiastic about the prospect of more developers and startups getting involved – she’s running an upcoming hack weekend to encourage them.
“It’s a really amazing opportunity for me as an artist: I want to help shape how I would like the industry to be, and how it can work better for me,” she said.
“Why can’t we make something which is beautiful and fair, and enable people to really be creative with our content, instead of going ‘you can’t do that, or that, or that’… Nothing gets done until we do it. So let’s do it!”
Rogers and Heap proceeded to take questions from the audience about the challenges facing these kinds of ideas being put into practice. For example, how would they ensure the people creating .bc files with the minimum viable data have the rights to do so – versus, say, someone encoding their ripped MP3s of Beyoncé tracks and releasing them into the wild?
“As you’re uploading a song, it’s going to scan existing databases, it will scan Gracenote, it will scan Omnifone, Shazam, for any existing prior art. And it will say hang on, this already exists somewhere,” said Rogers.
“It’s not going to be perfect, but it doesn’t need to be. Omnifone already has a massive amount of this data, PRS has a massive amount of this data. It’s just not in one place… As long as the uploader scans existing databases, it’s not going to allow the reinsertion of the same song again… I would think there isn’t going to be much that gets through two, three, four databases on the way in.”
Perish the thought that there would be disputes around this, but… well, there would be disputes. Who would arbitrate them?
“I think that we need to crate a consortium representing labels, publishers, digital service providers, artists, managers – all the people in this – to create a governing body that would handle certain amounts of dispute resolution on the way in,” said Rogers. “As far as resolution conflicts, it will basically be handled offline in the same way you normally would.”
Heap suggested the idea that artists might be “verified” much like they are on Twitter or Facebook, confirming that they are the owner of their works. “So if someone who isn’t verified as Imogen Heap is trying to upload one of my new songs, they wouldn’t be able to,” she said.
CALL FOR COLLABORATION
Rogers stressed the need for collaboration across the current music industry, from artists, labels and publishers to collecting societies.
“Imagine if we put the smartest brains in the room to solve the problems of uploading, of ownership,” he said. “There’s no one that’s not invited to the table here.”
There was a consensus – even among questioners – that the main barriers to a blockchain-based system being adopted for music are not technological, but commercial. Can such an idea really get buy-in from the biggest rightsholders and collecting societies in the first place – and can those entities really work together to agree the MVD requirements and a timescale to launch?
“Everyone wants this today, and I believe fundamentally that people are now seeing that the usage potential for revenue so far outweighs what is being made now, that they’re saying we could get around this concept,” said Rogers.
“I feel that the idea of the industry owning a format is compelling enough to where we can gather as a body for the first time. And the fact that the PRS or MMF or Featured Artists Coalition and the labels are all coming together to solve this problem is an opportunity.”
He added that there will be benefits for digital music services too, referencing the recent songwriter class-action lawsuits against Spotify in the US. “Spotify doesn’t want to get sued, it’s pointless. We should be solving this problem together,” he said.
“It’s got to have everyone saying ‘why would you need to use a file without its data… What advantage is there? SoundCloud, why do you need this to not have who to pay written into it? YouTube, why do you need this not to have the publishers and the labels information written into it?”
Don’t some of the biggest rightsholders have vested interests that would prevent the proposed .bc system from happening?
“I don’t think there is any more. We went from $38bn to $16bn, and it’s going up very slowly as a global music industry,” said Rogers.
“Who wins in this scenario and who loses? It’s not going to make sense to hold back as usage scales. There’s so much more money on the other side of this thing… for the first time the industry is gathering in a way I’ve never seen.”
KEEPING YOUTUBE OUT OF THE ‘SWEATSHOP ZONE’
Is the pitch to a YouTube mainly about threatening to put it on the naughty step – or in the ’sweatshop zone’ – if it doesn’t adopt a new format created by the music industry? Or are their carrots to go along with that stick?
Heap suggested that creating some kind of “fair-trade music identifier” – a logo that would be displayed by digital services to show that “this is authentic, this is real, this is fair” might be one benefit. Rogers said there would be other commercial reasons for YouTube to join in.
“Every .bc would basically contain within it ‘monetise, add to YouTube: yes or no?’ YouTube would realise that they can put ads on 90% more content than they do, because they wouldn’t have to figure out disputes within it,” he said. “No one likes to have their business model shaken up, but if right now they monetise 10% of their views, imagine if they could triple that.”
Rogers was asked whether another commercial barrier is the public nature of the blockchain and its transactions: will this undercut major music company’s desire to negotiate catalogue-wide licensing deals for their content – and the privacy/secrecy (delete according to preference) of those deals?
He replied that he thinks the .bc system will free them up to strike more adventurous deals. “You’re creating more sets of possibilities when you globally author what your content can and can’t do,” he said. “It’s about digital rights expression. I know this sounds wishy-washy, but it’s true. If you have a large catalogue, this is powerful for you.”
“I wonder if there’d be a reason for them to do deals like that if they were making so much more money from everyone paying for the music,” added Heap.
Finally, what sort of timeline are we looking at for this kind of system to be up and running? There were a couple of audible gasps of surprise when Rogers answered that question.
“My goal is to have it by the end of the first quarter of this year. It’s gonna be name of song, name of artist, ISRC… I’m optimistic that we can come up with a suggested minimum viable dataset relatively quickly,” he said.
“But I think it needs someone to really take this by the scruff of the neck in terms of doing it… If we can’t agree what five or six pieces of information constitute fair trade, we should all quit, because it shouldn’t be that hard.”