This guest column comes from Robert Ashcroft, CEO of PRS for Music:
“The issues of data, value and protection for songwriters have never been so high on the agenda.
In early 2016 I had a conversation with George Howard for a blog he was writing for Forbes about the biggest issue facing the industry in the internet age.
I explained that establishing authoritative copyright data had long been a goal of PRS for Music and that there is a need for new models that address the challenge of multi-territory licensing and high-volume transaction processing.
PRS for Music has been investigating the potential of many technologies to help address the data challenges, including blockchain. The digital market requires real-time reporting on behalf of multiple stakeholders across the world. If blockchain can help us achieve this, it will unlock opportunities for developers of new digital applications, increase accuracy of royalty payments and release value for rightsholders.
There has been a significant amount of press coverage about blockchain and some leading music industry figures have been promoting its adoption as the solution to address many of the challenges facing rights holders.
One of the key benefits that blockchain brings is in its use of ‘public’ and ‘private’ keys, which allows for the creation of an authoritative link between the two parties that wish to interact. Once this link is established, then transactions can be made at speeds far greater than currently achievable, which is why the finance industry is leading the development of blockchain applications. Each interaction is permanent, and can be visible, allowing for far greater levels of transparency.
One of the key areas of dispute however in a blockchain-enabled world is around ‘authority’. Who should be allowed to write the blockchain, and who should be held responsible for the maintenance of records stored on it?
This is particularly pertinent in an industry where data is neither perfect nor permanent (in that portfolios of rights change hands) and where disputes occur with frequent regularity. Traditionally the role of data authority has been played by collective management organisations (CMOs), like PRS for Music, through their own centralised, proprietary datasets.
Some blockchain advocates see the technology as an opportunity to reduce the need for intermediaries, as greater connectivity between creator and consumer will, theoretically at least, alleviate the need for middlemen such as accountants, labels, managers, publishers or collection societies. This is not a view shared by all.
The counterargument is that creators want to create, and while there may be a merging of some roles in the future, especially as technology improves, there will remain a need for third parties to carry out support functions, rather than pushing this burden back on to the creator.
There is also a fear that while there may be cost-saving achieved through disintermediation, it could have a negative effect on value as the premium achieved through collective bargaining is eroded.
For a blockchain to be correct, the provenance of the data must be assured, and the data must be as close as possible to the source, i.e. the songwriter, composer or producer. There are few who have sole rights for a work, so the CMO to which the rights have been assigned assumes responsibility on behalf of the creator for managing and tracking the use of their works.
CMOs have been managing issues of data conflicts, fragmentation of rights ownership, and accurate distributions for many decades – over a century in the case of PRS for Music – and will take on more, not less, significance in the online era.
There are valid questions around the continued viability of the use of many proprietary data sets for licensing and royalty distribution purposes. Not all data sets are created equal, particularly those that are accumulated via a long chain of transactions, which take the data further and further away from the source of the information – that is, the rights-owner.
Data moves quickly; some datasets will have the correct data connection at one point in time and the wrong data connection in the future. So, while the Global Repertoire Database (GRD) initiative failed, there remains a need for an authoritative source, not only of copyright data, but also of the links between such data and the sound recordings based upon it.
The need for an alternative to the GRD has been addressed in part by PRS for Music’s partnership with GEMA in Germany and STIM in Sweden and the creation of ICE. This hub is a central resource which will scale as further societies and organisations join. However, PRS for Music is developing other models that will complement ICE and other hubs around the world and work with them.
PRS for Music has developed a series of data linking initiatives in partnership with other CMOs to bring data sets together. PPL is the organisation that represents artists and the rightsowners of recorded music and licenses recorded music played in public.
We have collaborated and produced a successful proof of concept, linking the data sets of both PRS for Music and PPL and creating a prototype search tool to improve identification of sound recordings and musical works and the links between them.
We are also working with SACEM, the Society of Authors, Composers and Publishers of Music based in France; ASCAP, the American Society for Composers, Authors and Publishers; and the technology provider IBM to make use of a blockchain technology called Hyperledger.
This will enable us to match, aggregate and qualify existing links between the codes identifying the sound recordings and the corresponding musical works so that we can confirm correct ownership information and conflicts. The creation of an authoritative source will enable better monetisation of our members’ works, more accurate distributions and lower administration costs for all.
The Hyperledger platform from IBM is a crucial element of the project developed with ASCAP and SACEM. It is a private blockchain where everybody on the network keeps a replicate of the data by design. This architecture makes it easier to share and to plug new users into the network. This accessibility is of vital importance in supporting the philosophy that drives this project.
The ability to provide accurate and assured data will provide a huge revenue opportunity for rightsholders across the world and we are already attracting interest from many CMOs and digital service providers. They recognise that the benefits extend across the developed and underdeveloped copyright world.
The development of a hierarchy of data authority protocol is a crucial next step and will be the key that opens the door for the industry. For the combined initiative to be successful, we need to agree a protocol that the industry has informed and values. Only then can we maximise the benefits of blockchain and ensure that the correct data is used always.
The digital age offers the music industry immense potential and the combination of technology and creative solutions will ensure that money flows back to its rightful owners. We are very keen to open conversations with more industry stakeholders to ensure that this happens.”
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