The Future of Digital Rights in the Music Business

The digital music industry consists of a complex web of intermediaries that connect content creators and content consumers in the music supply chain. Record Labels, Distributors, Publishers, Performance Rights Organizations act as inefficient pipelines devaluing the actual content being created in the supply process. This prevents content providers from developing financially sustainable business models and content creators from being fairly compensated for the use of their creative works.

A metric showing how many plays an artist needs to earn minimum wage Courtesy: informationisbeautiful.net

This article concentrates on the role of Digital Rights Managers, i.e. Publishers and Performance Rights Organizations when it comes to the flow of royalties from the consumers to the creators.

What are PROs? Performance Rights Organizations or Performance Rights Societies (eg: ASCAP, BMI, SESAC etc.) are intermediaries that collect royalties on behalf of publishers and songwriters when their work is used commercially.

What PROs like to believe is that they keep a watch on any infringement of rights and make sure that the rights holders are paid whenever their right is being exploited for commercial purposes. This made sense in the past since most of the music being distributed was in the physical format, but their relevance needs to be scrutinized in an industry where the majority of music being consumed is through digital media.

Additionally, content providers have enough technological prowess to establish reasonable measures to prevent this from happening. We see this especially in platforms that allow User Generated Content (UGC) such as YouTube or SoundCloud.

YouTube has efficiently deployed algorithmic measures to detect if any pornographic content is being uploaded on their service, but when it comes to illegitimate music, the screening process seems to be too tedious for the tech giant, and when they came under fire from the music industry for the prevalence of illegitimate content uploaded on their service, they were quick to cite the safe harbor provisions that Section 512 of the Digital Millennium Copyrights Act 1998 (DMCA) has empowered them with.

In 2012, the Indian Copyrights Act 1957 was amended to conform with the guidelines set out in the World Intellectual Property Organization’s Copyright Treaty (WCT) with respect to Digital Rights Management. (DRM) to tackle the growing menace of piracy in developing countries.

Section 65A: was inserted which empowered intermediaries to set up technological protection measures (TPMs) to make sure that no infringement of rights is taking place on their platform. It also criminalizes attempts to circumvent such established measures. However, when it comes to music, platforms that allow user generated content have been extremely lax as most of the traffic that drives their ad revenues comes from users who access content that is not legally uploaded. YouTube has been severely criticized for inducing the “value gap” which essentially means that fair revenue is not being generated for creators of content in the music industry. The International Federation of the Phonographic Industry’s Global Music Report 2018 states that the value gap is the music industry’s top legislative priority.

Section 65B: lays down provisions that criminalizes the act of making changes in the Rights Management Information of a particular piece of content. Currently, its very easy for a pirate to change the metadata of a particular file and distribute it illegally. Blockchain promises to solve this problem, by essentially establishing a decentralized server where all of recorded music’s metadata is stored and any update or modification made to it to it will notify the legitimate rights holders in real time, so that they can be fairly compensated. Different challenges arise at this point, since there is no standardized format for the documentation of metadata. Benji Rogers and his team at Dot BlockChain Media plan to change this by introducing a standard format for the documentation of all metadata.

I see a future where digital music providers, primarily lead by streaming services act as independent intermediaries establishing direct connections between rights holders and consumers. There will be no need for digital rights managers like Publishers and Performance Rights Organizations and hence creative content won’t be devalued in the process. Technology has changed the way we interact with music, and interesting developments lie ahead, however their efficacy depends on the legislative mechanisms we establish to deal with them.