Unsigned vs Signed: Do Artists Benefit from Blockchain?
[This article was published first in Reeperbahn Music Festival’s accompanying magazine.]
Blockchain. Yes, that topic which almost everyone is talking about in every business. Since 2015, you can’t escape from it in music. There is a myriad of projects based on Blockchain, and expectations are extremely high. It’s like 21st century’s Holy Grail to music business if you believe some people. But, what exactly are the advantages for artists? Since some declare Public Rights Organisations (PROs/collection societies) like GEMA, PRS, and ASCAP obsolete with the advent of Blockchain, what about members of PROs? Who will be better off, independent artists or signed artists? Or is Blockchain just another technology that only the major labels and tech giants like Apple, Google, and Spotify will benefit from?
Let’s take a look at two groups of artists. On the one hand, there are composers, performers and producers who are signed to a label, a publisher, and/or who are a member of a PRO – signed artists. On the other hand, there are those who are none of the above. At best, they are running their own tiny label. Keeping it simple, we call them unsigned. The core differences between both are their access to market and the capability to control the use of their works. Being signed means you are an integral part of the music industry. As an unsigned artist, marketing and administrational tasks are entirely up to you. You may be part of the musical and cultural ecosystem but it’s hard to pay your rent – despite of that it doesn’t necessarily mean you’re better off in the first group.
Blockchain for everyone
No matter if you are signed or not, these Blockchain features are relevant to any artist:
Security and authenticity: Since Blockchain features a strong focus on security it prevents infringement or theft of identity in various ways. New data and contracts are automatically approved by other participants of the Blockchain network. Consider them to act as independent “witnesses”. Contracts can’t be changed without agreement of all signees. The data itself is safely encrypted, and it is part of a chain that can’t be perforated. Plus, there are plans to establish a separate Blockchain architecture for identities that features the same precautionary measures.
Transparent allocation of all creators and performers: A widespread Blockchain for licensing with clean and secure data based on the Blockchain concept’s features can be ground breaking for a global and open licensing database. It is a long way to go but it’s a suitable approach to identify creators, to shop licences worldwide, and to pay every creator as it should be. There certainly will be no excuse to say: “We couldn’t find the licensing information in time”.
How to prove that my song has really been written by me? Imagine to automatically fingerprint each sequence, each sound, each stem, each recorded track from your soundboard or any other electronic device while saving. This builds up to a history of composition. A complete chain of evidence that the song is yours. Due to the character of a Blockchain it can’t be corrupted. It’s your legal assurance.
Blockchain for signed artists
Of course, advantages for signed artists depend on how labels, publishers, and most of all PROs are implementing and applying Blockchain. As a member of a PRO, or as a member of organisations such as DOMUS, FAC, etc. you can engage and have a say.
There are multiple ways for signed artists to benefit.
How does licensing work? Thanks to Blockchain’s responsive transactional concept, licensing works quite the same way as today but much faster and more secure. It’s more comfortable for licensees which should lead to more licensing and higher revenues for creators.
Do signed artists benefit from Smart Contracts? There might be a way. It is possible to extend and to constrain licences individually by additional clauses – with almost no administrational effort. PROs may add more options for individual choice. They may select and provide only those options which comply with law. It is the latter that is a strong advantage compared to unsigned artists who have to consult a lawyer.
Who takes care of my licence fees? Can he be trusted? It probably will be your PRO that’s running the Blockchain. The administrational workflows can be replaced by automated ones within the Blockchain. Actually, due to its purpose the PRO’s Blockchain might be securely separated from other Blockchains. Another option would be to establish a shared Blockchain run by multiple or all PROs simplifying cross-border licensing.
Can payments from PROs be accelerated? If the PRO’s transactions are transferred to a Blockchain all payments and splits are calculated in real-time. The date the actual payment is due still depends on the workflow of the PROs (and on accounting). Despite of that you should see reliable and exact numbers on your dashboard for current and for upcoming payments.
What about fees for User Generated Content (UGC)? Licensing of samples, fragments or songs can be more comfortable than today. Digital copies can be identified by a code; any descendant of an analogue copy have to be monitored by an algorithm. Content producers might be notified upon recognition of a potentially copyright infringing use. To enable publishing, the producer pays for all items that have to be licensed. All creators involved are paid according to Smart Contracts attached to the original works. The entire workflow including individual constraints for usage is automated and processed by the Blockchain. OneClickLicense (OCL) by Alan Graham and Rupert Hine is a solution very similar to this.
Is it possible to simplify tariffs for licensing? Definitely. Smart Contracts may replace tariffs. More precisely, tariffs might get coded. Smart Contracts are much more suitable for detailed customisation that otherwise would lead to even more complexity in rules. The licensee describes the intended use and receives a price tag. It’s might be possible to design a licensing interface with controls to see and learn about one parameters impact on the price.
How unsigned artists may benefit from Blockchain
You might be a DIY artist, you might have a team or even a manager, you might license your works under Creative Commons, or you might license under full copyright at your own label.
Unsigned artists have to take care of the entire workload of their business. Blockchain can transfer contracts, sample clearing, transactions, and accounting to a new layer that’s built upon the internet. It’s a transactional layer. Most likely there will be “naked” Blockchain services handling your transactions, similar to telco providers for access to internet. Specific service providers in the music business may allow for more comfortable access, comparable to music distributors.
How much am I paid, what for, by whom, and when? Transactions in Blockchain are executed in real-time. Wherever the track is licensed, your account shows when the payment will be in, if it’s in – and exactly how high the amount is going to be. Even if you may not be paid in real-time you can prove your financial credibility to your bank in order to get a credit.
How to control if the usage of my music complies with the licensing conditions? Just like you don’t need to worry about how an email can be send to the recipient, Blockchain maintains the rules and executes transactions only if they comply with the contract – automatically.
How to clear that sample? If you need to get a sample cleared it often is a pain. If the rightsholder manages his works on the Blockchain you can check the licensing conditions, digitally sign the licence, pay for it, and you are ready to go.
How to get my music found? Managing transactions on the Blockchain makes it much more attractive as a market place than the internet is now. The effort of licensing is extremely low. Finally, streaming services don’t have any excuses for not licensing, and even a low play count can be paid without administrational overhead.
How to claim licensing fees? Generally speaking, claiming won’t be necessary. Just like you can clear a sample someone else can license your song. The song refers to you and any other people involved in recording, performing, publishing and producing it. Automated processing calculates the splits. You get paid.
How to individually define licensing conditions? Limited availability, constraint access for certain people, no access for certain purposes: Everything might be part of the Smart Contracts (contracts written in programming code). But you have to be extremely careful – not every rule you wish to add complies with law. It’s better to consult a lawyer.
How to manage Creative Commons licence type changes? Blockchain keeps track of all changes. It avoids that the same track is licensed under different conditions which in turn avoids legal hassle with licensees.
Who wins?
Music wins.
If Blockchain is applied in a reasonable way in various fields of the music business or even throughout the music business, unsigned artists as well as signed artists are likely to benefit. Access to market as well as licence monitoring can improve by large. It’s important though to build an infrastructure that enables access to Blockchain for all creators, no matter whether they are signed or unsigned. Therefore, any artist should know what Blockchain is about, and you should participate in shaping it. Chances are that revenues from licensing will increase by Blockchain. PROs won’t become obsolete, instead there are quite some opportunities ahead for them.
All of this has to be taken with a grain of salt. It is a vision. But it is what Blockchain might have on offer. There certainly are questions, caveats, and concerns. These are to be discussed. However good the opportunities are we’ll never know what it turns out like in the end. If you bring your ideas and concerns to the table now, there is the rare chance we can avoid that Martin Atkins moment: “Welcome to the music business. You’re fucked.”
