How can blockchain make a real impact on music?


Today’s by:Larm conference in Oslo included a panel on blockchain technology and the music industry. No wait, stop! Don’t click away! Come back!

In fact, there have been so many blockchain panels at music-industry conferences in the last two years, we’ve probably used that intro joke before. It’s true, though, that there’s a bit of a backlash at the moment – not against blockchain tech itself, as such, but around over-promising what it can do for the industry and musicians.

Today’s panel aimed to talk about some of the more practical implementations of this technology around music, and how blockchain can make a meaningful impact for musicians. Speakers included Jaak’s Becky Brook; Reed Smith’s Sophie Goossens; and DBTH’s Virginie Berger. The moderator was Music Ally’s Steve Mayall.

The conversation started with Berger, who thinks that despite 10 years of investment in blockchain technology, and plenty of recent excitement around its use for music, it has yet to prove its worth.

“Philosophically it’s very interesting because it’s about identification of the works of the artists, it’s about payments, it’s about transparency… and it’s been quite complicated to find a solution,” she said, suggesting that we need to cut through the hype. “Most of the time it’s about ‘blockchain will serve the music industry!’. But for me, you have to understand the issues and work on those issues.”

Mayall talked about the first high-profile blockchain music project: Imogen Heap’s ‘Tiny Human’ song, with Goossens pointing out that many of its core parts didn’t necessarily require blockchain technology – it’s just that Heap saw the tech as best suited to experiment with.

“Releasing a track? We don’t need blockchain to do that. Having real-time information? We don’t need blockchain to do that. Paying with cryptocurrency? We don’t need blockchain to do that… All of the applications we’re discussing, you don’t need blockchain to make them happen. So what is blockchain good at, and what does it do?” she said.

So what? Goossens suggested three things: transparency; establishing the truth; and speed. “So it is a good tool to do real-time payments, to have transparent information about where your music is used and how much you’re paid. But let’s not forget that it’s a tool. It’s an end to a means.”

Berger: “It’s just a platform from where you can build innovative tools.”

Brook agreed that it’s important to talk about what blockchain is good at, and how that intersects with the music industry’s needs.

“One of the most powerful things about blockchain is the ability to drive collaboration and consensus in an industry where trust is at a low level. And I think that’s quite a good description of the music industry!” said Brook. She also stressed that not every blockchain startup is trying to disintermediate music rightsholders and collecting societies.

“I don’t think we would suggest that it has to drive disintermediation. A bit like the internet: there’s probably a chance that it will drive some, but that’s not our main goal,” she said, referring to possible tensions between blockchain startups and collecting societies. “We’re not trying to get rid of PROs!”

Smart contracts came up as a topic: one of the blockchain aspects that’s regularly cited as having potential for music, with revenue from streams, sales and other income automatically and instantly split between the people who need to be paid. But…

“They require good data to power them… Our business started because our founder thought you could do some powerful things with smart contracts and licensing. Well, you could, if you had good data going in to them,” said Brook, adding that this is why she thinks collecting societies do still have a role to play.

Goossens added a note of caution. “Importing the data and being able to have the good data is the number one layer, and already doing that is exceptionally difficult. Then once you have that layer ready you can start talking about smart contracts,” she said.

There’s also a problem around conflicts: for example, a dispute over how the rights to a song are split. The blockchain can’t resolve those human conflicts, although Brook suggested that blockchain startups may be able to help simply by collecting all the data, even when there are conflicts.

“Until you see the conflicts, you can’t address them,” she said. “Blockchain doesn’t inherently solve the data conflicts. There have definitely been some people historically who’ve suggested it could. It can’t… So it’s about providing an aggregate view of all the disputes and enabling people to work through their conflicts. Most of the conflicts don’t need to go to court: they’re just related to bad data and misunderstandings.”

blockchain panel shot

Mayall moved the conversation on to how some artists are working with cryptocurrencies and blockchain technology: dance star Gramatik launching an initial coin offering (ICO) with his own token, for example, or RAC, who sold his new album through a partnership with startup Ujo Music. Meanwhile Björk is working with startup Blockpool to give some of the Audiocoin cryptocurrency away to fans pre-ordering her album.

Goossens cited these as examples of blockchain as a cryptocurrency, rather than blockchain technology applied to the music industry. “This feels very much like what people did with Kickstarter, with PledgeMusic, to incentivise people. Pre-buy, invest in an artist, invest in an album,” she said.

Bowie Bonds in the early nineties!” added Brook. “Bowie securitised himself: he was essentially a security and was therefore able to take investment. He raised $20m… What Gramatik did is the digital equivalent: some hybrid of Bowie Bonds and what people have done with Patreon.”

“The interesting thing about Gramatik was he decided to allocate some of his royalties. How do you combine an ICO and the copyright element of it? That’s interesting for sure,” added Goossens.

Brook said that the noise around ICOs will continue, but that there is substance beneath the hype around them. “I really think 2018 is the year in which blockchain technology starts to really prove itself in the music industry,” she said.

“We’ve got some really exciting stuff coming up in the next month or two, but it’s not just us. The projects that engaged with the music industry actively are becoming established and credible, and 2018 is the year we’re delivering technology that can really provide benefits to the music industry.”

Berger added a sceptical note, suggesting that she gets “10 emails a day” from startups keen to access rightsholders’ data, and promising to solve the industry’s problems.

“They are explaining to me that my job is very, very bad and we are basically understanding nothing, and they are going to explain to us how to deal with data and change the music industry! But when I start a discussion with them, they don’t understand how we work. They don’t understand how the ecosystem works,” she said.

Berger also raised another concern about blockchain technology: Armonia, the royalty-processing and licensing hub that she’s CEO of, processes more than 30bn usages of music a month from digital services. Can blockchain startups (or, indeed, the technology they’re using) cope with this scale?

“Blockchain as a technology, is not capable – at least that’s what we’ve been hearing – is not capable of dealing with that amount of data at a cost that’s affordable. So there’s a question on how the blockchain is going to cope with all this data, and who’s going to pay for it,” said Goossens.

Brook said that some blockchain startups “ignore the current realities” while others are prepared to grapple with the challenge. “If you want to engage with the 50 million recordings that have been released to date, you have to engage with those current realities,” she said.

“Can blockchain handle the scale of the music industry? There’s a couple of parts to that. There’s the inherent scaling of the underlying technology [Ethereum in Jaak’s case] – it’s investing quite a lot of money to ensure the underlying network scales better… But actually for us, for music, what’s more relevant is we would never suggest that every single line of data is a transaction on the blockchain, because it doesn’t chain. Of course it doesn’t scale!… It’s true to say there are challenges, but music can be addressed by not being so silly to put every single minutia as a single transaction on the blockchain.”

The panel ended with some optimistic thoughts on blockchain’s potential, despite these challenges, with particular reference to issues of identity: knowing who wrote a song, performed on a recording of it, how those rights are split and who manages them for the various creators.

Can blockchain tech help? “I hope so. I would love it to. For me, it’s our major issue. I hope that blockchain can help us with identification of the works,” said Berger. “They are working on it. Maybe 50 startups are working on blockchain and in two years maybe only one will survive, so you don’t know, but I really hope blockchain will help us.”

“I obviously believe it will help. But I do fundamentally think that can only be done in collaboration with the music indusrtry, and existing people who provide authorrity and identity already. We can’t do it in isolation,” said Brook. Goossens agreed: “It’s not going to be sufficient by itself to solve the problem, but it’s definitely going in that direction.”

Stuart Dredge

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