Tuesday, December 1, 2015

Transparency issues in the music industry could be solved by blockchain technology

Written by B Holmes — It is an experimental time for the music industry. People are listening to more music than ever before, with the ability to stream and download practically any and every song online. This easy access to popular artists does, however, come at a price.

Spotify was put under the microscope in 2014 when pop-artist Taylor Swift pulled every one of her songs from the platform, due to the royalties. Spotify currently claims an average “per stream” payout to rights holders of between $0.006 and $0.0084. Singer and songwriter Adele is reportedly taking this one step further, excluding her newest album “25” from a wide range of streaming services.

Bono chimed joined the conversation in a Rolling Stone Article. Spotify is not the enemy, he states, pointing to the legacy standards and practices in the music-industry. “Spotify are giving up 70 percent of all their revenues to rights owners, it's just that people don't know where the money is because the record labels haven't been transparent."

The lead singer of U2, and venture capitalist, explained that the music business has historically been involved in a considerable amount of deceit. “But if we change that a bit, and people can actually see how many times [songs are] being played, where they're being played, get access to information on the people who are listening to them, get paid direct debit.... I think those payments will add up to something, as the world gets more transparent.”

According to Bruno Guez, Revelator CEO, the only way to clean up this mess is via the data. “The catch is, no one seems to have the proper access. Artists depend on labels for their statistics. Many labels are still managing their data the old-fashioned way—with Excel.” Revelator is a cloud-based provider of sales and marketing tools for independent music businesses.

“Compiling reports and insights is an arduous, time-consuming, and complex process. They have to consolidate data from multiple sources, including both digital and physical stores. As a result, most labels only manage to send out reports two-to-four times a year. They simply have no other means to assemble and share data on a daily, weekly, or even monthly basis.”

- Bruno Guez, Revelator Founder and CEO
Guez states that an artist’s career can suffer tremendously from this archaic system. “By the time they get their reports, the information is often outdated. Their next album has already been released, and now they know which songs on the previous album were most popular with which fans. It’s extremely frustrating. And it’s bad for business.”

Using immutable public ledgers, known as blockchains, smart contracts will be able to execute real time solutions for the transparent distribution of royalties. In August this year, Revelator partnered with Colu, which provides a Bitcoin blockchain technology platform, with tools for accessing digital assets.

The two companies are working together on a Rights Management API, which will apply transparency to the digital distribution of music, displaying both the rights of ownership and the usage. “This will provide the secure issuance and distribution of digital assets, including listing and registration of musical works for its clients and helping collecting societies provide more transparency and efficiency to all market participants,” states the Colu documentation.

“Our mission is to bring transparency to the industry, so that all players—from artists to managers to labels—have easy, quick and shareable access to data.”

- Guez
Colu’s platform is designed to be used by both developers and consumers, with little knowledge of blockchain technology. In addition to aiding the music industry, the platform can be used to build and exchange digital assets “for everything,” states Colu. “From financial industry (shares, bonds, stocks), records (certificates, copyrights, documentation) to ownership (event tickets, vouchers, gift cards).”

The Colu platform uses Coloured Coins, which is an open source protocol that builds on Bitcoin’s blockchain functionality. Various metadata can be attached to Bitcoin transactions, or “coloured,” to represent assets.

Music industry professionals are supporting the advanced technology, and emerging partnerships. According to a press release, songwriter, recording artist, and author of “Bitcoin For Rockstars,” D.A. Wallach, said that the Colu and Revelator partnership could be a big step forward for the music industry.

“I am thrilled that such capable entrepreneurs are chipping away at the vexing lack of transparency that makes it so hard for artists today to understand their sources of income. There is great opportunity for this approach to evolve into an industry-wide standard.”

- D.A. Wallach
Imogen Heap is also a vocal proponent of blockchain technology, she will be speaking at the upcoming Disrupt London conference in December.

The artist told IBTimes, that she has read about Revelator and its mission, and believes it fills a lot of the gaps, by “connecting dots and enabling the artist/songwriter/musician/record label/publisher to have a lot more info at their fingertips.”

Heap has been working on her own blockchain based project, called Mycelia. After outlining the project online, she was approached by multiple technology companies who wanted to work with her. Phil Barry, who founded the platform Ujo earlier this year, was able to persuade Heap to work with his team.

“Grammy and Ivor Novello award-winning artist Imogen Heap has agreed to let us loose on her new song Tiny Human so that we can demonstrate how our shared goal of a more transparent music industry can be achieved using the blockchain.”

- Ujo
Ujo uses the Ethereum blockchain to allow stakeholders to record their ownership rights, and publish policies on how their music can be used, along with the price. Much like Revelator and Colu, Ujo is able to create smart contracts that automatically send payments to rights holders, while increasing transparency.

In order to purchase Heap’s new single via Ujo, the user is required to have a digital wallet and purchase Ether, the digital currency used by Ujo, and the fuel of Ethereum’s blockchain.

“Our prototype is a complete, self-contained song ecosystem. You can explore the Tiny Human network, examine the policies associated with the track, see how payments are automatically distributed to the different contributors to the song and – if you have the cryptocurrency Ether – buy a download of the song and have your transaction recorded permanently on the blockchain.”

- Ujo
The next phase in the platforms development is introducing other payment methods, such as credit cards.

Another project waiting in the wings is being created by Rupert Hine, who previously worked with Imogen Heap. Hine joined forces with Alan Graham to create the One Click Licence (OCL) platform, which also uses blockchain technology. The website describes the project as being a “technological and philosophical bridge for building connections between technology platforms, rights owners, and citizens.”

“Combining the best solutions from both centralized and decentralized systems (including harnessing some of the untapped potential of the blockchain), OCL has engineered a composite set of solutions that doesn't so much disrupt as it helps everyone evolve.”

- One Click Licence
This platform is more focused on providing an application which allows multiple types of content to be tracked and monetised through micropayments.

OCL explains that one of their first “front-facing technologies” is a micro licensing engine, which will be able to solve issues around user-generated content. “It ensures rights owners have remuneration and a sense of control over their creative works,” states the projects documentation.

“OCL's technology assures virtually no infringement or takedowns, while ensuring that every use of media can be paid for in a near-frictionless (often invisible) environment.”

- One Click Licence
This approach allows the company to work with existing legacy systems such as Spotify or Snapchat, instead of creating a new system from scratch. “If you ‘disrupt’ the music industry again...it will likely not recover, which means you throw away the good with the bad. We need a balanced approach or what we'll find is a lot of obstruction from all sides...and at the end of the day a creative class with no real working solutions,” said Graham.

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