Block ’n’ roll: 3 ways blockchain is building the music industry of the future
2018 is the year of blockchain: the fledgling technology promises transformation across all industries, from healthcare to finance. This week alone, new blockchain projects have been announced by companies as diverse as Google, Starbucks and the Bank of England.
For the music and media industries, the transparent and immutable nature of the blockchain means that it can revolutionise the storage and distribution of content: whether that’s the media itself, the rights and IP around that media, or the access and payments associated with it.
Here we’ll take a whistle-stop tour around some of the ways that blockchain may be used to revolutionise the music industry, and some of the players in this space (full disclosure: including us!).
1.Distributed rights, royalties & micro-payments
With cryptocurrencies such as Bitcoin currently the best-known applications of blockchain technology, it’s no surprise that a lot of the early forays into blockchain for the music industry hinged upon payments and streaming media. Ujo’s Tiny Human prototype with Grammy-award winning songwriter Imogen Heap (also known for, amongst other things, wearing a live twitter-deck dress on the red carpet), was one early experiment in this space, but one that got off to a bumpy start. The current lack of scalability of blockchain makes it difficult to envisage media actually being streamed direct from the chain (a sort of “Spotify for the blockchain”), as the amount of transactions required render the technology unfit for purpose.
With its Creators Portal, Ujo has now turned its attention instead to what it sees as a wider challenge in the industry: music rights and metadata. UK-based start-up JAAK, too, initially started out as an attempt to create streaming media on the blockchain, but is now also looking at rights and royalties.
There have been several pre-blockchain attempts at addressing the sprawling metadata mess that is the music industry’s rights and royalties landscape, with the most well-publicised failure being the Global Repertoire Database. Blockchain has the potential to finally solve this long-standing and thorny problem. By storing one “single source of truth” of rights information on the blockchain, where information can be synchronised, tracked and shared in real-time, this can then be pointed to as an immutable proof of ownership for rights-holders.
Imogen Heap’s ambitious Mycelia project aims to eventually combine media, rights (including stem metadata and creative contributors), and artist information (such as biography, tour dates, affiliated organisations and social media) to enable a “Semantic Web of linked media, artist profiles and other metadata”.
Even more excitingly, blockchain also provides the means to take an even more granular approach to music rights, by attributing royalties at the stem level (multi-track recordings are made up of constituent individual tracks, known as stems). This means that contribution by creative collaborators, producers and session musicians could all be tracked granularly, with rights and micro-payments assigned accordingly.
Some start-ups are exploring creating new, blockchain-friendly music formats which enable this granular attribution, with perhaps the best-known at present being dotBlockchain Music.
“The challenge that I have with that is that they create this wonderful way of paying people, all the rails are there; the problem is that the end result of it is an mp3 or WAV file which I can take into my computer and delete all of the information about the work, claim it as my own, and upload it anywhere I want. There’s no restriction on keeping the metadata persistent,” said CEO Benji Rogers in an interview with MIDEM, “What we’ve proposed with dotBlockchain Music is the use of the blockchain in conjunction with a new format that fixes the problems, because basically the format writes to the blockchain.”
It’s a big ask, but blockchain is a technology with big potential; and it’s no coincidence that Spotify recently purchased MediaChain Labs, a blockchain-based start-up looking at tackling attribution of musical rights.
2. Fan engagement
Never a stranger to the more experimental things in life, Bjork bundled purchases of her latest album, Utopia, with a cryptocurrency offering of 100 Audiocoins. Fans were also given the opportunity to earn “bounties” of extra Audiocoins by interacting with Bjork’s content online, sharing links, and attending shows.
Groups such as UK-based start-up Blockpool, founded by musician and producer Kevin Bacon, specialise in offering “digital currency initiatives” to fans which reward them for championing and promoting an artist’s work. Rewards may take the form of cryptocurrency (such as Audiocoin, Bitcoin or Ether), or “real world” experiences. In an interview with Music:ally last year, Bacon said that “You could create blockchain-enabled digital treasure hunts…why not reward your fans for engaging with what you do, and reward them in a meaningful way?” said Bacon.
Last year Gramatik became the first artist to “tokenise” himself, releasing his own token GRMTK in partnership with entertainment tech studio SingularDTV and raising over $2m in 24 hours. A logical next step from crowd-sourcing sites like Kickstarter, fans who invest in the token are then given opportunities to share in the revenue from Gramatik’s future work.
3. Ticketing transactions
Compared to the minefield of media metadata, envisaging a blockchain for the ticketing supply-chain begins to look like a much more achievable prospect. The ticketing industry has its own set of challenges; most of which, like other music industry challenges, have been predicated by the rise of the internet (anyone remember Napster…?). Counterfeit ticket, touts bulk buying using bots and other unethical behaviours have all contributed to a loss of consumer confidence. A growing number of countries are attempting to counteract this by increasing regulations; the past month alone has seen moves by the Advertising Standards Agency in the UK, The Commerce Commission in New Zealand, and the Italian Competition Authority in Italy to clamp down upon shady activity on secondary ticketing sites.
An alternative to increasing regulation is to create technological solutions which shape more productive market behaviour. “To counter these problematic behaviours, we use the blockchain’s immutable provenance of tickets and transparent audit trails to prevent counterfeiting,” explains Annika Monari, co-founder of the Aventus Protocol Foundation; a not-for-profit ticketing blockchain start-up. “To eradicate the practice of bulk purchasing tickets using bots, we use the digital scarcity enabled by blockchain to alter the economic incentives of touts who use bot software.”
Storing and distributing tickets via the blockchain not only provides security and transparency; it also means that rights-holders and associated entities can set initial conditions of both primary and secondary sale (such as minimum and maximum price caps), increasing control over the secondary market.
The first release of the Aventus Protocol will be available in mid-April, giving developers the tools to begin directly interacting with and building upon the protocol. Here at Artos we’re looking forward to working closely with both the developer community and the ticketing industry, providing the infrastructure and expertise that will help make user-centric ticketing apps built upon the Aventus Protocol into a reality.
