Blockchain technology has arisen as a way to bring secure, reliable, and scalable distributed transaction processing to music licensing. Significant investment and technical talent have entered the music industry
through blockchain technology. Blockchain technology replaces monolithic central systems with an approach based on interoperability among existing databases and distributed transactions.
Here are some companies which are already using blockchain in the music industry.
Ujo Music (ujomusic.com) is a project of ConsenSys, a startup incubator focused on the Ethereum blockchain, which supports a technology called smart contracts. A smart contract is a protocol that ensures that participants in a blockchain adhere to machine-readable rules, such as — in this case –license terms for content. Ujo Music built a prototype for the innovative British singer/songwriter Imogen Heap. The system makes it possible to license Heap’s song “Tiny Human” on different terms: as a permanent download, a stream, stems (individual tracks, for remixing), or for sync rights With the Ujo Music “Tiny Human” prototype, it’s possible to purchase permanent download rights (as a consumer would do), but it’s also possible to acquire the right to sell downloads of the song (as a DSP would do) and return a percentage of the purchase price to the copyright holder.
Core Rights (corerights.com) is an example of an application that handles pure B2B blockchain-licensed music transactions. Core Rights is building a marketplace for licensing of music by venues, such as bars, restaurants, and retail stores, which pay performance royalties for music they play on their audio systems. Venues choose the music they want to play and take licenses to it; each license is represented as a smart contract with the rights holder on a blockchain. Core Rights is currently working with the Canadian PROs SOCAN (for compositions) and Re:Sound (for sound recordings) to build the first implementation of its marketplace in Canada.
dotBlockchain Music Project
The dotBlockchain Music Project (dotblockchainmusic.com) is a public benefit corporation 26 which is creating open-source technology to support a new file format for music called .bc (dotBlockchain), which will contain digital audio along with metadata that points to entries in blockchains denoting music rights transactions. dotBlockchain started out using the Bitcoin blockchain, but it is currently blockchain-agnostic. The technology includes protocols and interfaces to record and read transactions on .bc files on the blockchain. dotBlockchain is based on the core concept of Minimum Viable Data (MVD). Instead of trying to create a large database schema that contains every piece of information that anyone would want to know about a musical work, it contains only just enough data to disambiguate the work and identify rights holders.
Open Music Initiative
Finally, the Open Music Initiative (OMI) is a new standards initiative that arose out of the Berklee College of Music’s Rethink Music initiative and now also involves the MIT Media Lab, the design company IDEO, and the blockchain platform technology startup Context Labs. OMI is creating protocols for interoperability among existing databases, standards, and tools that will store transactions on a blockchain.
Use of Blockchain Technology in the Music Industry.
Let see how the music industry is operating at present and what is the problem which can be solved using blockchain:-
- DSP:- Any music streaming website.
- Label:- A record label, or record company, is a brand or trademark associated with the marketing of music Recordings and music videos.
- Artist:- Creator of music
- Mechanical rights organizations (MROs):- handle mechanical royalties
- Performing rights organizations (PROs):- handle performance royalties
- User:- Any person who plays a music file on the streaming website.
Content and royalties flow:-
The music service pays a royalty to a record label for each track that a user downloads or plays. The label passes mechanical royalties to the publishers of the underlying composition and pays a percentage of the remainder to the recording artist and in case of streaming music royalty is also paid to PRO as streaming of music is count as performance of music composition.
The creator of music is rewarded/paid according to the number of plays of the song from content DSP website. Whenever a user plays a song from the streaming website. There can be two methods in which file getting loaded on the user application music player:-
- By loading song directly from the DSP server. (i.e When music label provides music file to DSP)
- By streaming the song from music label server through the DSP website.
(i.e when music is directly streamed through music label server)
Both of the above methods contain some trust problems.
- In the first method the data about music file is siloed ( stored on the databases of multiple DSPs) and the problem here is music label needs to trust on whatever data is provided by DSPs (For ex: Number of downloads of a music file) and music artist, in turn, needs to trust on the music label and we think that this problem can be solved with blockchain as we can see data is siloed and multiple parties are involved and everyone has their own profits in hosting blockchain node. Also PRO and MRO can host nodes.
- In the second method as data is only maintained by the music label so we need some participants involved in business who can host the blockchain nodes because if we don’t have multiple participants involved then it is inefficient to use blockchain.Here we think the PRO and MRO can come in to picture.PRO and MRO can also host their nodes in the first method also
In blockchain we cannot store entire music file so to solve above problem with blockchain is to create links between transactions on blockchains and the music files that are the subjects of the transactions, by putting an identifier in each transaction record that matches an identifier in each music file. This can be done if the identifier in the music file is robust and immutable enough and if it is sufficiently unique for the application.
Identifier and be inserted in two ways:-
- Using hash of music file
- Using watermark in the music file
Hashes act as a good identifier but they are not robust , flexible and secure whereas watermarks are robust , flexible, secure and good digital identifier.
So the process will be Whenever someone plays music through an interactive streaming service, the service could deposit a transaction on a blockchain so that all metadata related to music files will be recorded on blockchain.(.ie: Increasing the number of plays or downloads in the blockchain .)
The entire process will look like as explained in below figure:-
- A label (1) sends a music file, File X, to a DSP (2). File X has the file’s ID.
- ID X, embedded as a watermark. One of the DSP’s users plays the track, and the DSP deposits a transaction on the blockchain containing ID X (3).
- The label (1) also sends copies of the file with the embedded ID to two PROs (4 and 5) and an MRO (6).
- The label, PROs, and MRO can all query the blockchain, using the ID embedded in File X, to find transactions involving File X.
- The blockchain in Figure indicates two such transactions: one is from the DSP in the figure (3), while the other (7) could have come from another DSP.
- DSPs can deposit the transactions in real time, while the royalty processing organizations and also music artist can query the blockchain for them anytime.