How can blockchain change the music industry? (#midem)

Blockchain technology and music. An obscure topic that barely gets any attention at industry conferences in 2016. Oh, wait…

Yes, the potential impact of the blockchain is a well-trodden path at industry events in recent months, but a panel at the Midem conference today aimed to find some new aspects to discuss.

On the panel: Joe Conyers III, VP of technology for Downtown Music Publishing; Vinay Gupta, release coordinator and general strategist for Ethereum; musician Imogen Heap, who has been exploring the blockchain’s potential with her Mycelia project; and Revelator CEO Bruno Guez. The moderator was Allen Bargfrede of Rethink Music at the Berklee College of Music.

The panel started with a definition of the technology and how it works. Guez explained that it’s about getting groups of transactions into groups, and recording them into an immutable ledger. “Ultimately the idea is to be able to create a more efficient recording device: an accounting ledger for transactions. It’s a shared database, that’s decentralised, and many people can write to.”

Gupta added that “the blockchain is inevitable.. it isn’t a simple convenience, it’s necessary to create a level playing field to endure the system is fair to everybody, wherever they are in the world… the block is here to stay, I think.”

Bargfrede noted that the banking industry is spending “hundreds of billions of dollars” investing in this technology. “All of the banks have come to the conclusion that these technologies are going to be central to some of their operations,” agreed Gupta. “They don’t see the blockchain as being fundamentally different from half a dozen transformations they’ve gone through in the last 35 years.”

Guez talked about the need for standards. “Once you can have standards, you can have a more efficient marketplace,” he said. “Everyone can read or write the information in the same way.” Something that has obvious potential for publishing rights, in the music world, where a unified database of those rights has long been a goal for the industry.

“You have to use it as a tool rather than an ideology,” he warned, before adding that “not every blockchain is created equal” – if the music industry is going to make the most of this, it will need to grasp the pros and cons of different variants and providers of this technology.

Heap gave a songwriter’s perspective on how songs “go out into the world and then it falls of a cliff – I don’t know what happens to it” bar any stats she gets back on sales and streams and airplay. She’d like to be able to attach a lot more information to those songs too: from photos and her latest biography to the correct details of the songwriters, producers and performers on the track.

Heap sees blockchain-powered “smart contracts” as being able to provide this, which is what spurred her to create Mycelia. She released a song called ‘Tiny Human’ on her website, with all that additional information, working with a company called Ujo to put the music up on its blockchain-powered service. Everyone who played on the track had a percentage of it, and were automatically paid directly whenever a sale was made.

Heap used the ethereum blockchain for all this. Gupta said he wanted to avoid too much discussion of how the technology works – it will get easier as it matures. “The important part for the music business is two functions. The first is these permanent records of who did what,” he said. “The film industry did this with iMDB… if you were going to redo iMDB today, you’d do it on the blockchain.”

The second thing is the smart contract. “Basically a tiny little program that has fixed instructions about how to move money… you store it permanently on a blockchain, and when payments come in, it says ‘we’ve received some money: this much goes to the taxman, this much goes to our contributor, this much goes to our studio…”

“The core model is something kinda like iMDB that handles payments as well as information about who did what,” continued Gupta. “Music listeners have never had it so good [with streaming] so how do we create a similar utopia for creators?”

Conyers said he has been studying how the blockchain will affect how Downtown interacts with its songwriters and its streaming-service partners. “We’re going to have much more real-time and truthful transactions… There’s a lot of black boxes in the world of music, a lot of siloed databases that are in different states of disrepair,” he said.

“How does the industry adopt this as soon as possible, because there are going to be massive cost savings. It’s going to thin the way the industry works, because you’re going to have to find where your value is.”

Conyers said he’s had a lot of feedback from the industry: concern about how they will know that whoever is adding information to a song is the person with the rights to do so: how will they know the ‘Imogen Heap’ uploading a track really is Imogen Heap?

“What blockchain does enable is it gets us closer to the truth. There’s a lot of missed truths in the industry, mistakes that are covered up, probably a lot of embezzlements,” he continued. “Is the value [in music rights] in not telling the people the data that you have? That cannot continue… We’re probably going to have a greater need for collective bargaining too.”

Conyers added that “it’s going to grow the pie in ways we never thought of. We’re going to have a much bigger industry, and much cleaner data.”

Guez said there will need to be collaboration: for example, to decide what metadata is part of the standards for any blockchain-based music system. “Standards are key, and I think that’s got to come first,” he said.

“It’s not just about money, it’s about curating that data that comes back from the users,” said Heap. “Imagine being able to plan a tour because you could see where in the world a song was really firing off… I’d love to create an app called ‘Thank the DJ’, so you could connect with every radio station in the world, and when they play your track you could call them up to say thanks!”

Other panel members said that increasing the efficiency of music payments will be a big benefit from the blockchain: for example, publishing royalties. “Amazon Prime can deliver an object to your house in an hour. We ought to be able to process a music payment in less than two years!” said Gupta.

“I spend way too much time going back and forth with lawyers over services that won’t survive,” said Conyers. “I would like to help them survive”. And “smart contracting and other experimental ways to do licensing” could help in that process.

How do we get to a bigger level of adoption, including major rightsholders and collecting societies? Heap said that it’s more important to get a pilot up and running so that the industry can see it working. “It might be small, it might be a few hundred people, but begin that pilot. Then we can go ‘look, PROs. Look labels. This isn’t something to be frightened of, it’s something to be excited about… We can see the music industry flourish, rather than feeling like it’s just grinding to a halt.”

Heap and collaborators will be doing exactly this: designing a pilot at a hack event in July at the Sonos Studio in London, before publishing the idea for people around the world to examine.

Gupta said those pilots are already well underway in the financial industry. “For music, the prototypes are just about here, by the end of this year I think there’ll be a bunch of solid prototypes,” he said. “In 20 years, we would all have very much the same vision of this environment where songs are taken, mixed, added to video, distributed… it’s really a question of how does the path look like between here and then?.. In general, the time has come to be early adopters. Music historically has been quite slow to transition from technology to technology. It may be time to lean in a little harder.”

Guez warned that digitising relationships and codifying trust in the music industry may be challenging, but will be an important step in this process. “How do you build that trust? It’s easy for us to say let’s build a prototype with a couple of hundred thousand songs on there, but how do we move towards the major providers and build trust?”

Gupta talked about a very practical application for blockchain technology: a band struggling to make their rent, who go into the studio one weekend and “bang out an album then post it to social media” – come Monday, there’s $350 in their account to pay the rent. Conyers picked up on this: “As an industry we’ve really done a disservice to the middle-class musician by not getting them paid faster,” he said.

“Streaming is maybe never going to be enough to sustain artists. There’s so much music out there,” said Heap. “So how can we help the ecosystem with all of that other stuff I can do?”

Gupta said that the industry is still waiting for the blockchain to break out more into mass culture: when mainstream people are more aware of what it is and how they can use it, that will help takeup within the music industry. “When it becomes just the easiest, simplest thing to do, that’s when it’s going to get mass adoption,” said Heap.

What role will collecting societies have if blockchain technology wreaks its magic on the music industry? “They have a very big place in this world,” said Conyers. “The societies do add a lot of value. I’m not going to go to every little store and knock on the door and ask if they’re going to license the music.”

“It could be that what the collecting societies do is look out for their songwriters and try to get the best money for them. They can continue doing that,” said Heap. “It’s about them reshaping their goal… we still need all their great knowledge from the past and what can happen in the future.”

“The societies are a trusted party on the network,” said Guez. A member of the audience from a society chipped in at this point, suggesting that while collecting royalties may go through the blockchain, validating the different parts of the chain may be the society’s important role. Validation societies, rather than collecting societies.

“If it’s not verified and solid, then it’s absolutely worthless,” agreed Heap. “So that’s really important: the validation side.”

“The last 50 years, we didn’t have technology. The next 50 years, it’s all about technology. So why not make the market more efficient?” concluded Guez.

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