Shared data can transform the music industry

Imagine if five-time Grammy winner Billie Eilish and her co-songwriter and producer brother FINNEAS wrote their Grammy-winning song of the year, “Bad Guy,” but forgot to register the copyright. Surprisingly enough, they would still have copyright protection and the right to claim royalties and license fees for use of their works around the world.

This right was established in the Berne Convention, an international agreement governing copyright of literary and artistic works first introduced in 1886. The 1886 mandate intended to remove administrative and financial burdens on authors, affording them legal rights as owner of intellectual property from the moment of creation. However, the net effect has been the opposite, placing the burden on copyright users who have nowhere to turn for ownership information when trying to properly license and pay that author for the use of songs (and other content).

Now, after a “decade of destruction” during the difficult shift to digital music, U.S. music companies experienced a fourth year of double-digit growth in 2019, as on-demand streaming services such as Spotify and Apple Music, continued to increase paid subscriptions and expand international reach. The Recording Industry Association of America (RIAA), a trade organization representing members that comprise 85% of the legitimate recorded music produced and sold in the U.S., reported that 80% of the $11.1 billion in revenues last year was from streaming, and the music industry’s transformation to “digital-first” is functionally complete.

However, this “digital-first” boom has fueled a colossal volume of daily new releases and trillions of streams resulting in increased complexity and a tangled web of royalty structures, rates that differ per territory, and multiple rights owners of songs and assets. Data has become king. The continuous changes and transfer of ownership have made the tracking, collection, and management of data more important than ever.

This mismatch and inaccuracy of data is a consistent problem across the digital supply chain, where silos of information impact the bottom line for the entire ecosystem. Just managing your own data isn’t enough. Owners and users need to be able to synchronize data in multi-party environments that work like streaming at the speed of digital.

With the fundamental belief that the sharing of dynamic media data results in better data and business decisions, I co-founded Verifi Media in 2016 with Ken Umezaki, Bill Wilson, and Chris Tse to provide solutions to the music industry’s biggest problems. We’ve learned a lot with various partners and experiments and cracked the code by reinventing the process of registering, tracking, and managing the metadata associated with new and existing music products and assets. Our solution is customizable and proven to significantly increase data quality and transparency, and synchronize stakeholders with more accurate ownership and rights information.

The first to offer our new production product, anchored by blockchain and machine learning, is FUGA, the progressive, industry-leading global music distributor owned by Downtown Music. FUGA clients and third-party services have the ability and opportunity to immutably register their songs through our layered stack, enabling copyright owners and users to more effectively connect the dots between their works.

When metadata is entered at the point of distribution, the system registers it on a blockchain, allowing for historical changes to be tracked over time. The data is seamlessly integrated with digital service providers that support DDEX standards, as well as shared across the supply chain to those with permission to view, add input, or make changes. The system intelligently cross-checks information, matches data, and normalizes and cleanses incomplete and incorrect data. Using AI and proprietary data scoring, it also forms multi-party consensus and a single source of truth that is synchronized with stakeholders.

The opportunity for transformation into an even bigger, dynamic data-based, digital industry is within reach. Those who join us will quickly enter an impending era of efficiency and transparency in the music industry. Companies and organizations that are slow to adopt this decentralized approach will risk a long game of catch-up, lower margins, and higher operational costs that can trickle down to also impact every creator who is due a royalty from a song. But by working together, sharing data, and embracing a blockchain-based future, we can provide an on-ramp to an impending era of efficiency and transparency that will ultimately benefit everyone.