With {good|great|excellent} {reason|factor}, one {could|might|can} call the {current|present|existing} state of the {music|songs} {business|company|service|organisation} "{managed|handled|took care of} {chaos|mayhem|turmoil|disorder}" where its {players|gamers} {record|document} {labels|tags} {and|as well as|and also} {publishers|authors} {benefit from|take advantage of|gain from} it. It takes months {and|as well as|and also} years to {pay out|pay} {royalties|nobilities|aristocracies} to {artists|musicians} {and|as well as|and also} {composers|authors}.

1. Managed Chaos: Why the Music Industry Needs Blockchain
teamsteverhyner.com/managed-chaos-why-the-music-industry-needs-blockchain/
The music industry has lived through several so-called revolutions when either the “video killed the radio star” or
MP3 killed the record sales or Spotify disrupted the way we consumed music, and so on. However, rather
paradoxically the industry has never changed that essentially, at its core which is its relationship with artists
contracts, payments, licensing and copyrights.
With good reason, one could call the current state of the music business “managed chaos” where its players record
labels and publishers benefit from it. It takes months and years to pay out royalties to artists and composers.
Imogen Heap, artist and Founder of Mycelia for Music, an early adopter of Blockchain, says at the SLUSH
conference in Helsinki:
“This is the current state of affairs in the United Kingdom. This is how the money gets down to me as
an artist – I’m right at the end of the chain. I am the first person to upload the song and the last
person to receive the money. And often it takes up to two years for that to happen.”
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2. Music is one of the most complicated copyright environments with one of the worst data practices. Labels have
typically failed to develop comprehensive contracts and keep proper records for the artists they sign leaving data
entry to interns or IT departments. Of course, there are thousands of Rights Organizations globally that are
supposed to help coordinate music licensing but who will help coordinate the Rights Organizations themselves? For
example, it took GEMA, that represents German rights holders, seven years to re-license music on YouTube.
“There have been many historical attempts at doing music rights,” explains Marko Ahtisaari, Founder of Sync
Project. “Typically they have failed because there has been a misalignment of incentives – large players in the
industry didn’t want to provide access to this data.”
“At the moment you have this extremely complex system for collection of money and data around the world,”
continues Heap. “I’m very excited about the potential of Blockchain and what it is doing for the industry, kind of
catalyzing us into thinking of reshaping it, making it a more flexible, sustainable, cleaner system. A person would
have a digital wallet ID. There would be no need for any banks if it was on the Blockchain.”
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3. All eyes on Blockchain
Blockchain technology represents a decentralized ledger where you can record transactions and monitor the
changes associated with transactions over time. It would make a perfect foundation for music rights management.
Ken Umezaki, Founder of Digital Daruma and Co-founder of Dot Blockchain music, calls the music industry “a data
business of micropayment collection” which needs to have an architecture that can support that in a very efficient
way. He thinks there is tremendous opportunity in the Blockchain to create that operational efficiency.
Umezaki opines:
“If the industry agrees to cooperate and create an interoperable environment where the core
business values can be maintained but we all get the benefit having a collective data set from which
to work on, publishers would have to stop worrying about collecting micropayments through
spreadsheets and focus on what they love to do which is to promote their music or work with the
songwriters to make them better.”
Currently, the information related to music compositions and songs is located in over 5000 individual publisher-
owned databases. It is certainly not an efficient system. Ahtisaari believes that the Blockchain could help create a
place where the information would have a trustful degree of privacy governed according to certain rules and
principles. Then everyone would benefit from the entire infrastructure being hosted.
“By using a system which no one owns or controls but everyone takes care of, which is what the distributed ledger is
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4. about, we hope we can address this problem,” says Ahtisaari. “The world is turning to streaming entirely. In a
significant amount of cases, the streaming service cannot pay because it’s unknown who to pay. There is no easily
accessible rights registry.”
For this particular reason, the Open Music Initiative, which Ahtisaari is part of, was brought together essentially by
academic institutions starting with Berklee College of Music and Berklee Institute for Creative Entrepreneurship.
They approached him along with several other academic institutions to host a group of companies that would
commit to bringing about a new kind of music rights registry using the distributed ledger technology. There are well
over a hundred companies that signed up, including all the major labels, all the major streaming services with the
exception of Apple and significant publishers.
“That’s the idea – to bring together and do a reference implementation showing that this can interconnect but still
leave a lot of room for companies to build businesses on top,” says Ahtisaari. “That’s a handwave dream picture. Of
course, it is a very contested area so it takes a long time. Right now we are doing the minimal viable first step. It’s
like an open-source project.”
Turo Pekari, Senior Advisor, Innovation & Discovery at Teosto, agrees that collective management societies have a
crucial role in building applications based on Blockchain because the data is the most important thing and you can’t
make anything without it.
Pekari points out:
“Blockchain solutions could provide new growth for the traditional music players. The Blockchain is
not going to disrupt the whole existing industry. You can see what has been happening in the financial
industry and the Blockchain, the biggest players are making an investment in the technology now.
That’s what is probably going to happen in the music industry too. There are ideological goals as well
like openness and transparency.”
He sees the role of Teosto in data governance and data validation in future Blockchain implementations, as well as
in providing a licensing platform for some writers and possibly in competing with commercial players in that way.
However, Pekari is rather skeptical about the quality of data that would get to the Blockchain. “The quality of music
reporting data is something that Blockchain cannot solve,” he underlines. “If we get crappy data, it is going to be
crappy in the Blockchain too. A wise thing to do would be a trial implementation in some licensing area where we
know that it can actually work.”
So, what should be done first?
The explosion of data has created a massive challenge for the industry as well as massive opportunity. There has
never been so much data before in the music industry. And now everything is a digital transaction and can be
measured meaning that people can get better and faster access to the information.
Bruno Guez, Founder of Revelator, suggests that the best thing about the Blockchain is a possibility to create a
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5. more efficient marketplace and faster payments.
He says at SLUSH conference:
“Focusing on the registry of digital assets is the first important step. Having a better transaction chain
for transactions that are associated with digital assets. We are already making use of smart contracts
to create a more executable transaction around payments and loyalty distribution. We are not going
to focus on core infrastructure or identity just yet or payments just yet. Registry and smart contracts
are our interest.”
As it usually goes, the challenge is to get everybody to agree to some format standards around metadata, around
smart contracts and payments processes. Every company has their own databases and processes in place. Getting
everybody to agree on one format is a huge challenge.
“90 percent of the problem is people in the industry, the adoption issue, and 10 percent is a technology issue,”
agrees Ahtisaari. “The technology issue could be leveraged, we just need to collectively agree on the standards.
There is some sort of data transaction limitations to the Blockchain that we need to think about. We need to make
sure that the scale supports the full number of uses.”
According to Ahtisaari, the first thing that needs to be worked on is the fundamental infrastructure, scaling
transactions and this is pretty well-documented in the Bitcoin case which is good. But the key here is that the
innovation and experimentation are so fast at the moment that it is a little bit ahead of its skis because there is
money involved.
“One thing that makes me hopeful is that there is a system that we can rely on,” he says. “I’m encouraged by the
speed of innovation.”
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6. On these platforms, you can create crypto tokens for particular parts of the applications or the platform so there is a
way to crowdsource and finance allowing for new business models to be created. To figure them out is the hurdle
right now.
Ahtisaari concludes:
“The music industry is a tiny business globally and it hasn’t grown collectively in the last 10 to 15
years. We must bring efficiency in payments to creators. We need to work on that so that new areas
have potential to grow. We will find new applications for music and technology. We hope to have the
music rights taken care of.”
Projects already applying Blockchain to music
Having a better foundation for monitoring the activities related to
digital platforms is of tremendous value for the music industry indeed.
However, Blockchain is still a work in progress.
There is a number of music specific applications of Blockchain, with
major ones being introduced by such companies and projects like
Dot Blockchain music, Ujo music, Media chain, Chainvine, Revelator
and Dubset media.
Dot Blockchain music is a startup focused on the establishment of the
industry standards and development of such a media format that
would benefit musicians, composers, generally all people related to
the music through open source protocol and licenses and leveraging Blockchain technology methods. As the end
result, Benji Rodgers and his team seek to create a fair and transparent way for music artists, music publishers and
rights holders to express their wishes for commercializing their art.
Rodgers says in an interview:
“The Blockchain isn’t about a single company finding a fix. It’s about the key players getting tighter
behind a foundation. The solution we are seeking is closer to how ICANN, the privately run but non-
profit organization that manages internet domains and addresses, works than it is to a Silicon Valley
or London start-up. A shift like this is akin to getting the world to move to the metric system, which
isn’t going to be achieved by a Steve Jobs-like figure who will magically solve this problem and build
a new system overnight. This is about laying the bricks, mortar and plumbing of a new music
industry.”
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7. Ujo music is building a system designed to address major problems of global royalty distribution and licensing. Ujo
proposed a new shared infrastructure for the creative industries that aims to return more value to content creators
and their customers. Ujo’s model focuses on creating an open-source rights database and payment infrastructure in
hopes of revolutionizing how money is distributed to artists and rights holders.
Dubset Media Holdings is a technology solutions company that offers an innovative music marketplace for DJs,
artists, labels, publishers, music services, and distributors. Through a cutting edge technology rights management
database and easy to use dashboards, Dubset is creating new mix and remix distribution allowing monetization
opportunities to be built on transparency, ownership control, and simplicity. It’s leveraging Blockchain for
components of the services they are providing.
Mediachain is an open universal media library based on a protocol for registering, identifying, and tracking creative
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8. works online. It allows participants to retain control over their data while broadening their reach using a
decentralized architecture.
Chainvine is a Blockchain service which aims to provide secure digital management for assets and identity. They
claim to have developed a unique enabler for the use of the Blockchain and Blockchain-based technologies
engaging with both the public and the private sector.
Revelator serves as a platform for artists, labels and distributors to track their assets, rights and data. It was founded
in 2013 by music veteran Bruno Guez and launched in Israel. Backed by a team of seasoned music industry and
software development professionals, Revelator is a provider of business marketing solutions for music professionals
which seek to solve music business challenges integrating sales, marketing, accounting and analytics into one
unified system to provide unprecedented transparency, simplicity and efficiency for both independent artists and
record labels.
Re-posted from www.cointelegraph.com by Margarita Khartanovich January 24, 2017
Blockchain is the basis for Bitcoin and hundreds if not thousands of uses are being developed. You can
become involved in mining your own Bitcoin. Just click here for more information.
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9. Steven L. Rhyner
Thank you for reading my posts! If you would like to connect, reach out to me on
Facebook.
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