This MBW op/ed comes from Ran Geffen (pictured), CEO of Amusica Song Management in Israel and founder of OG.studio, an extended reality content and business development agency facilitating transitions to web3.
Music companies have demanded that Twitter license music fully.
But, as the platform’s potential new owner, Elon Musk won’t play the music industry’s game – instead, the music industry must play his.
Having said that, a Musk music DAO initiative (let’s call it MuziX, considering Musk’s branding history) could actually be the answer to their plea: it would be a blockchain-based, decentralised copyright management and licensing platform that would democratise the way music is licensed.
The big potential losers should Musk decide to wade into the music biz? Collective rights management organisations and, by proxy, their respective members. To survive in Musk’s world, they must be the architects of their own (current) demise.
Let’s take a closer look at Twitter’s position in the landscape in a music business context: It is a gathering space where musicians interact between themselves and their fandom, and where web3 music projects are launched and managed.
It was labelled by the IFPI as “a significant concern to the music industry” in its submission to the European Commission, and PRS CEO Andrea Czapary Martin urged the company to “take responsibility for the music they share with millions of people around the world”.
Twitter’s response was, “We’re always looking at ways in which we can support our creator community.”
Now let’s take a closer look at Musk.
His TED Talk about the future gives a good insight into the way he thinks and operates. His primary interest right now? AI. It took time for the AI of autonomous cars to learn how to use roads designed for humans.
It had to understand and mimic human vision and interaction. Optimus, Musk’s humanoid AI robot, also needs to understand humans in order to interact with them.
Twitter is the perfect place to analyse human interaction based on short statements and reactions. Musk would magnify this interaction by allowing his users to see if the algorithm changed any given tweet and suggest corrections. In short: Musk is turning Twitter’s customers into collaborators in his mission to improve human-machine interaction.
Hipgnosis’s Amy Thomson suggested the same solution in a recent MBW podcast – a global copyright database that is proofed by creators themselves. She also highlights the lack of transparency as a major problem in today’s eco-system. Transparency is the core of blockchain technology.
Tom Allen, of Curve Royalty Systems, gave a time frame of 10-15 years for the industry to adopt blockchain as a solution (giving self-driving cars as an example) and spoke about the scale and the high transaction fee on Ethereum.
Musk committed to rolling out self-driving cars next year. Processing music transaction would be a walk in the park for him. Transaction costs, which have been flagged as a concern, can be reduced by simply moving to a low-cost, reliable, green blockchain.
So, what would MuziX’s components be?
- A registry for all of the players in the music industry that would provide a unique international ID number and connect them to a dedicated electronic wallet that would give them an overview of all their assets and income generated across the music eco-system by type of use.
- An open database of music composition contributors with splits that are registered on the blockchain, and smart contracts that would set the terms allowing recording artists, DSPs or anyone else who wants to use the music to stream, sync or sample.
- A recordings management tool based on a registered composition attached to it that would register all the participating contributors – producers, performing artists, and session players – on the blockchain, and the terms allowing the use of a recording for any purpose.
- A digital vault of recordings that would include a demo of the new recording to complete the registration of the composition. The demo recording would be analysed via fingerprinting technology to ensure the composition is original and would enable sampling requests. The system would also allow uploading stems that can be used under the terms of the smart contracts and a fingerprint of the recoding.
- It would create the same for any visual/audiovisual work attached to a recording or any contributor.
- A switchboard that would connect all the data with API that would allow anyone who wants to use the copyrighted material personally or aggregate it to third parties under the terms of the smart contracts.
In this new world, songwriters and publishers would be at the centre of creation with the tools to dictate the terms under which their compositions could be used. The recording artists and master owners would be able to set their terms as well. Creators could get an immediate license to use stems to create new work and new income for the original creators.
The same goes for AI music creation tools that could give fandom access to license elements from music they like. Freedom of creation, transparency, and immediate compensation as set by music creators.
The infrastructure is already there, evolving and taking shape. Take a close look at the NFT music landscape, visit the websites, join their Discord channels, read their road map and white papers, talk to them and connect the dots. Streaming is the main source of income for artists and songwriters. As 80% of the artists on Spotify have fewer than 50 listeners a month, they need to make money elsewhere – in the web3 and NFT space, they can set their own rules and terms of engagement with their fans.
“the music industry is investing intensively in metaverse entities to try and gain a grip on current trends and pull them into line with the old world. Social media and streaming platforms are embracing NFTs as a commodity for sale and not as a utility to pay royalties.”
But, as things stand, PROs, major record companies and publishers are not a part of this equation.
Instead, the music industry is investing intensively in metaverse entities to try and gain a grip on current trends and pull them into line with the old world. Social media and streaming platforms are embracing NFTs as a commodity for sale and not as a utility to pay royalties.
(And by the way, I have spoken to plenty of web3 players, and they are more than willing to play ball with the traditional music industry in the right way.)
Musk can change this in a heartbeat and invite his fellow crypto-natives from the music industry – disruptive players such as the members of Song Guild of America (backed by Hipognosis, backed by Blackstone) and the other early adopters in the decentralized zone, to create a better place for copyright holders.
Musk did it successfully with the automobile industry, forcing them to develop electric cars. In his TED talk, he described this as an “act of philanthropy”. He can do it for the music industry. If he builds MuziX, they will come.
A mere tweet from Musk pondering such a venture could finally unite the music industry in a bid to save themselves… from themselves. The staggering amount of money that will be saved on IT development, data storage, and administration costs by the PROs, record companies, music publishers and DSPs could be allocated to better service their clients and redistribute wealth to benefit music creators. Remember, without writers and musicians there is no music business). The writers and their respective publishers (if any) own the PROs and the change must begin with them.
“PROs will have to become leaner. We do not need them to be these big, bloated organisations. Their role in this new world, if they want one at all, should be to get the best deal for writers through legislation and negotiation and, most important, education.”
In 1993, my first mentor in the music industry – Sam Trust, the legendary chief of ATV – taught me my first lesson in music publishing: “Go to the collection society, spit on the floor and don’t stop shouting until they pay you to shut up”.
A lot has changed since. The PROs have taken a giant leap to provide better service and transparency to their members. The problem is that they have done it separately. Why? Ego.
Ego has driven PROs to spend a lot of money recreating the same systems in territories around the world. From the GRD to ISWC and on, they have stumbled time and time again. ICE, SACEM and MINT compete and poach clients from each other, all at the expense of their members/owners. All of the above are not equipped to deal with the web3 space. Instead of creating an environment to support it, they are trying to shut it down, just as they tried with Napster.
PROs can continue to do the same thing and expect different results (Einstein’s definition of insanity) or have CISAC aggregate all the valuable information stored on their members’ systems and use it as a global hub for all of the collection societies – create their version of “MuziX” with their members as co-owners. If they don’t, other players will step in and will enable their members to license rights using blockchain technologies. Some of the players in the NFT music landscape are actively doing a great job preparing this infrastructure to support the likes of Alan Walker, as described in a recent MBW podcast.
PROs will have to become leaner. We do not need them to be these big, bloated organisations. Their role in this new world, if they want one at all, should be to get the best deal for writers through legislation and negotiation and, most important, education. It can only work if they work together and there are some good smart leaders across the music industry. Putting ego aside will enable them to take the right action.
As for Musk? Let’s see what happens if and when he tweets this to his community. Music Business Worldwide