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Imagine this: a single platform where you can search for a song and uncover a record of every single player that has touched that song from inception to delivery. Every songwriter, producer, sound engineer, and everyone in between. Imagine a transparent revenue-sharing model that pays artists their fair share of royalties right away. Imagine a world of increased trust and accountability between artists and large media corporations.
While this all sounds great, we are not quite there yet. For artists and media companies to reap these benefits, all players of the digital music value chain need to participate to create a scalable network. Blockchain can get us closer to making this ideal platform a reality.
A broken royalty system
Many industry professionals and especially artists agree, the current royalty distribution system is outdated, unreliable, and does not prioritize the artist. There is an estimated USD 250 million of royalty money earned but not distributed to its rightful payees. These unallocated funds can be caused by contract discrepancies, improper registration or mismanaged data.
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Before the age of digital distribution, mechanical royalties, which are paid out whenever a song is reproduced, were based off physical units sold, such as records or CDs. Today, streaming platforms pay a set rate per play, ranging from $0.00069 per play on YouTube to $0.004 per play on Spotify. A song on Spotify needs about 230 streams to earn one dollar. Once proceeds are split, artists receive a small cut of the total royalties.
Without an accurate record of contributors to a song, royalties cannot be paid out. It can take years to receive payment, if at all. “All it takes is one songwriter to not be credited,” says a representative from NONRESIDENT, a New York City-based record label and distribution platform for diaspora artists. “Royalty payments are often three to six months delayed. What happens if a song blows up and when the stats come in, not everyone was credited? At that point, changing the metadata is a pain and often swept under the rug. The smaller of a role you have in a project, the less you are prioritized.” This is especially a problem for up and coming artists who may not be equipped to resolve these issues in a timely manner.
It’s all in the metadata — or is it?
Many of the inefficiencies in digital media payments and crediting results from inaccurate metadata, which in short, is all the information about a song, embedded directly into the file. Behind every music file is its metadata, containing the artist’s name, songwriters, producers, sound engineers, copyright information — the list goes on. For all music contributors to receive due recognition, the metadata has to be consistent and accurate across all platforms. Unfortunately, that is not always the case.
There is no standardized method or “right way” to log metadata. The most important thing is for the information to be captured correctly. But as a song moves down the media supply chain, bits of information can get lost or misinterpreted due to computer and human errors. These problems can be attributed to the lack of a central database to store this information. When companies are receiving inconsistent information about a song, contributors are left unaccounted for.
Accountability with blockchain
Solving the problem of fractured metadata in the music industry can create a complete view of all contributors to a given piece of work while also streamlining the payment process.
Blockchain is being used to reliably manage and track numerous aspects of the media creation process. Grammy award-winning artist Imogen Heap founded Mycelia in 2015, a blockchain-backed digital ecosystem where creators and media management representatives use digital identities called Creative Passports to manage their data. Information on a song and its contributors would be stored securely, creating a seamless database that helps facilitate accurate and efficient royalty payments.
Building a shared, decentralized metadata network using blockchain allows participants across the digital media value chain to input and share data in one space. In 2017, Spotify took action by acquiring Mediachain, a company offering a single interface to house data contributed by organizers, creators and developers. Information about songs have unique identifiers which can be shared across multiple parties, reducing mismatched or missing data. By adding transparency and accountability, blockchain helps identify and allocate credit where it’s due based on collective effort.
Collective effort creates success
The music industry has gone through a rapid transformation over the past 20 years, developing an almost-entirely digital presence with a labyrinth of new players. While the industry is keeping up with modern tech, the complexities of rights ownership and payments is still murky.
Companies across the globe are recognizing these challenges and are disrupting the music world with blockchain. Consensus is essential to a successful blockchain solution, reducing the risk of forgotten contributors and absent metadata. Creating a scalable network will take time, but if early adopters as prominent as Spotify continue to take a stand against negligence in the industry, we will be one step closer in the right direction.
Read more about how blockchain can help transform the media industry. Also, check out the full blockchain thought leadership library.
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