Pubblichiamo l’intervista in lingua inglese rilasciata dall’Avv. Deborah De Angelis al Dott. Wolfgang Senges, Chairman della sessione “Blockchain in the Music Industry”, tenutasi in occasione del Blockchain Expo Berlin dello scorso 2 giugno.
WS: Projects dealing with Blockchain in music business mainly aim at the structural and technical implementation. But can Blockchain be implemented practically with no obstacles? Do you think there is a demand for further research? If so, in which field or on which topic?
DDA: I can answer this question from a legal perspective. There are still some obstacles in the structural and technical implementation of Blockchain in the music business.
– For signed authors and artists there is the need to renegotiate agreements:
a) Individual agreements with publishers and/or labels;
b) Agreements with collective copyright organisations; alternatively, for this last case, artists can exercise the right to limit the collective intermediation for the digital rights, in order to exploit, at the best stage, the direct licensing (with blockchain implementation);
– Metadata: A compatible, correct and shareable metadata is needed. One of the crucial problems is the lack of a uniform code for the music industry to identify the protected works, rightsholders and, in general, all the information regarding the ownership of rights and the rights granted.
There are different national music rights databases, such as the U.S. Copyright Office databases and the Collecting Society/PROs, often they are fragmented, incorrect and not updated.
But I believe that On-Line Music Initiative will succeed in its intent to create an open-source digital architecture or protocol to share information of each work.
– Limitations also are based on the problem of tracing of a digital file, because of its changeability and the easy fingerprinting and watermarking circumventions, as the result of the digital medium’s features. But it is also a cultural problem, that has to be addressed.
– Digital identity protection- to secure personal profiles for operating with a blockchain wallet, where who takes the token can manage the transactions only; the problem is the overcoming of the legal rule on one side and the lack of trust in absence of a neutral Certification Authority, on the other. Anyway, the immutability of the transactions, that cannot be rewarded, but stay traced in the blocks, is a trusted quality.
– Smart contract: to stimulate the automatic execution of the licenses, and in particular, CC Non-commercial Licenses.
WS: What are the main disadvantages in Blockchain? What is the core risk in introducing the Blockchain concept into the music business?
DDA: This question has different answers dependently on which side it is seen, considering the different stakeholders’ position:
– Creator’s side – Digital fingerprinting can certify attribution rights but how to protect the moral rights, if in the smart contract it is no longer possible to prevent contractual execution once the music file is inserted in blockchain and the file is used in violation of the honour and reputation of the author? (e.g. synchronised with a porn video or different political ideas). One solution could be the proof of ownership in case of dispute as suggested by Benji Rogers of Pledge Music. With a distributed ledger the information on the blockchain would be updated instantly and automatically; the same information would also be available to all users rather than stored in discrete databases.
– Fan’s side – I don’t see actually risk for fans but only advantages.
– Collective Societies’ side (see next answer).
WS: When inventing Blockchain, which consequences may PROs / Collection societies have to face?
DDA: To be at the level of music market technological evolution, PROs / Collection societies may decide to implement blockchain as collective management system: to aim at transparency, proportionality and democracy.
It could represent the loss of control by PROs / Collection societies on the copyright management system. It could oblige them to share fees directly to the proper rightsholders and to quit all the indirect and not proportional sharing of fees due to their members.
PROs / Collection societies have to be ready to hug the new method for creating a fully distributed digital currency system by cryptographically chaining blocks of data together.
SACEM, for example, is taking part of the Open Music Initiative, launched by Berklee, together with Universal Music Group (OMI), others are starting to be curious.
WS: Blockchain represents a disruptive concept. Which options do you consider best to successfully prepare for stakeholders in the music business in general, and for PROs/collection societies in particular?
DDA: It is necessary to spread the knowledge about the technology and its adaptability in the music industry. In Italy, for example, there is not an actual application pilot of blockchain in the music industry yet, but stakeholders and PROs/collection societies are starting to be curious about it. Implementing the execution of smart contracts as Creative Commons licenses NC could be good for creators and fans.
WS: Are members and customers of PROs/collection societies likely to prefer licensing directly via Blockchain or Third Party Blockchain services at least? May this result in a setting in which structural changes within PROs/collection societies are not sufficient? Can a re-shaping of the business model of PROs/collection societies be the ultimate solution?
DDA: I think the answer to the first question is positive since authors and fans are willing to fairly reward creators of their work with a proper fee. They are tired to fight to let the creators receive a fair compensation useful to maintain the will to create again. I believe also that a change of the business model of PROs/collection societies is needed, starting from the way their database is structured (e.g. no work by work licensing model are allowed since PROs/Collecting Societies database are based on creator’s name.) A re-shape of PROs/collection societies business model it is needed, as I said before, especially for the licensing, collection and sharing of digital rights management, which is still really thin.
WS: Which infrastructure, and which set of methods do you consider as the best strategic approach to implement a widespread and deeply rooted Blockchain concept in the music business?
DDA: Different entities need to come together so that new standards can emerge in the music industry.
Blockchain implementation aimed at solving a specific problem, as far as infrastructure. There are few pioneers I have seen interesting based on white paper combined with the new FTP technology (IPFS is the Distributed Web A peer-to-peer hyper media protocol). Based on this protocols few entrepreneurs are experimenting such as Resonate, Musicoin, Muse, Pledge Music, Bittunes and Ujo, to mention few of them.
Having said that above and to conclude, I believe that the blockchain concept it will save the record business from imploding since authors and creators have been starving for a while now and big companies plus service providers have been making money with business models, using music as content, but without giving the contents the right rewards (this could also happen because the PROs were not aware how to trace the use of content for the digital technology). At that time, when digital rights started to be exploited, the hardware computer industry needed a change to make it profitable, it needed music at a cheap price in order to fill up the GB of data, contained in the smartphones and hardware of our computers. Now, it should arrive the time to democratise the digital music industry recognising the authors and artists’ right to receive a fair remuneration.