Intellectual property arrangements in the music industry can be incredibly complex. This is both the result and the cause of the numerous intermediaries that sit between the listener and the artist. Ujo aims to solve this problem for the benefit of all. Jesse Grushack explains.

Transcript

Arthur: You’re listening to State Change, an interview series inspired by the emerging decentralization phenomenon.

Arthur: Intellectual property arrangements in the music industry can be incredibly complex. This is both the result and the cause of the numerous intermediaries that sit between the listener and the artist. Ujo aims to solve the problem for the benefit of all. Jesse Grushack explains.

Jesse: When we started Ujo last year, we all the vision that the music industry was broken. It was a common belief we all shared, whether from working in the industry or the news that was online. We all have the same idea that the artists aren’t being paid fairly. There’s too many intermediaries involved, too many people extracting value without providing an equal or larger value in return. So, we set out to kind of examine what’s broken in the music industry and how we can apply blockchain technology to fix that and we published a manifesto of sorts last summer describing called ‘Music is Broken’ and this describes some of the issues in the music industry because the pipes that run the music industry are over 100 years old. We published this at theproblem.wtf — that was the URL. And it drummed up a little bit of interest, but it really drummed up more interest within the industry as a whole, and Imogen Heap, a grammy award winning UK artist who has shared a lot of these beliefs and has her own beliefs as to why the music industry is broken. She saw this and was like, ‘Great, there’s a bunch of people crazy enough as I am that understand this and it seems like they understand certain technologies enough to fix it’. After Imogen came to us, she gave us some specs that she wanted in this prototype and we set out to build basically a proof-of-concept describing her vision and showing the impact that this technology and possibilities and capabilities that the Ethereum blockchain can provide for the music industry. So last October, we released the ‘Tiny Human’ demo to the world and you were able to purchase the ‘Tiny Human’ with ether, which you would receive, in return, the download or mp3 file, as well as a license that you own that file. And the licensing and payments was all done through the Ethereum blockchain and it was all done automatically as soon as the user sent payment to Imogen, or to the song, rather. So, once it was processed, it would then be split apart to the appropriate parties and everything was done automatically and instantly. So forget about the two year waiting period you have to wait when you get about royalties, we’re looking at a potential of instant payments that you’re enabling through the Ethereum blockchain. And by that, I mean, we can show that if the artist decides that they want to publish the stems of the track, meaning certain instruments or vocals, then perhaps a producer or someone, like a DJ or someone that would want to either remix this song or use pieces of this song for some other one, to lay over another track, they would be able to do that quite easily. So it’s creating new value where instruments are existing, but it’s allowing people to be compensated fairly for their efforts, instead of people just ripping of tracks and this is kind of what led to SoundCloud taking down a lot of songs because you had remixes and unlicensed works being published under the improper accounts and they weren’t able to compensate artists fairly.

Arthur: OK, yeah that makes perfect sense. Because SoundCloud recently signed with a bunch of labels and they’re now taking down content, aren’t they?

Jesse: Absolutely, so the problem becomes that when you upload content to the internet, there’s not necessarily an owner for it. And so they were taking down content because it was unlicensed work, so they were paying the wrong people, essentially, for advertising. But recently, SoundCloud, as well as Apple, have signed deals to basically scan the tracks, do audio fingerprinting, and then hopefully pay out the appropriate parties.

Arthur: So that does sound a bit sloppy there, doesn’t it?

Jesse: It gets a bit messy as well because in the music industry, you have to realize that there’s so many different parties involved, so there’s so much different paper, and there’s really just a lot of manual labor needed, even though these systems are digitalized. Every step of the way, you still have to have print out paper. You have people comparing excel spreadsheets and matching tracks to artists and it’s really just a kind of a mess that could all be done — you can really automate this process to enable a more efficient system.

Arthur: Cool, and so what’s the state of the project now, and what are your next steps in making it a reality?

Jesse: So right now, the project is really in a research period. And we’re working on building out the next version, so while we’re talking about legacy systems, as well as licensing, and content management, we’re also building tools to enable artists to remove some of these players and create the value for themselves.

Arthur: So you’re working with legacy players? Are you looking to…cause it sounds…we hear a lot about solutions to issues with the music industry and you see them as these kind of grand re-inventions of this huge system that already exists. And sometimes it feels a bit implausible so you mentioned that you are working on solutions with legacy players, can you talk about which legacy players you’ve spoken to and what potential solutions might look like?

Jesse: Absolutely, so when we’re talking about legacy players, it’s very hard to imagine completely changing the music industry without going into every car and ripping up the radio, because music is so ingrained in everything we do, really, that you can’t stop it from playing at a bar, playing anywhere. So to completely go from one system to another, in my opinion, it’s a very monumental task, and I applaud anyone that goes after it, but it’s very very difficult. So we can’t really swap out radio, and we can’t just change licences and existing copyrights for all the music that already exists because there’s millions of songs. So we’ve been speaking to some legacy players, some bigger copyright holders, as well as performing rights organizations, to really help them clean up their offices and make them more efficient so they can provide better service to their artists.

Arthur: So where can people find out more about Ujo and about what you’ve got going on over at ConsenSys, Jesse?

Jesse: You can head to Ujomusic.com to check out the prototype release from last October as well as sign up for our newsletter where you can receive updates for more information. And you can head to ConsenSys.net for information on anything really at ConsenSys.

Content: Jesse Grushack, Arthur Falls

Editing: Richard Toth