If you’re in the music business or hanging around the music business, you’ve probably heard about blockchain—an emerging technology that has taken on near-mythical proportions in the minds of many.
What is blockchain? Well, at its most basic, it’s a decentralized, open database that records transactions in a ledger comprising “blocks” of information. Most people associate blockchain with BitCoin, a cryptocurrency that has inspired plenty of breathless reporting. But blockchain doesn’t have to be married to invisible Internet money. It can ride on top of the aforementioned ledger like a smart database that works in any digital environment.
If that sounds like a whole lotta ‘bot talk, we understand. But it’s probably a good idea to get better acquainted with blockchain, because we think it’s going to power a great many services and processes that are currently slow, inefficient and prone to fraudulence.
Slow, inefficient and prone to fraudulence? Sounds familiar. But instead of complaining, let’s crank up the speakers and fix some stuff. There are currently a lot of smart folks trying to figure out ways that blockchain can resolve the music industry’s longstanding issues with transparency and accountability. Just weeks ago, Imogen Heap partnered with developers Ujo and Etherium to release what appears to be the very first song on the blockchain. That was kind of like the moon landing for music tech-nerds. And there are many more experiments forthcoming.
What do punk rock, journalism and the compact disc have in common? It’s become weirdly popular to loudly, and falsely, proclaim that they’ve met their end.
“CDs are dead!” howl the media pundits. “Vinyl is more important! Streaming is the new torrenting! Burn your outmoded discs in a trash fire!” It’s a cliche rapidly approaching peak hysteria, and even big news sites like CNN, Huffington Post and the Smithsonian are in on the action. But is it really that simple? read more
“This industry really has to get its shit together not only to generate revenue, but to get money to those people who actually need it and deserve it,” Casey Rae, CEO of the artist-forward nonprofit Future Of Music Coalition, said at the opening panel on transparency and its relation to money. He then noted that the music industry had three flavors of transparency to grapple with: Structural, or the understanding of how services generate and pay out royalties; deal and terms transparency, which examines how contracts lay down the terms for music’s use and compensation; and repertoire, which deals with the data and information management systems that track the consumption and usage of music.
In February 2014, 19 Recordings—a record label representing artists from the TV show “American Idol” like Kelly Clarkson and Carrie Underwood—sued Sony Music for allegedly withholding royalty payments totaling $7 million. In March of this year, U.S. District Court Judge Ronnie Abrams issued a ruling allowing some of these claims to go to trial. The upshot is that, while some components of the case will move forward, the court decided that others don’t hold water. Even more recently, Sony swung back with allegations of fiduciary mismanagement at 19.
As expected, Apple announced its forthcoming music streaming service on Monday at its annual WorldWide Developers Conference. The service is scheduled to launch at the end of June, and naturally, our primary focus is on how the new offerings will impact musicians. The presentation was short on details, but here are some of the questions we’ve been wrestling with (and some partial answers)
Let’s say your metal band is playing a headlining club gig. At the end of the night, the promoter hands you an envelope containing $200. Is that a fair share?
Or say you’re a R&B singer with a CD released by an independent record company. Your label sends you quarterly royalty checks, but how do you know if the amount is correct?
Or imagine you’re the composer & lyricist of a popular country song that gets played on an on-demand streaming service. You get regular checks from your performing rights organization (PRO) for this use, but how do you know if the rate you’re getting is fair compared to what other songwriters get for plays of their songs?
Yesterday, on-demand music streaming service Spotifydid something pretty big by explaining in detail how it calculates and pays out royalties to rightsholders. With so many music industry pundits and practitioners in a tizzy about the economics of streaming, this move can be generally seen as positive. But as always, the devil is in the details.
It is certainly significant that Spotify took this step—probably long overdue—and we hope that it serves to increase the standard of transparency across the digital music sector. When a market leader like Spotify makes this kind of move, it can be a spur to other players to follow suit. However, it doesn’t really change much in terms of artist leverage on streaming on-demand services, nor does it impact most musicians and songwriters’ bottom lines. We spend a great deal of time considering this stuff—in fact, our own Kristin Thomson recently wrote a post for Music Think Tank about ways to make streaming music more viable for artists. (And if you need a primer on how the money flows on a variety of music platforms, check out these handy charts.)
Let’s say you’re approached by David Copperfield (it’s OK, don’t run!), and he asks you to be an audience plant for his next big televised spectacle. You’ll be privy to some behind-the-scenes secrets, and outing his magic as merely illusion could be a disaster for his career—other magicians will cop his tricks, his performances will lose their coveted mystique, etc. That’s no good. So to make sure you keep your lips zipped, he presents to you (pulled out of a hat, probably) a non-disclosure agreement. This is a contract that says your discussions regarding this particular event are strictly confidential, and if you go blabbing he can sue you for breach of contract.
Non-disclosure agreements (NDAs) in this context seem pretty straightforward, but what about all the NDAs that pervade the music industry? Why all the smoke and mirrors obfuscating the terms of agreement between streaming services and major record labels, or deals between aggregators/distributors and YouTube?
Last month, singer-songwriter James Taylor joined the long line of legacy acts that have sued their former record labels for withholding royalty payments, among other financial oversights. According to a 2007 audit, Warner Bros. Records underpaid Taylor by nearly $1,700,000 between the years of 2004 and 2007.
This kind of financial dispute is hardly new. The Temptations and Sister Sledge filed similar complaints (against Warner and Universal Music Group, respectively) earlier this year. The debate about whether artists should receive compensation as a “sale” or “license” for digital downloads has also garnered attention as a result of Eminem’s audit of his former label, Aftermath Records, wherein he argued that he should have been paid his licensing royalty rate of 50 percent — instead of his sales royalty rate of 12 percent — for digital downloads in the early days of iTunes.