This MBW op / ed comes from Ran Geffen (picture inserted), founder of XR connect development agency OMR and CEO of Amusica Song Management in Israel. Here he gives a sober look at the future of the music industry …
Music companies have demanded that Twitter fully license the music. But as the platform’s potential new owner, Elon Musk will not play the music industry’s game – instead, the music industry must play its part.
That said, a Musk Music DAO initiative (let’s call it MuziX, given Musk’s branding history) could actually be the answer to their plea: it would be a blockchain-based, decentralized copyright management and licensing platform that would democratize the way music is. licensed.
The big potential losers should Musk decide to wade into the music business? Collective rights management organizations and, by proxy, their respective members. To survive in Musk’s world, they must be the architects behind their own (current) death.
Let’s take a closer look at Twitter’s position in the landscape in a music business context: It’s a gathering space where musicians interact between themselves and their fandom, and where web3 music projects are launched and managed.
It was branded by IFPI as “a major concern for the music industry” in its submission to the European Commission and PRS CEO Andrea Czapary Martin called on the company to “take responsibility for the music they share with millions of people around the world”. Twitter’s response was: “We are always looking at ways we can support our creative community.”
Now let’s take a closer look at Musk. His TED Talk about the future gives a good insight into the way he thinks and operates. His primary interest right now? AI. It took time for the AI of autonomous cars to learn to use roads designed for humans.
It should understand and mimic human vision and interaction. Optimus, Musk’s humanoid AI robot, must also understand humans in order to interact with them.
Twitter is the perfect place to analyze human interaction based on short statements and reactions. Musk would magnify this interaction by letting its users see if the algorithm changed a given tweet and suggest corrections. In short: Musk turns Twitter’s customers into partners in its mission to improve human-machine interaction.
Hipognosis’s Amy Thompson suggested the same solution in a recent one MBW podcast – a global copyright database proven by the creators themselves. She also highlights the lack of transparency as a major problem in today’s ecosystem. Transparency is at the heart of blockchain technology.
Tom Allen, from Curve Royalty System, provided a time frame of 10-15 years for the industry to adopt blockchain as a solution (using self-driving cars as an example) and talked about the scale and the high transaction fee on Ethereum. Musk committed to rolling out self-driving cars next year. Processing music transactions would be a walk in the park for him. Transaction costs, which have been marked as a concern, can be reduced by simply moving to a cheap, reliable, green blockchain.
So what would MuziX’s components be?
- A register for all players in the music industry that would provide a unique international ID number and link them to a dedicated electronic wallet that would give them an overview of all their assets and income generated across the music ecosystem by type of use.
- An open database of contributors to music compositions with splits recorded on the blockchain, and smart contracts that would set the terms that allow recording artists, DSPs, or anyone else who wants to use the music to stream, sync, or sample.
- An admission management tool based on a registered composition linked to it that would register all the participating contributors – producers, performers and session players – on the blockchain, and the terms that allow the use of an admission for any purpose.
- A digital box of recordings that would include a demo of the new recording to complete the recording of the composition. The demo recording will be analyzed via fingerprint technology to ensure that the composition is original and will enable sampling requests. The system will also allow the uploading of trunks that can be used according to the terms of the smart contracts and a fingerprint of the transcoding.
- It would create the same thing for any visual / audiovisual work associated with a recording or any contributor.
- A switchboard that connects all data with the API, which will allow anyone who wants to use the copyrighted material personally or collect it to third parties according to the terms of the smart contracts.
In this new world, songwriters and publishers would be at the center of creation with the tools to dictate the terms of their compositions. The recording artists and master owners would also be able to set their terms. Creators could get an instant license to use tribes to create new work and new income for the original creators. The same goes for AI music creation tools that could give fandom access to licensing elements from music they like. Freedom to create, transparency and instant compensation as provided by music creators.
The infrastructure is already there, evolving and taking shape. Take a closer look NFT music landscape, visit the websites, subscribe to their Discord channels, read their roadmap and white papers, talk to them and put the points together. Streaming is the main source of income for artists and songwriters. Since 80% of the artists on Spotify have fewer than 50 listeners a month, they have to make money elsewhere – in the web3 and NFT area they can set their own rules and conditions for engagement with their fans.
“The music industry is investing heavily in metaverse entities to try to grasp current trends and pull them in line with the old world. Social media and streaming platforms embrace NFTs as a commodity for sale and not as a tool to pay royalties.”
But as things stand, PROs, big record companies and publishers are not part of this equation.
Instead, the music industry invests intensively in metaverse entities to try to grasp current trends and pull them in line with the old world. Social media and streaming platforms embrace NFTs as a commodity for sale and not as a tool to pay royalties.
(And by the way, I’ve talked to lots of web3 players and they’re more than willing to play ball with the traditional music industry the right way)
Musk can change this in an instant and invite his other crypto-natives from the music industry – disruptive players such as the members of the Song Guild of America (backed by Hipognosis, backed by Blackstone) and the other early users in the decentralized zone, to create a better place for copyright holders.
Musk did this successfully with the automotive industry and forced them to develop electric cars. In his TED speech, he described this as a “philanthropic act”. He can do it for the music industry. If he builds MuziX, they will come.
A simple tweet from Musk considering such an undertaking could finally unite the music industry in an attempt to save itself … from itself. The staggering amount of money that will be saved on IT development, data storage and administration costs of the PROs, record companies, music publishers and DSPs could be allocated to better serve their customers and redistribute wealth for the benefit of music creators. Remember, without writers and musicians there is no music business). The authors and their respective publishers (if any) own the PROs, and the change should begin with them.
In 1993, my first mentor in the music business – Sam Trust, the legendary head of ATV – taught me my first lesson in music publishing: “Go to the fundraiser, spit on the floor and do not stop shouting until they pay you to shut up”. Much has changed since then. The PROs have taken a huge leap to provide better service and transparency to their members. The problem is that they have done it separately. Why? Ego.
Ego has driven PROs to spend a lot of money recreating the same systems in territories around the world. From GRD to ISWC and beyond, they have stumbled time and time again. ICE, SACEM and MINT compete and poach customers from each other, all at the expense of their members / owners. All of the above are not equipped to handle the web3 site. Instead of creating an environment to support it, they try to shut it down, just like they tried with Napster.
PROs can continue to do the same and expect different results (Einstein’s definition of insanity) or get CISAC to gather all the valuable information stored on their members’ systems and use it as a global hub for all fundraising companies – create their version of “MuziX” with their members as co-owners. If they do not, other players will step in and allow their members to license rights using blockchain technologies. Some of the players in the NFT music landscape are actively doing a good job of preparing this infrastructure to support e.g. Alan Walker, as described in a recent MBW podcast.
PROs need to get slimmer. We do not need them to be these big, bloated organizations. Their role in this new world, if they want one at all, should be to get the best deal for writers through legislation and negotiation and, most importantly, education. It can only work if they work together and there are some good smart leaders across the music industry. Putting the ego aside will enable them to take the right action.
As for Musk? Let’s see what happens if and when he tweets this to his community. Music business worldwide