Context: why do we need a global view of rights?

When we introduce JAAK and KORD to people for the first time we often start the narrative by describing the initial iteration of JAAK, an incentivised interoperable global social layer on top of streaming. The idea was to use smart contracts as a mechanism to allow fans to take part in the value creation of music. A good idea in theory, however, scuppered due to the inconvenient truth that there is no central reference for who owns what in the music industry. That’s not to say that this couldn’t work in a direct-to-fan, unsigned, iteration of the market, one running parallel to the systems and processes that underpin the current mainstream value chain. But designing for this world is going to take a damn long time to build out to scale, and ultimately end in a pretty low ceiling in terms of impact.

It’s easier on the recording side of the industry, where there should be a single owner for a recording in each market. However, for the composition rights, things get much more complicated. Most songs involve more than one writer, and each of those writers often have different representation (publishers, performing right organisations etc.).

There’s also the challenge of the creation process. A song isn’t created in a snapshot, creation takes time and collaboration, both of which pose issues with regards to documentation and data capture.

There is a complex and inherently personal discussion to be had about who contributed what to a given composition, which is often had in silos, or not had at all in some cases. The splits can be negotiated many months after the creative process, where everyone has different recollections and work through third parties. Ensuring everyone is talking about the same composition comes down to having a common, unique, available, and comprehensive identifier. But that single identifier can’t currently be issued until the splits are agreed.

The two main identifiers at play in music — International Standard Recording Code (ISRC) and International Standard Work (composition) Code (ISWC) — have two different approaches. ISRCs can be allocated by a broad range of parties, and so are almost always present when a song is released into the wild, however, the cost of this is that there is a high level of duplication (multiple un-linked codes assigned to a single recording). ISWCs on the other-hand are much more centrally controlled, but often not assigned until a much later stage, sometimes months after the track hits listening platforms (although this is expected to improve with publishers getting limited access to CIS-NET).

This asymmetry leads to a big challenge with regard to linking the recording and the composition — essential for knowing who to pay. We end up with many partial views of the ownership of music squirrelled away in silos.

Previous data consolidation attempts

There have been initiatives to try and address this need, such as the “International Music Joint Venture”, the “International Music Registry”, and most recently the much-discussed “Global Repertoire Database” (GRD). Unfortunately, though, all have failed due to the commercial and governance challenges involved in creating a cross-industry resource, ultimately costing creators. The GRD started in 2008 and finally ended in failure in 2014, costing c.£15m, to little tangible benefit.

As I have written previously, I believe that competing stakeholders will always view any cross-industry initiative as a zero-sum game, and this is only exacerbated in an market as consolidated as music . The importance of the output is clear, but it is trumped by the need to maintain market dominance. It’s not anyone’s fault, just a logical outcome. The problem is that it’s almost impossible to achieve consensus on the governance and commercial decisions that underpin the resulting centralised database. Who decides what goes into it, who pays for it, and who decides what’s right when there are disputes.

Regulation could be used to push things forward, but we’re talking about an increasingly global industry, which falls beyond the remit of nation states. Private and public sector groups within the US are pressuring for the creation of a central national database, but it’s an ugly fight, and one that even if successful will result in a slightly better view of one country’s music copyright ownership. ICE is doing great work to try and build something similar in Europe, but the same issues are going to emerge when we try to collate it all together for a global view. Let’s be clear, these efforts are a positive sign for the industry, and can be seen as proof that stakeholders realise the value of a more comprehensive view of rights, however, ultimately, there will remain a need for a comprehensive, global, view on top.

So how can we do better?

Clearly we need a better process for capturing the information around creations going forwards. But we also need to find a better way to represent everything that’s happened in the past.

This is part of the reason why we’re investigating the potential for public blockchains as a system for aligning the incentives of competing parties towards this common goal. A decentralised network.

At their core, blockchains are consensus machines. If they’re designed right then they reduce information asymmetry and encourage participating agents to agree on a shared state. In the bitcoin blockchain, that shared state is who owns each bitcoin. In KORD, in this context, it will be who owns each music copyright.

We need to find a way that allows everyone that can improve the network the opportunity to do so. And motivate this behaviour through protocol rewards. We also need to design governance mechanisms that work at a local and network level, for the largest and the smallest stakeholders, incentivising towards the goal of KORD: the most comprehensive and accurate picture of ownership.

Let’s be clear, this is not going to be easy. There’s a lot to do with regards to proving the value of this system vs. one that works well enough to support the current industry in its current state. Most blogs like this start off with some flippant comment like “the music industry is broken…” which clearly isn’t true. There’s never been a better time to be a consumer, and rightsholders are returning to pre-internet music levels of revenue.

If we’re going to design a new system then it needs to address the harms currently present, whilst setting the future industry up to provide the maximum possible value for stakeholders on both sides of the fence. And this is why we need as much help as possible, from everyone, to get this right.

Learning from other industries

One of the beauties of blockchain development, especially when it evolves in an open source environment, is the power of idea propagation. We’re focusing our fire on the challenges in the music & media industries, but the underlying primitives are far more general than that. Likewise, teams that are set on tackling the banking, healthcare and artificial intelligence industries are encountering similar barriers and testing innovative solutions to hurdle them. We’re all constantly learning from each other, maximising our chances on finding a solution.

It also really can’t be overstated how much resource is being poured into developing blockchain solutions across pretty much every single industry that you can think of. Much is spoken of the meteoric rise in value of cryptocurrencies, but I’d argue that there isn’t enough attention paid to the effect that this having on the progress of development behind the scenes.

This is why open source mentality and collaboration are just so important for building the future. This is very much a team effort, where the focus has to be on listening, learning, and experimenting. We’re building common infrastructure that is designed to lower the barriers for engagement and understanding. The result of this will be a maximised opportunity to anyone to be able to come in and build cool stuff in the future.

Progress

We recently announced details of the pilot that we’ve been running with some of our biggest supporters to date. Building out the first attempt at a blockchain enabled aggregated view of copyright ownership, and ideas for scalable licensing mechanisms.

It’s been an incredible experience to gain validation against some of our assumptions, but this is just the beginning. We’re now in the process of moving to the next phase and would love to speak to anyone who thinks they may be able to help. We’d love to speak to you on twitter, slack, github, or email us directly.