People are interested in the potential for blockchain in the music industry because they have been sold on the promise of greater accuracy and efficiency. The ability to mechanistically license, distribute, track usage, and pay royalties; all within a provable closed loop. It’s going to finally unlock the capability for micro transactions, which will step change our industry’s revenue.

But how? And why do we need blockchain? In theory, nothing listed above (provability aside) requires anything more complicated than what we have already. What is it about blockchain technology in particular that is going to make a difference and enable this next stage of the music industry?

Well, to answer that, we need to delve a bit into some of the reasons as to why we aren’t there already:

Information Asymmetry

It’s no secret that our industry runs on siloed databases. When Party A transacts with Party X, it sends over its current best view of the rights that it controls. Likewise, when Party B transacts with Party X, the same interaction occurs. Party X then compiles the bits of these views that it deems useful into its own growing database, creating a third view.

Now we have three discrete views. However, importantly, neither Party A or Party B has specifically signed off on the details that were eventually included in Party X’s aggregated view. 🤯. There is no consensus.

Manual data reconciliation

Each of these views of ownership are sent flying around between stakeholders in the form of flat files; XML, spreadsheets, etc.. Initial registration aside, there are minimal APIs or open data streams between parties. What this means, is that there is an entire sub-industry, within the music industry, whose job it is to pick up these flat files and, often manually, pull the useful data out and into other files. Not only is this inefficient, but tracking information provenance becomes incredibly challenging.

Access is ownership

The third problem with this industry-wide set of business processes is that the only way a stakeholder can state its ownership over a set of assets is to send its data to other parties. And in doing so, that party is effectively losing sovereignty of its data.

In summary, we need to find a solution that can:

Produce consensus on ownership Minimise the requirement for manual intervention While maintaining self-sovereignty of data

To produce a “single source of the truth” that everyone can agree on, and then use to automate their business processes.

What is truth?

But hang on, the music industry doesn’t really deal in “truth” … it’s far more subjective than that. When a band goes in to the studio to write a song, they can come to an agreement on splits at the time, but things change. Ultimately, this agreement is just an opinion of ownership, which may or may not have consensus with the parties that were present at the time.

The track could then be sent to a producer for a rearrangement, and she might, for example, decide to bring in another vocalist to re-write the chorus. At every stage, the “truth” of the ownership of this piece of art is shifting. And we haven’t even considered each contributor’s publisher(s) yet.

In addition, copyrights change hands all the time. They can be further split into pieces and bought and sold like assets, to the extent that we’re even starting to see the emergence of copyright trading platforms.

So, while we need to find a solution that produces consensus, we also need one that considers these very complicated and changing ownership dynamics.

Enter, the AVOC 🙌

Therefore, we introduce the concept of an “Authoritative View of Claims”, which we like to call an “AVOC”, because it sounds like Ewok 🤓.

The AVOC is similar to a “single source of truth” in its function, but its strength really comes from understanding authority, and how it can work together with identity.

In traditional systems, incumbent stakeholders have preserved authority by limiting who can participate. By restricting the number of parties that are authorised to state claims, you can create a floor on the quality of assertions that are stated.

It should be said that there are multiple blockchain initiatives, both in the music industry and outside, that are developing ideas around this premise. They generally consist of a handful of parties utilising a private fork of a blockchain as a means to more openly align their business processes. And in some cases, it absolutely makes sense.

Take, for example, Tomorrow Labs, who are building a product for the Finnish Land Registry. They require specific government agencies to interact with each other in a closed environment, thus a private blockchain is logical. The specific parties required are bounded, and the details involved really are “facts”.

However, the music industry is different. The parties interacting within it are unbounded, and, as stated above, we don’t really deal in facts. We need the best possible view of all the opinions that have been stated. We need a network that is open to everyone.

Identity and reputation are everything

This open network comes with its challenges; how do you stop spam and spoofing? How do you turn this mangle of claims and counter-claims into something useful?

We believe that the answer lies in building on a robust foundation of identity and reputation. Having a deep understanding of who someone is, their relationship to the claim that they’re making, and their relationship to everyone else that is making a counter-claim, is essential in surfacing the most authoritative version of that claim.

Therefore, we have been hard at work developing our own identity tool, KORD ID (more on that VERY soon…).

The concept of identity in decentra-land is a very difficult subject (and well outside of the scope of this piece), however, the role that we need KORD ID to play is made simpler by the existence of “real world” identities. KORD ID will be a mechanism for parties to aggregate every role that they play within the music industry, providing the context required to assess their relationship to a claim.

This then unlocks the opportunity to build some really interesting reputation dynamics within the system.

Once the KORD network is up and running, identities will start to build up a history of all the claims that they’ve made, and the impact that each has had. Reputation within the system can be built, contextualised by claim type, which could be considered when assessing future claims.