Blockchain, Music & Myths

Why it's not just about bitcoin and artists should take note.
August 20 2020     by Jeff Bacon
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Introduction: The B Word

 

In the 90s I was part of the telco boom. I recall a conversation with an experienced telecoms executive about what we now call broadband but then was little more than a prototype by British Telecom named ADSL - he thought it would never see the light of day, the future wasn’t wireless.  

In 2004 I was representing a royalty calculation software company at Midem. A veteran label manager visiting our booth shared his absolute confidence that the full extent of the internet’s impact on music would be as another channel for mail order sales of physical product.  

They were both wrong. We don’t even say broadband anymore. We talk about using the internet and google maps, not TCPIP and GIS. You’re probably already tired of hearing the B word before it’s had chance to impact your life in any significant way, such is modern life! It’s fair to expect that, like the unwieldy nomenclature of tech innovations of the past, in due course 'blockchain’ may well fall out of common parlance as focus shifts on to the applications it powers.  

Thankfully we are now entering the phase of Gartner’s Hype Cycle for blockchain where the opportunists and chancers are starting to fall away. We’re a long way from the days of Long Island Ice Tea company rebranding as Long Block Corp overnight in 2017 (and subsequently folding).  

The real-world applications and the companies behind them have weathered the storm, continued to learn and develop their offerings and are now offering tangible benefits to artists and music multinationals.  

Blockchain is coming, it’s also already here.

 

Common Myths

 

 

No Significant Players in Music Are Working with It.

This is a direct result of the Peak of Inflated Expectations in the hype cycle. Lots of companies sprang up promising that blockchain would fix everything with varying degrees of understanding of what they were talking about. They raised money, blew it, the hype dies down and this informed a pervasive misconception that it was all a false dawn.  


The reality is that blockchain is foundational technology. It takes time for massive multinationals to investigate, implement and integrate which is not as newsworthy as “BLOCKCHAIN WILL SAVE THE WORLD RIGHT NOW”.  

Plenty of serious music (and for that matter non-music 82% of Fortune 500 companies explored/implementing) entities are very much involved in blockchain, you just have to look:  

 

 

It's Just For Fixing the Industry’s Metadata Problem

 

The initial excitement about blockchain coincided with the failure of the Global Repertoire Database project. The idea was to make all the copyright management and royalty collections society databases communicate with each other to enable a single point of works registration.  

Around $14m was spent and the project was abandoned. Blockchain is database technology, it can support the main aim of the GRD project, however it can’t clean up hundreds of PROs/CMOs data retroactively. Companies like Musiio and Jaaxsta exist now to help address those issues for labels.  

When we explain what blockchain is in layman's terms, we typically describe it as a database so it’s natural to assume that would be the primary application for the music business where funds are disappearing into black boxes.  

This is an oversimplification designed to help people understand the fundamentals. Blockchain is about transactions which can be interpreted in many ways. For instance, Blockpool’s Like/Share=Reward application. The transaction being that in return for sharing a Bjork video, I receive virtual currency.  

I could receive an exclusive track by visiting a specific point on a map or turning up to a concert on time or being one of the first 100 in line for tickets. That is another kind of transaction blockchain can power in the context of music, marketing and engagement.  

Connecting data to the relevant stakeholders and vice versa is just one application of blockchain technology, cryptocurrency is another application – there are probably thousands of others.  


 

BitCoin (BTC) Value Fluctuates Wildly, Therefore None of the Virtual Currencies Are Good, Reliable or Safe

 

If you follow Bitcoin as a keyword in your news stream, you will see two kinds of story, daily. Either ‘BTC to be worth $100k by 2021!!!’ and/or ‘Bitcoin loses 23% of value overnight’. The average person will not understand why either of these things might be true, it’s all a bit confusing and something for those who can afford to burn money to dabble in.  

Cryptocurrency is just an application underpinned by blockchain; BTC is just one example of it.  

There are 2,000 other coins and they serve all manner of purposes and come in many different flavours. Worried about market volatility? There are stablecoins, attached to ‘real money’ reserves. Worried about BTC’s impact on the environment? There are myriad other currencies based on different a structure radically reducing the carbon footprint.  

They often have different focuses and areas of interest. Take for instance Ripple.

Original Works and Revelator’s rights management platforms use virtual currency’s transactional nature for accounting purposes to facilitate fast transfer of royalties and rights but they in no way affect the value of those royalties and market forces do not play a role in the process.

 

Working Music Blockchain Solutions Don't Really Exist Yet

 

The fact that solutions using this technology have yet to be adopted en masse doesn’t mean that they don’t exist. While it helps to be actively involved in this area to spot the real-world solutions from the ‘blockchain ready’ entities, it’s not hard to find working examples.  

Blokur – Recently came out of beta, very cool tools for music publishers. Massive Attack demonstrated what could be done with it 2 years ago

Original Works – You can use their Artist Wallet right now to create self-custody smart contract recording/publishing agreements. Any money sent to the agreement is automatically split.  

Aurovine – Audiocoin powered streaming platform

MonkingMe – Ad based music streaming partnered with Kin to power payments and rewards for music lovers

Creative Passport – Imogen Heap’s Mycelia project coming to fruition with beta version set to be launched soon.

Unison Rights – Private PRO collecting on works by Beyonce, David Guetta, Snoop. While they’re not using blockchain to make payments yet, they do use Verifi Media’s tech for metadata management.  

 

It's Not Very Eco-friendly

 

Headlines like Bitcoin's energy consumption is as much a year as all of Ireland are great clickbait but they are just that. Fresh research suggests this idea is fundamentally flawed.  

We are also increasingly moving from ‘proof of work’ to ‘proof of stake’ blockchain which requires a fraction of the energy.  

Not to mention there are lots of specifically eco-friendly coins .

 

Summary

 

As suggested in the introduction, blockchain will become a part of your life without you really realising it. Arla Foods recently introduced the first milk product with its entire production process recorded on the blockchain. It still tastes like milk (‘transparent milk’ being metaphorical, not a weird lactosey crystal Cola product) but now they have more granular control over quality. So, it will probably taste like nice milk (if you’re into that sort of thing) more often. Supply chain transparency can help ensure your clothes were ethically produced, that your coffee is fair trade and the farmers are properly compensated.

As artists and labels, in fairly short to medium term, you can expect to be able to take advantage of faster royalty payments, royalty advances, micro-lending and releasing equity in your catalogue or future releases. New ways to engage and reward fans for taking the journey with you; better tour planning; more intelligent release campaigns.  

Family in Music is committed to creating a framework for creators to access innovations like these, so you can focus on your art and do better business into the bargain.

 

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Author
Jeff Bacon
Jeff has an extensive history at the leading edge of music and technology innovation. From digital distribution, rights and royalties and sync to analytics, social media and production tools, he is driven by a desire to help music and musicians to do better business by leveraging the right models and solutions to deliver tangible benefits for creators.