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How Blockchain And Cryptocurrency Can Speed Up Spotify International Publishing Royalty Payments To US Songwriters

cryptocurrency and music

There’s been a lot of talk about applications of blockchain technology and cryptocurrency payments in the music industry. In fact, there isn’t a single major music industry conference that doesn’t dedicate some programming to related topics. There are several projects and startups currently underway to address licensing, discovery, attribution, remuneration and more with blockchain, smart contracts, and cryptocurrency.

For those of us who aren’t blockchain developers, simply keeping up with the many applications of blockchain in the music industry is the closest we’ll get actually knowing how this all (could) works.

I’ve been thinking about how blockchain and cryptocurrency could speed up the process of paying U.S. songwriters, who wait upwards of 1.5 years to get paid for the use of their songs on Spotify outside the U.S.

The current state of the flow of international publishing income to U.S. Independent Songwriters who own their publishing and use traditional publishing administrators to collect in the U.S. is quite depressing.

As an example, Tommy released a song on Spotify in January 2018. In the United Kingdom, the song earned $100 “publisher share” Spotify UK digital public performance royalties.

Here’s the breakdown:

START: $100 “publisher share” of Spotify UK digital performance royalties in January 2018.

1. PRS collects Tommy’s publishing income in the UK ($100) in January 2018.

2. PRS retains 10% admin fee and remits the balance ($90) to ASCAP in October 2018.

3. ASCAP retains 12% admin fee and remits the balance ($79.20) to the Publishing Administrator in February 2019.

4. Publishing Administrator retains 20% admin fee and pays Tommy ($63.36) in July 2019.

END: Tommy is paid $63.36 for his Spotify UK “publisher share” income (earned $100) after waiting 1.5 years and experiencing a reduction of 37% of his royalties. Imagine $1,000 reduced to $633.60 or $10,000 reduced to $6,336.00.

Had Spotify used blockchain technology to dynamically identify Tommy as the rightsholder in his song and paid him instantly at the close of the month with cryptocurrency, Tommy would have already spent his $100 on studio time!

5 Ways The Music Modernization Act Could Be Fairer To ALL Music Creators

music modernization act

 

Today, the Music Modernization Act has passed the U.S. House of Representatives with a unanimous 415 – 0 vote (16 reps abstained from voting at all).

The mega bill — which consists of a bundle of Titles that were previously independently proposed bills — will change the way in which musical works are licensed by digital service providers and provide a safe harbor for infringement under a blanket licensing mechanism (Title One – Musical Works Modernization Act); it will bring recordings made before 1972 under federal copyright protection (Title Two – Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society Act or CLASSICS Act); and it will codify an allocation of digital radio royalties to music producers and sound engineers (Title Three – Allocation for Music Producers Act or AMP Act).

On its surface the MMA sounds amazing, when summarized this way.

Accordingly, the passing of the MMA in the House was widely praised by executives from the most recognizable U.S. music rights organizations and trade associations (e.g. NMPA, RIAA, DiMA).

However, there remains many uncertainties in the language of the bill presenting an opportunity for the Senate to course correct before the bill becomes a law that would take over 20 years to improve, again (the Digital Millennium Copyright Act was the last piece of legislation impacting the music business — it was enacted in 1998).

 

Also read: I Was Interviewed By The Congressional Budget Office Regarding The Music Modernization Act, And Now I’m Even More Concerned For DIY Musicians

 

So, what could the Senate do to make the bill more fair to the tens of thousands of music creators who are not represented (or underrepresented) by the industry sponsors of this bill? Well, there’s at least five issues that can be addressed immediately:

  1. Ban the practice of distributing by market share unclaimed royalties that rightfully belong to DIY musicians and songwriters.
  2. Mandate that record companies provide complete and accurate (at the time of release) publishing information for each track within the metadata delivered to distributors/aggregators, and that the latter provides that information to DSPs.
  3. Do not expunge all past copyright infringement claims, only future claims upon the date of the enactment of the law.
  4. Maintain a representative MLC board of 50% publishers and 50% songwriters (with at least 1 unsigned songwriter on the board (e.g. Chance the Rapper)) as opposed to the BS 10 publishers, 4 songwriters (who’ll likely come from the major publishers anyway) that has been written in the bill.
  5. Respect the Berne Convention by not disregarding the musical works of non-US songwriters who have not (and will not) register each of their songs with the USCO or MLC.

How else could the MMA be improved? Or do you feel that it is fair enough? Let’s discuss in the comments.

[Podcast] Copyright Clearance Center Adds Recording Of “View From The Top: The Future Of Machine-To-Machine Rights Management” Panel Discussion From RightsTech Summit 2017 To Its Beyond The Book Podcast

rightstech summit

“View From The Top: The Future Of Machine-To-Machine Rights Management” panel at RightsTech Summit in New York

rightstech summit

Left to Right: Dae Bogan (CEO, TuneRegistry), Benji Rogers (CEO, dotBlockchain Music), Michael S. Simon (President of Rumblefish & CEO of Harry Fox Agency), Michael Shanley (Vice President of IT Business Development, Music Reports)

Machine-to-machine communication is the ideal scenario if we want to enable on a global scale, with as little friction as possible and at a reasonable cost, the licensing of works and the payment of royalties to rightsholders.  That at least is the stated premise for a recent discussion at the annual RightsTech Summit conference.

But how far have we come?  How close are we to achieving a digitized business environment for rights and royalties that is as fully realized as we see today in media distribution and consumption? Until code entirely does away with contracts will human beings will continue to add a value that no machine ever can?

“I think all of this starts with a human being. No matter what technology we apply to these systems, if a person doesn’t know how to interact or create the data that they need to disseminate, it’s just not going to get there,” said Michael Shanley of Music Reports. Technology evolves all the time, and I think we’re getting to great places in technology.  But education and information is, I think, paramount.”

Panelists for the session moderated by CCC’s Chris Kenneally included Dae Bogan co-founder & CEO of TuneRegistry, a music and rights metadata management platform; Benji Rogers, a British-born, New York-based entrepreneur, who co-founded the Dot Blockchain Music Project, an attempt to create a de-centralized global registry of music rights using blockchain technology; Michael S. Simon, President of Rumblefish, a world leader in music micro-licensing and YouTube monetization and also CEO of the Harry Fox Agency LLC, the nation’s leading provider of rights management, licensing and royalty services for the music industry; and Michael Shanley, Vice President of IT Business Development at Music Reports, developers of proprietary databases and software applications that facilitate music rights administration.

Listen here.

podcast

ETLA, The Research Institute Of The Finnish Economy, Publishes Report On State Of Digital Music Infrastructure – Calls For Transparency And Addresses “Black Box” Issues

etla-digital-music-industry-background-synthesis

I had the honor of being interviewed by researcher and author, Derek Sellin, for his industry report “Digital Music Industry – Background Synthesis” for ETLA Working Papers No. 48, published by Elinkeinoelaman Tutkimuslaitos – The Research Institute of the Finnish Economy.

Black boxes materialize for many reasons, including but not limited to: the inability to identify rights holders despite payments made for the use of their compositions; the lengthy time required for filing domestic and ultimately international copyrights, often begun only when a recording is actually released; multiple claims for the same rights exceeding 100% of ownership, resulting in indefinite disputes; international collaborations with less than all creators asserting their rights; international legal inconsistencies regarding what type of performances result in payments (most visible in the fact that radio play does not generate royalties for recording artists in the United States); and the slow and often manual processes to report usage and clear payments under international reciprocal agreements. – Dae Bogan

You can download the report at https://www.etla.fi/en/publications/digital-music-industry-background-synthesis/.

About ETLA
The Research Institute of the Finnish Economy (Etla) is engaged in applied economic research with emphasis on topics that are important from the Finnish point of view. The main focus is on issues that relate to productivity and drivers of its growth, to the functioning of the labour market, as well as to challenges in maintaining a balanced macro economy including sound public finances. Etla monitors economic development, compiles forecasts as well as assesses economic policy and comments on it.

Etla is a private non-profit organisation. Its operations are backed by the supporting association, the members of which comprise the Confederation of Finnish Industries and the Confederation of Finnish Industry and Employers (TT) Fund. The funding from the background organisations covers more than a third of the institute’s budget and forms a solid base for its operations. Read more.

Breaking Bread, Giving Bread Crumbs: The Challenge Facing Beyoncé, Drake, And 150 Other People

Beyonce and Drake

Between Beyoncé’s “Lemonade” and Drake’s “Views” albums, there are over 150 writers and producers credited across their combined 32 tracks.

I can only imagine the music compensation nightmare that will ensue over the next 12 months as streaming, DPD, and airplay royalty checks start to go out to the multi-national team of creators and rights holders.

Who is responsible for ensuring the accuracy of rights holder information across all tracks? Who is checking that digital music services have complete metadata to match sound recordings to their underlying compositions? Who is accounting to the background vocalists and session musicians?

Did every producer and engineer secure letter of directions from Beyoncé and Drake to properly claim a portion of Pandora payouts? Who is looking after the contributors who do not have multinational publishers? Will they capture their piece of neighboring rights, DART royalties, or Spotify mechanicals?

Who will lose out due to inefficiencies? Who will have money left on the table due to an inability to properly claim and collect?

These are the questions that we ask ourselves at TuneRegistry and why we’ve built the next-generation music rights & metadata management platform to empower creators and rights holders.

Lukas Graham And Digital Music’s New Fan Conversion Funnel

Lukas Graham

Screenshot of Lukas Graham’s self-titled debut album cover art posted on Lukas Graham’s Facebook page; accompanied by the comments section.

The image featured above is a screenshot of a post on recording artist Lukas Graham‘s Facebook page. This blog entry is about the idea of the Digital Music’s New Fan Conversion Funnel as illustrated by a comment posted in the comments section by Lukas Graham fan, Stacy Angus.

But first, a quick crash course on conversion funnels.

Read More…

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