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Jaak hails its first blockchain music-rights pilot with rightsholders


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British blockchain startup Jaak has revealed details of its first music-industry pilot, with partners including Warner Music Group, Warner/Chappell Music, Global Music Rights and BMG.

China-based consultancy Outdustry, independent publisher Sentric and Phoenix Music International are also part of the pilot of Jaak’s blockchain network KORD – previously known as META.

The pilot has seen the music companies adding their product and rights data to KORD, with Jaak having built tools to detect conflicts within that data – for example disagreements on the royalty splits for publishing rights to a particular song – so that the rightsholders can try to resolve them.

The pilot isn’t just about a decentralised database of music rights, though. Jaak sees KORD as a platform on top of which other music services and products can be built – it has already developed one prototype which “demonstrated how blockchain technology can provide rights management and licensing capabilities on a global scale” according to its announcement.

There are several quotes from the partners in the pilot alongside the announcement. “We’ve invested heavily in our own systems, but we’ve also worked with pioneering partners, such as JAAK, to help us keep at the cutting edge of technology in this area,” said Warner/Chappell’s EVP of global operations Steve Clark. “The pilot is going well.”

“KORD is technology that enables stewards like us to collaborate on the dynamic picture of every song and ensure the correct writers and publishers are accurately and efficiently compensated,” added Global Music Rights COO Sean O’Malley. “From studios to streaming sites, a clearer picture of recordings and copyrights could yield untapped benefits for artists and writers — and JAAK is pushing an exciting frontier,” added BMG’s Sebastian Hentzschel, CTO & EVP Recorded Royalty Processing, IT & Systems.

Music Ally talked to Jaak CEO Vaughn McKenzie-Landell to find out more about what KORD means now; what it could lead to; and what it shows about the wider intersection between blockchain technology and the music industry. He said that the company’s focus is firmly on the initial problem to be solved: establishing accurate rights information from many sources.

“We’ve been working on this problem for a while now, and ‘carefully’ is the right word: we’ve made sure not to focus on anything that could potentially derail us from trying to solve the problem,” he said.

“This is still the first step: we have to lay the foundations, build this infrastructure, and build from there. There’s lots of discussion about real-time royalty payments and transparency, and those could be really useful, but they’re not things we get overnight by default. We need to get the technology up and running today first.”

McKenzie-Landell said that the group of initial partners for the KORD pilot has been carefully picked, to represent different classes of music rightsholders – publishers, collecting societies and both major and independent labels.

For now, Jaak isn’t talking about any involvement from digital service providers (DSPs) – large streaming services for example – but McKenzie-Landell suggested that those players’ involvement may be something further down the line.

“The DSPs are always going to be excited about new technology, but I think this starts with rightsholders, so they’re less important immediately,” he said. “It’s obviously something they’re all interested in, and we’ve definitely had interest from DSPs, but that will become way more important once we get the solutions to work.”

Technology like KORD is far from a magic solution to the music industry’s problems around rights. For example, it can detect conflicts in the information supplied by different rightsholders, but actually resolving those conflicts is a task for humans.

“We could design a solution that automatically fixes disputes, but would the fix be something people wanted? Would the fix gain consensus? These are all things that can be pursued,” he said.

“But if you fundamentally disagree on the information… if two people make some music and never decide whether they’re going to split it 50/50 or 60/40… There is some interesting stuff around that in terms of how you may be able to help them sort it out.” But for now, that’s not a role Jaak is trying to take, beyond identifying the conflicts where they exist.

One question around technology like Jaak’s is whether blockchain technology is really necessary to solve the problems around music rights. Indeed, in the FAQ accompanying today’s announcement, the last question is ‘Wouldn’t a centralised database solve the same issue, and more efficiently?’

Jaak’s argument is that a decentralised network avoids a ‘central controlling entity’ – and the inevitable rows over who that should be – while also swerving the prospect of a ‘single point of failure’. But Music Ally asked its CEO to expand on that argument.

“We’ve been really trying to get this point out: it’s an important distinction. You can focus on why blockchain has been very useful in Bitcoin, or the Ethereum blockchain, but that’s not necessarily why it’s important for the music industry,” he said.

“The industry has a specific problem to solve around having one global view of a dataset. If you can get all that information together, and you have a global dataset of rights for every single organisation, that’s great, but where do you put it?”

“If you put it in a database, that’s also great, but you have to think about the governance around that database. Who owns it? How do you access it? Is it paid or free?… We can’t really extricate the commercial incentive from owning that database from the utility of that database.”

McKenzie-Landell pointed to competition issues too: how much of a music company’s data does it feel comfortable being visible to its direct rivals, for example?

“What we feel blockchain is specifically useful for is creating an environment where the information itself is decentralised – not in one place, all over the place – but with a standard ruleset that creates a global view of that data,” he said.

“No one can forcibly own or manipulate that database, because it’s not owned by one party. That’s the point that we should be trying to nail. And we can then provide some use cases – for example micro-licensing and scalable licensing – which sit on top of that network and tell you why that would be useful for someone today if it existed.”

“This isn’t about immutability, and it’s not the fact that you can have a cryptocurrency. It’s about building a space in which everybody can collaborate.”

Jaak isn’t the only startup working on this kind of thing. Dot Blockchain in the US has signed up a similarly-varied group of partners for its own technology pilots: Socan and Medianet, Songtrust, CD Baby and Fuga.

In the UK, meanwhile, Blokur is working on its own technology to identify and resolve conflicts in rights data. Without leaping to an assumption that one of these (and other) companies has to ‘win’ and the others ‘lose’, are there risks in this potential fragmentation of platforms and pilots?

“Our network will be a public network, with open source data. I’m not entirely sure about every other project, but we’re working towards a point where some of that information will live in a public network, and part of that will be around the rights,” said McKenzie-Landell.

“There should be a way for you to find information and know who owns what. Stuff that’s more sensitive won’t live in that database, that’s the idea. But if other projects are interested in that [the open source data] they can obviously use the information there. We shouldn’t be competing on that: we’re just trying to build the best technology.”

“As long as we solve this problem, it doesn’t necessarily matter who solves it. There will be tons of opportunities to build once we get that solution.”

Stuart Dredge

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