Why is the music industry interested in blockchain technology?

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Over the last decade, blockchain has been the focus of attention in the digital sphere. The music industry has understood its potential and is now investing in it for the management of copyrights. Blockchain is often presented as a revolutionary technology that will put the artist back at the heart of the value chain.

In a few words, blockchain is compared as a ledger in which all the transactions carried out by the users in a peer-to-peer network are timestamped since its creation. They pay with crypto-currency such as Bitcoin or Ether for instance. This database is secure and works like a distributed platform which reinforces transparency. It is shared by all its users without the need for intermediary. Thus, every user can verify if the transaction is valid.

The best way to explain how blockchain works is to illustrate it:

A better identification of copyright holders

Artists can register their creations on this trusted ledger which will be timestamped. All the data kept in it are unfalsifiable. Therefore, this ability can generate proof of anteriority. They will be recognized as authors of the track. For instance, Mediachain (which was acquired by Spotify) and Proof of existence already propose this service.

This functionality allowed by the blockchain technology is also a crucial opportunity for collection societies and streaming platforms. This tracking ability appears as the remedy to their struggle when it comes to paying the copyright holders and all the creatives involved in the making of the song. Indeed, artists always complain about the slowness of copyrights payments. Blockchain will facilitate the identification of the copyrights’ beneficiaries thanks to the information held in the database.

Since April 2017th, three of the major collection societies in the world, ASCAP (American Society for Composers Authors and Publishers), SACEM (Société des Auteurs Compositeurs et Éditeurs de Musique) and PRS for Music (Performing Right Society for Music) have been collaborating in a blockchain project with IBM (1) in order to find solutions to improve the identification of copyright holders and resolve ownerships conflicts.

An ability to allow a better distribution of copyright earnings for every artist involved in the creation of the track

Smart contracts used in the blockchain technology allow a better distribution of copyrights earnings to every artist who contributed in the making and recording of the track. Smart contracts are self-executing programs in which sets of instructions are written with a computer code. Artists can define in advance their rates in smart contracts. The transaction will be quicker and without the need for intermediary.

In the case of the release of Imogen Heap’s track “Tiny Humans” using blockchain technology on Ujo music platform, the singer was able to set the price for streaming and downloading. Even though they didn’t earn a lot of money because not every buyer had Ether to purchase the track, Imogen Heap is very optimistic in the development of this technology for the music industry. (2) Ujo music is now partnering with the DJ RAC for the creation of a “Creator’s Portal” where artists can control the management of their copyright.

However, there is still no regulation regarding blockchain. A few months ago, the French government organized a public consultation regarding blockchain. The resulting draft order only addresses the use of blockchain in the context of financial securities.
So far, the ordinary law will have to be applied to this form of proof allowed by blockchain for copyright. We will have more details when a judge will have to decide on this issue.

(1) Blockchain : La SACEM, ASCAP et PRS for Music s’allient pour une meilleure identification des œuvres
(2)Blockchain Could Help Musicians Make Money Again
(3) UJO MUSIC X RAC

A propos de Kahina OUAMRANE

Etudiante en Master 2 Droit de l'économie numérique à l'Université de Strasbourg

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