A reminder that the Venn diagram of ‘music people’ and ‘blockchain startup people’ is not a pair of separate circles. Phil Barry, founder of British startup Blokur, was a professional artist making electronic music as Mr Fogg before setting up his own independent label.
Barry went on to lead the team of consultants working on Thom Yorke’s 2014 project to release his Tomorrow’s Modern Boxes as a BitTorrent bundle, before founding blockchain startup Ujo Music, overseeing its work on Imogen Heap’s ‘Tiny Human’ project.
A parting of the ways with Ujo followed, with Barry founding Blokur to continue that work. He stresses the company’s desire to be as down-to-earth as possible.
“Blockchain technology comes from a weird mix of computer science, quite out-there political ideas, and quite out-there economic ideas,” he says. “There’s been something of a gap, historically, between the people working on the technology and any user that there might be for a product based on that technology.”
He adds, “What we’re interested in at Blokur is whether we can make a product that solves a real problem. We have lots of excitement for the potential of this technology over the next five or 10 years, but we have to build something that people can use now. It’s true that there’s a tension there.”
Blokur currently has a 10-strong team, including CTO Andres Martin-Lopez, formerly senior product innovation manager at Universal Music Group, and head of business development Emma McIntyre, former head of music publishing partnerships at 7digital.
“We think we have the best understanding of the music industry, which is why we’re so focused on solving its real problems,” says Barry.
While Blokur isn’t quite ready to talk in depth about its plans, they focus on partnerships with some of the largest collecting societies, publishers and artists. And the problem to be solved is well-known.
“It’s based around bridging the siloes between different sources of rights data and reconciling the claims that exist, so we can have a complete and accurate picture of rights data,” says Barry.
“It’s solving the problems of ‘if your rights aren’t represented somewhere, you don’t get paid’ as well as cutting the costs of resolving disputes… (using) an algorithm that automatically reconciles different claims on rights to a single state, captured on the blockchain.”
Barry, like a number of his peers, thinks that many of the music industry’s surface problems – from piracy to artist complaints about streaming royalties – boil down to “boring, prosaic, complicated database problems which are actually quite difficult to see from the surface”.
Past efforts to tackle those problems – most notably the collapse of the Global Repertoire Database (GRD) project in 2014 after £8m (at least) of investment – have highlighted the difficulties involved. Although it’s also fair to say that those challenges were not just about technology, but about the interplay between the collecting societies involved.
“The technology on its own is not the whole picture. That said, blockchain technology creates new opportunities we haven’t had before, for new ways of collaborating, and new ways of piecing together data from different siloes. That is a new thing,” says Barry.
“If you think about the GRD, a centralised solution would require you to have a whole question about who owns the database and what are the rules. If you do things in a more distributed, decentralised way, you can bypass a lot of those problems.”
Barry also says that one of the frequent worries about a blockchain-based successor to the GRD – the question of whether proprietary, sensitive data (for example songwriter splits or label deals) will be made public – is misleading.
“Yes, behaviours will need to change slightly for this to happen, but it’s a misconception to think that, for this solution to work, we need lots of data that is currently secret to be made public. That is a red herring,” he says.
Barry’s former company Ujo Music is open (elsewhere in this issue) about its low opinion of collecting societies and traditional music rightsholders. Yet his new startup clearly sees those entities as its key partners.
“We’re still in the early stages of development of this ecosystem. But we believe we are going to come up with a model that makes more value for the industry,” he says, stressing the importance for blockchain startups of proving their worth, rather than just threatening a storm of disruption.
“All the startups have to prove we’re doing things of value: we shouldn’t expect some God-given right to have a place in the ecosystem unless we’re creating value for somebody and serving creators,” he says.
That said, Barry thinks that the PROs and publishers can also play a positive role by embracing the potential of blockchain technology and engaging with the startups who have ideas for how it can be used.
“I would love music publishers, rightsholders and musicians to get to grips with the technology and small experiments,” he says, before widening out to the bigger picture.
“In my opinion, understanding this technology is going to be important to all kinds of businesses in the next five-to-10 years,” he says. “It will be strategically important to understand it in the way that it’s strategically important to understand, say, digital marketing today.”
Barry paraphrases a partner who previously held a senior role at one of the largest music companies as believing that in the future, music licensing in general will be handled through the blockchain, and that this is a “totally uncontroversial” idea even for the biggest rightsholders.
“I really hope that’s true. Every time I used to come up with new ideas for my own music, or for clients, or startup ideas, you come across these barriers relating to licensing, which also can stop you getting funding,” he says.
“We need to unleash the full potential of music by radically simplifying all of these processes […] For the price of music to go up, we need more streaming services, not fewer.”
This is a recurring point among the blockchain community that blockchain – in the words of industry veteran Jeremy Silver speaking at a Music Ally blockchain event in May 2016 – could fuel “a thousand flowers blooming” in the startups world.
Barry hopes that the music industry will appreciate the variety of new applications and businesses that could be involved.
“Ultimately, we’re talking about an underlying, fundamental technology that can be used for all kinds of different things in all kinds of different industries. Like you can use the internet, or Amazon Web Services, to do all kinds of different things,” he says.
“Blockchain does not lead to any one specific ‘solution’ for the music industry. It leads to a new set of possibilities, and new business models, and new opportunities for the music industry.”
Drawing on his own background as a musician and label owner, Barry also says that blockchain technology can be seen through a positive lens of growing income (and creating new income streams) for musicians and songwriters.
“We have seen huge changes in the way content and information is distributed around the world, but we haven’t had the same transformation in the flow of value back in the other direction, to the creators,” he says.
“I can upload my music to YouTube in seconds and have it viewed all over the world, but it might take me years to collect all the money I was due.”
“The motivation and mission of Blokur is to complete the potential of the internet for creators, if that doesn’t sound too grand. It’s half done: we’ve got the ‘content out to the world’ part. Now we need to do the ‘value flowing in the other direction’ part.”
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