Using the Blockchain for Music Distribution and Revenue Generation

Discussion

Jamie Bartlett :

“These twin concerns – opaqueness and a general sense of unfairness over pay – are what seems to be sparking the artists’ rebellion. When Apple Music announced it would allow users a free three-month trial of its new streaming service – and that artists wouldn’t be paid for those three months – Taylor Swift threatened to pull her music from the store. Apple quickly backtracked. Other well-known stars, such as Prince, have pulled their music from streaming services, claiming it to be unfair. A number of new technology firms have sprung up, spotting the opportunity for new revenue models for the industry, such as Kobalt, which allows artists to access a database that records every time their work is streamed, broadcast, sold, reused and publicly broadcast.

But Heap is taking another line: using her latest song as a test case to try something completely new. “I’ve reached a point in my career where I can take risks,” she tells me in her home-cum-recording studio. “And as life does in nature, music will find a way. We are in a tricky transitional phase, especially for new talent, and I want to help move things along so we don’t miss a generation of great music.”

Following the release of last year’s album, Sparks, Heap began mulling over some ideas on releasing future music. She wanted to be able to simply upload a single authenticated version of a song or album that everyone could draw from in one place, instead of supplying her song to multiple services and locations. She also felt there was more than just the music to share: cover art, credit information, brands of instruments used, licensing information. She got chatting with a musician friend, Zoë Keating, who was similarly frustrated, and Keating mentioned blockchain technology. “I started researching the tech,” says Heap, “as I realised that the building blocks for a sustainable, useful ecosystem for music was coming into view. So I decided to release my new song in the way I think things should go, and help build the place I want my music to be a part of.”

Hardly anyone outside a smallish group of programmers and tech geeks has heard of blockchain, but those who have are unusually excited about it. To learn more, I met with Vinay Gupta, who’s part of a group called Ethereum, which is developing blockchain technology. Last year, Ethereum founder Vitalik Buterin won the world technology award for IT software. In practical terms, Ethereum does two things. First, it’s building a new web out of the spare power and hard drive space of millions of connected computers that its owners put on the network. Because it runs with strong encryption and the network is “distributed” across all those individual computers, it’s more or less impossible for anyone to censor or control what’s on it.

Second, it allows people to create immutable, public transaction records. The problem with digital records is that they can be copied and so are not really owned by anyone. Borrowing the idea from the digital currency bitcoin, Ethereum records information on a public database in a chronological way that prevents copying, tampering, fraud or deletion. It’s a new anonymous, decentralised, uncensored internet, and a new way of controlling and storing digital information. It’s not designed for music – it’s designed for whatever people want to use it for. One key aim is to create purer, more efficient markets. But it just so happens to be perfect for what Heap is planning. When Heap heard about Ethereum, she arranged to meet Gupta and others to discuss how it might work for music. I asked if I could join them, as I have been following the development of blockchain technology closely since my last book The Dark Net.

I suspected that Heap and Gupta might actually come up with a plan, and I wanted to document it. In a series of late-night emails after rehearsals, she sketched out a vision of how a new blockchain model, which she called Mycelia, might work for music. Gupta, a tech scene veteran who’s hard to impress, told me her ideas were “as impressive a piece of engineering imagination as I’ve seen from anybody in years”. Because Heap now produces her own music independently she’s not contracted to release her song via the usual route. Instead, she will be placing the studio-recorded song, video, live performance and all Tiny Human-related data as files on her website, open to those developing new tech for the blockchain. All the taggable associated data that could interest fans or potential clients (film and TV, brands, other artists), such as the lyrics, photographs, the instruments she used, the musicians who played, etc (“I think I’ll add this article too,” she told me) will prove inspirational, she hopes.

Crucially, she’ll also include simple contracts, revealing under what terms the music would (ideally, as this is an experiment) be downloaded or used by third parties, such as advertisers, and how any money earned will be divided up among the creatives involved. All payment received – using crypto-currencies – will be routed to the recipients, as set out in the contract, within seconds. (It typically takes between weeks and months for royalty payments to work their way through the chain at the moment.)

Taken together, this means transparency and clarity can be introduced into the music industry; a decentralised registry will make it easier to locate the owners of the song to obtain a legal licence to use it; money can be quickly sent where it needs to go with far fewer intermediaries; and there will be a far richer ecosystem of data and information around each song.

Heap is a technology whiz, but she knows this isn’t something she could tackle on her own – its success depends on diversity and collaboration. Indeed she’s inviting techies and hackers to spend the day with her to collectively build Mycelia, or something similar, using Tiny Human as the test case.

I want hackers to take my song, and then try whatever they want, to use it how they want, and to work out what we can do. We’ll see what they come up with, and take it from there – working together to build an open platform for everyone.”

Where “there” is exactly is not quite clear, although Heap is ambitious. “One day, I hope a Mycelia-like place will exist: huge, beautiful, rich, colourful, loved, tended for; holding all music-related information ever recorded anywhere; connecting artists and fans and enabling the artist to be the best at their job, with incredible feedback loops, connecting dots that exist in ways we can’t even imagine today.” (The name Mycelia refers to the enormous thread-like vegetative part of fungus that can stretch for miles underground.)

When she tentatively mooted Mycelia online, it struck a nerve. She has already been contacted by dozens of tech companies small and large who are currently developing services on the blockchain and are prepared to try and build something with her.

Phil Barry is one of them. He founded a platform called Ujo earlier this year, which uses the Ethereum blockchain to allow stakeholders to record their rights, to publish policies on how they want their music to be used (what price, what terms and so on). Ujo’s specific trick is creating smart contracts that automatically send payments to rights holders. He was introduced to Heap by Gupta when it become clear that Barry was working on something similar to what she had dreamed up. Barry suggested to Heap that she should let different platforms, including his own, try to build Mycelia, with the hope of creating a single, open, free platform – which led her to releasing Tiny Human this way.

How disruptive could all this be? Dramatic, Barry thinks. “Anyone on the existing system that adds value will survive. But all the people between the artists and the consumers are at risk. But if record companies can identify talent better, or add value in marketing, they can sell those services.” Gupta, for his part, thinks that every single creative industry that relies on digital content might one day use this blockchain technology to get artists paid and create a purer, more transparent marketplace between them and the consumer. “All of the content verticals are in trouble,” he says. “Advertising is a shit business model, as no one likes ads. Music, video, photo: they are the same really – it’s just digital files being shuffled around different computers.”

Others take a slightly more moderate line. Alan Graham’s project OCL also uses the blockchain, but it’s more focused on allowing rights holders to create and deliver multiple types of content via an app or platform in a way that means it can be tracked and monetised quickly and efficiently through micropayments. OCL is trying to work with existing companies and so-called “legacy” systems and contracts as a bridge, rather than redesigning the system from scratch. For example, it can be integrated with Spotify or Snapchat. There are lots of uncertainties. Heap tells me she’s not expecting Mycelia to transform the industry overnight. Many artists have to try to build this place for themselves, together with coders and developers, and one key challenge is to keep it in the hands of the artists and music lovers and not one company. The blockchain is not magic, and what matters most is whether consumers use it, and how existing companies with their legacy contracts and market power react if they do.

The greatest unknown is not whether the technology will work – I’m confident that it will – but whether the people who listen to music actually care about any of this. Music listeners are an unpredictable bunch – although they like to pirate, they also like to pay for artists they genuinely like. Are you sure people will want to pay for something they are now getting for free, I ask Heap.

“I don’t think it’s that simple,” she says. “It’s not about paying or not paying, it’s how and who gets what. There is plenty of money being made out of the music that we make, but it isn’t getting back to us. It’s about creating a fair trade industry for music, an ecosystem that makes sense. If people knew a radio station, a platform or a device was using a fair system, and that artists were being recompensed for their work directly, they’d go for it over another that didn’t.”

While doing the interviews for this article, I came to realise that maybe this uncertainty is part of the fun. Everyone I spoke to seems to agree something has to change, though no one can quite work out how, and that makes it a strangely exciting time. Heap told me several times that she still can’t imagine exactly how the future of the music industry is going to really look, “but a lot of us feel like there is an alternative out there, and that this type of technology could be it”.

Technology is too often viewed as either the saviour or wrecker whenever things go wrong. It’s sometimes both. Digital technology has for a long time been seen by the artists as part of the problem facing their industry, but now it could be the solution to the very difficulties it’s helped create. “For the first time I think the future is almost blindingly bright for our industry,” says Heap. “But we musicians have to sort this out, because no one else is going to do it for us.” (http://www.theguardian.com/music/2015/sep/06/imogen-heap-saviour-of-music-industry)