April 18, 2017 | Written by: Jay Akasie
Categorized: Media & Entertainment
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If you don’t think the music publishing business continues to change its tune at a rapid clip, consider that the “Father of American Music,” Stephen Foster, died with three pennies in his pocket. Sadly, one of Foster’s biggest hits was “Beautiful Dreamer,” published after his untimely death in 1864. Artists still record the tune to this day. But Foster’s descendants will never receive any royalties from it.
In the Media & Entertainment industry, IBM is today’s beautiful dreamer. And with major licensing companies, IBM is making sure data protects artists’ dreams. Part of that technological platform involves a digital protocol that was recently used almost exclusively in the financial sector: blockchain. But even the creative set in the music business has discovered blockchain’s vast potential. The world’s three major trade groups representing professional musicians and composers:
- ASCAP (America)
- SACEM (Europe)
- and PRS (United Kingdom)
just announced a groundbreaking partnership “to prototype a new shared system of managing authoritative music copyright information using blockchain technology.” Doing so will further extend their reach and protect the copyrights of the world’s musical entertainers. The groups plan to use Hyperledger Fabric, the open-source blockchain technology from the Linux Foundation, so that they can “match, aggregate, and qualify existing links” between world-wide recording and copyrighting codes.
Quite a change from the 19th century, when songwriters would sell their compositions to publishing companies to put food on the table. With blockchain, a composer or performer can track in real-time every instance and place around the globe her song is being performed so that she can receive her agreed-upon royalty.
Achieving the Dream
So how did the entertainment world get to here from there? After the demise of a prolific and famous songwriter like Stephen Foster, composers and eventually recording artists gradually made sure they would never again allow others to reap all the financial rewards that came with their songs. They would strike ever-more lucrative deals with music companies that gave them a stake in every song that they wrote and/or performed. Of the many notable deals in the 20th century, Frank Sinatra’s was perhaps the most visionary. Already one of Capitol Records’ biggest stars, Ole’ Blue Eyes left the company in 1960 to form his own label, Reprise Records, claiming he wanted more artistic freedom over what he recorded and sang.
In 1963, after quickly building up the label with A-list performers ranging from Rat Pack pal Dean Martin to psychedelic rocker Jimi Hendrix, Sinatra turned around and sold Reprise to Warner Music for what was said to be around $200 million. Even more impressive was that the Chairman of the Board kept a 20 percent stake in Reprise as Warner brought economies of scale to the niche label and grew it unto a globally recognized brand that exists to this day.
From Crypt to Hip
To be sure, blockchain got a bum rap because it was initially associated with many of the cryptocurrencies that went boom and bust and boom again, the kind of speculative Wall Street ride that attracted the Winklevoss twins of The Social Network infamy. Because Bitcoin and other cryptocurrencies aren’t pegged to a federal bank or the price of gold, and with the promise that a limited number would be “minted,” there was a flurry of activity around what could be a new, global currency. But Bitcoin went nowhere (and continues to stagnate).
Yet banks quickly noticed the technology behind Bitcoin. A mark that it had arrived and passed the scrutiny of the most discerning of crowds was when the Depository Trust and Clearing Corporation, the company that has recorded just about every trade on Wall Street for the past four decades, began using blockchain as one of its primary databases. Why? Think of blockchain as a safe deposit box in the sky. Each box has two keys – one public and one private. Lose the private key and the box is gone forever because the owner can’t drill into the box or have a new key made. Making things even more secure is that engraved for the ages inside each box is a list of every previous owner. So a blockchain user gets both security and transparency.
Leveling the Playing Field
Blockchain also imparts a kind of level playing field to those who use it. Everyone who wants a safe deposit box for free contributes processing time from his computer that is then used to power the work required to further record the ownership of the boxes. There are a fixed number of boxes, and each day it takes a bigger contribution of computing power to get one for free. The best part? You can put just about any financial or musical claim you like inside the box and when you hand it to a concert promoter or an album producer there will be a record of its contents for the ASCAP, SACEM, and PRS regulators to see.
Blockchain is not flashy. Its roots aren’t in show business. But its gradual adoption by artistic organizations to ensure that their members – especially performing artists – are fairly compensated will make it a trusted part of the media & entertainment business in decades to come.
Mr. Akasie is Content Manager & Client Advocacy Leader for the Telecommunications, Media & Entertainment, and Energy & Utilities industries at IBM.