Chapter 1: The Future of Derivative Works

The Open Music Initiative is a non-profit initative creating an open-source protocol for the uniform identification of music rights holders and creators. On June 5th, 2017 the Open Music Initiative Summer Lab kicked off it’s second ever summer lab. Led by Eric Chan, four groups were assigned to tackle various problems and tasks within the music industry through IDEO’s process of Human-Centered Design. These tasks included Cataloging, attributing, and distributing live DJ mixes, compensating musicians for visual works using their songs as data, identifying individuals for their contribution to single tracks in new works, and our own problem of Commercializing mixtapes built from original material and back catalogs.

Luis Arcos, Soma Suzuki, myself, Yi Pan, and Xueqi Zhang assembled together as a team. We chose to focus on current licensing, copyright, and the commercialization of music. Though many questions came up in thinking about this, our team chose to tackle these two important questions:

  • Can the licensing and distribution process of an original work be just as enjoyable as the music itself?
  • In the future of derivative music works, can commericialization be monetized for all creators of the derivative work?
Photo Credit: Clem Onojegh | Unsplash

To get started on answering these questions, our team did some in depth research through assessing the user experience, conducting interviews, and searching online:

Interview: George Howard

We were given the opportunity to have George Howard as a mentor to the OMI Lab. George Howard is a renowned music business and management professor at Berklee College Of Music. He founded the company, Tune Core. He managed Grammy award-winning artist Carly Simon. He also wrote various books on the music industry, including An Insider’s Guide to the Record Industry and Music Publishing 101. Howard is an expert on copyright law, commercialization, and distribution. Here is what we learned:

  • The right to a song is ownership of the song.
  • There are two types of information about a piece of music that are critically important: Who made it and who owns the rights to it?
  • The recording of a song is usually owned by the label. The song itself is owned by the writer or writers. If the artist is independent, they own both rights.
  • In the new model of song distribution, we no longer need the record label. With digital streaming with companies such as iTunes, Spotify, Pandora and YouTube, music distribution has become easily accessible but NOT as profitable.
  • No other artist can reproduce a commercialized released song, or use any part of the song in their own work without paying Mechanical Royalty. The rate of mechanical royalty is set by the local government, and NOT the right owners to the songs. It is a flat fee in the U.S. is $0.091 cents per reproduction, download, or stream. (I know what you’re thinking. How does that make sense?! Why does the government have control if they wern’t even a part of the making of the song?)
  • In derivative works, to obtain Mechanical Royalty, you must gain permission of the holders of the rights to a song. This was made easier through a company called the Harry Fox Agency. This Agency has set up a website called Song File, where you can “easily” obtain the mechanical license to virtually any song through a series of steps.

SongFile Journey

After our interview with George, we decided to go through the process called an empathy excercise and try to obtain a mechanical license ourselves. Our team went onto Song File, and mapped out exactly what information was needed to license a song and more importantly what the user experiences and feels throughout the process. The user needs to go through 10 pages of digital forms. Here is a chart that shows all of the information that SongFile aquires from the user, if I want to legally license a song to sample or cover:

Here are some of the problems we saw with the current music licensing system:

  • The process takes an extensive amount of time. One of the most valuable assets to a musician is time. The user needs to go through 10 pages of digital forms that includes required 32 questions: multiple choice, paragraphs, drop down menus, and descriptions. This honestly is a lot just to put out one cover song.
  • Many of the questions are irrelevant. For example, the form asked the user how many streams they were expected to recieve within a year. How in the world am I expected to answer to this, if I haven’t released the song cover or video yet?
  • Some Questions were hard to understand. Without a proper background in law, the questions referenced long licensing contracts and rules, which to put in simple terms, made me have many “wtf is happening” moments?
  • No central database exists to track the rights or information to music. At the very end of the process the user has to pay a $3.00 mechanical royalty fee, which is expected under copyright law. Following this, was a $16.00 processing fee. In an attempt to figure out why we have to pay a $16.00 processing fee, we uncovered that this was used to pay a worker to input your licensing data into a platform cocktail. This data is then trapped in proprietary databases, spreadsheets, email inboxes and long form contracts owned by separate organizations.
This process is just for covering a song. If the user wanted to do sampling or mixing of a musical work, the process becomes even more complicated.

Considering all of these aspects, I can finally see why people don’t obtain the rights to music, why million dollar lawsuits are filed for artists stealing songs, and why covers are often taken down off of streaming websites. Nobody wants to go through the process of obtaining rights to music, because it is a waste of time. It is irrelevant to the task at hand. The database is convoluted and confusing. The payment structure doesn’t align with the goals of a musician. This process is just for covering a song. If the user wanted to do sampling or mixing of a musical work, the process becomes even more complicated.

Moving Forward

There are many aspects to look at in licensing, copyright, and commercialization in music. The process can get very complicated. Moving forward, the team is going to try to simplify the process, and make it easier for the user to use and understand.

Possible technical backends to use and collaborations include:

  • Blockchain
  • Ethereum
  • Bitcoin
  • The OMI API
  • Intel’s Sawtooth Lake API
  • Creator ID

We, all are so excited and grateful for this opportunity to improve this aspect of the music industry. We will keep you informed and updated on our progress and our future ventures. We can’t wait to share our journey with you and provide hope for the future of the music industry. If you have any ideas or suggestions, please feel free to reach out to us.

Markus Spiske | Unsplash