There has been a surge of discussion in recent weeks about whether blockchain technology could be part of the drive for more transparency in the way digital music services’ payouts make their way to artists and songwriters.
A report by Rethink Music pitching a role for blockchain tech and cryptocurrencies ignited the debate, while interviews with musicians Zoe Keating and Imogen Heap have emphasised that some musicians are already getting to grips with the implications.
A blockchain is a public record of all transactions that have ever taken place in a cryptocurrency like bitcoin. A new ‘block’ is added roughly every 10 minutes, listing all the transactions taking place during that time, with any change to the database requiring the support of more than half the currency’s users, for security purposes.
It’s the engine of cryptocurrencies like bitcoin, but could it really have an impact on music? Music Ally has been canvassing opinions for our latest (subscribers-only) report, and thought it was worth giving two contributors’ views a wider airing in front of our paywall, to continue the debate.
First, Gregor Pryor, who as partner at law firm Reed Smith, has seen the sharp end of numerous licensing deals in the digital music world – and is thus well-acquainted with the various black boxes of the industry that blockchain is seen as part of the solution to.
Pryor, though, is sceptical about the latter view, pointing out that for the kind of solution proposed by Rethink Music to come off, it would require first a widespread adoption of bitcoin (or similar cryptocurrency).
Second, it relies on the ability of music rightsholders to create a global, unified database of music rights – something that’s been tried with the Global Repertoire Database (GRD) project, which was canned in 2014.
“It became a huge white elephant, because the industry among the publishers couldn’t agree on some pretty basic things,” said Pryor. “The other comparable example is DDEX [the consortium trying to create digital supply-chain standards in the music market]. If you think about how long both those have taken to put together, you see the challenge.”
Pryor also thinks labels will have problems creating a unique identifier for many songs – especially those distributed in several versions across the world – particularly for independent labels, who may have multiple distribution deals in place for different markets.
“I would distil that problem into saying that it’s a rights management problem. So you’ve got a data problem, an adoption problem, and a rights management problem, when you start looking at this in more detail, even though it [initially] seems like the holy grail… And that’s before you think about the majority of music revenues coming from broadcast and performance, not digital.”
Blockchain? “It’s a nice soundbite, and it’s right to explore it and consider it. But as it stands, rather than a blockchain, it’s more a pipedream actually,” said Pryor, although he welcomed the debate. “The transparency that everyone’s really calling for is what are the deals between the big digital services and the rightsholders? And the blockchain thing is instructive, because it requires you to look at the way the money flows.”
For a more positive – evangelical, even – view, turn to PledgeMusic president and founder Benji Rogers, who’s been digging in to blockchain technology and cryptocurrencies for some time now.
“It’s going to radically change quickly the way in which payments are made, and the music industry won’t really have a choice. The content industries won’t have a choice: it’s going to be a fact: all of a sudden, it will be possible to pay out hundreds of millions and billions of micro-transactions.”
Rogers added that he is not blind to the technical and business hurdles that are in the way of a blockchain-based system being adopted for music payments, but warned against drawing firm (negative) conclusions from the current market.
“The questions about the limitations are the equivalent of asking pre-Google ‘what will search look like?’ or pre-Chrome or Safari ‘what will the web look like?’. It’s like looking at Netscape Navigator in 1995 and trying to imagine Facebook in 2015,” said Rogers.
Instead, he wants the industry to view this technology as the driver for new kinds of digital music services that can break out of the £9.99-a-month all-you-can-eat straitjacket of the current streaming market – something he thinks will rely on new music formats that have the micro-transaction payment mechanisms built into them.
“It produces a way of creating low-cost, low-barrier-to-entry music services for dissemination and consumption, based on what the listener wants, as opposed to the standard ‘it’s £9.99 and you have to have it all’ approach,” he said.
“That’s where the potential is staggering: consume what you want, and in the quantity that you want. The music industry has reached its maximum point of disruption, with revenues having fallen drastically over the last 15 years. I think this technology has arrived just in time.”
The longer version of this article was in this week’s Music Ally report. Sign up for a free trial to our research service here.