The New Kids on the Blockchain 1

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The New Kids on the Blockchain 1 ISSUE 407 | 26 JULY 2017 Contents thereport 16–17 Beyond Music – TV 18–19 Need to know 20 Data dive: SoundCloud 21–22 Country profile: Norway Block ‘n’ roll The new kids on the blockchain 1 ISSUE 407 26.07.17 COVER FEATURE Block ‘n’ roll The new kids on the blockchain very music industry conference Definitions aren’t hard to find. We has its blockchain panel. Every liked lawyer Sophie Goossens’ take Estartups contest or accelerator has at Midem: blockchain as a database its blockchain company. Every discussion maintained collaboratively by a number about the future of our industry alights on of participants, with a “consensus the blockchain sooner or later. mechanism” used for agreement on how There’s a risk of people getting to update that database, and complex blockchained out, which is simultaneously cryptography to ensure that agreed understandable yet bizarre, given how modifications are made unchangeable. early we are in the process of figuring out (We’ve seen this boiled down even more what blockchain technology means for to “a public, distributed ledger” or more music, let alone actually doing it. questionably, “like Excel spreadsheets, but It’s just two years since Berklee more secure” – suffice to say, 10 minutes College of Music’s Rethink Music initiative Googling will bring you up to speed, along published its Transparency & Money with related concepts like smart contracts, Flows In The Music Industry report, which Ethereum and initial coin offerings – ICOs.) included, among its recommendations, A more important point: blockchain “the investigation of blockchain It’s become easier to sort the is an underlying technology, like the technology and cryptocurrencies to internet. Understanding its core workings manage and track online payments hype from the genuine potential is, arguably, about as necessary as being through the value chain directly from fans of this technology” schooled on the internet’s Transmission to music creators”. Control Protocol/Internet Protocols That was the first time many people in And yet… 2017 feels like quite a embracing people and ideas with real (TCP/IP). the industry heard about blockchain healthy time to be talking about substance. Experimental pilots are up and It’s what people are doing with it technology; but in the months blockchain. As more people running; partnerships are being forged; that counts. There is no such thing as after that report, if you were within the industry have and the various uses that blockchain can a standard “blockchain music startup” still trying to get to grips gone to panels, read up be put to are being mapped against the any more than there is an “internet with what that technology on the workings, talked actual problems that the music industry music startup”. was and how it worked, to startups and thought faces – some of its key failings included. Some of these companies are working even as in some quarters about the implications, We can’t allow ourselves to become on Bandcamp-style D2C platforms for it was being loudly it’s become easier to blockchained out: we need to keep talking artists, while others are Spotify-style evangelised as the latest sort the hype from the about all this stuff. Part of that involves streaming services. Some are trying to industry saviour, it was genuine potential of this getting beyond the ‘I don’t know what crack the age-old industry problem of a report hard not to succumb to a technology. blockchain is or how it works’ issue. And global database of rights, while others blend of defensiveness and The industry is more able not just because that’ll free up a good 10 hope to encode those rights into the cynicism. to call out blowhards while minutes on those conference panels. music itself, akin (although this can be a the 2 ISSUE 407 industry should be doing about it are full 26.07.17 COVER FEATURE of sparks. That’s a good thing, and we can learn controversial point) to a DRM wrapper. as an industry from every element of And these are just the ones we have blockchain’s philosophical spectrum. obvious existing non-blockchain examples Many of those ideas being touted by the to compare them to. purists, which might seem unworkable, One of the hopes for blockchain nevertheless shine a light on some of the technology is that it will provide the base failings of music’s current value chain. for a whole bunch of new startups that The blockchain also reminds us we can’t conceive of yet. Trying to predict that many of those problems aren’t them in 2017 is like standing up in 1991 at technology-related puzzles, but are more the dawn of the world wide web and trying about the disorganised and sometimes- to predict Facebook. squabbling humans putting the data into The key thing is to engage with this the system in the first place, whether world, which is what music:)ally has been those systems are legacy software or doing for this issue of our report. We’ve shiny new blockchain-based databases. talked to eight people or companies from If music:)ally had to boil down the the blockchain space, not just to find out advice we’d offer to the music industry on what they’re doing, but also how they see blockchain, it’s this: take every meeting the world. with startups in that world; read every That’s hardly definitive: there are article about it; go to the conference many other companies and people we panels, even if their description feels a bit could have also talked to – and will in same-old; and talk about this technology the months ahead. But it’s a snapshot of and these ideas to anyone who’s ideas: what’s happening now and what Blockchain purists foresee – and indeed interested. this technology could lead to in the are already building – a world powered by But also: when you interact with people future. smart contracts; where music (or access from the blockchain world, ask the hard Some conclusions we’ve drawn to it) is paid for in cryptocurrency; where Blockchain pragmatists aren’t questions, and ask what may feel like already: it’s important to understand that artists are in full control of their rights; trying to replace the middlemen: stupid questions, but which often turn out blockchain provides not just a spectrum and where everyone gets paid instantly they want to partner” to be the hardest and best questions to be of technologies, but also a spectrum of for usage of that music, according to their asking. philosophies. rightful share. What problem are you actually solving? It runs from what we’ll describe as Blockchain pragmatists aren’t trying behind them – they are just as excited Is there really a business in this? Who is ‘purists’ at one end to ‘pragmatists’ at to replace the middlemen: they want about that future, but they think it may this creating value for other than yourself? the other. Purists are the most exciting to partner with those entities – again, take longer to realise, and that there is Does this need to be on the blockchain at evangelists for blockchain, but also the collecting societies in particular, but good work to be done in the meantime. all? most intimidating for many in the music also publishers – to solve their problems, Across this spectrum there are The startups that have legs – the ones industry. particularly around bad metadata and its forthright characters with strong opinions. that will have a meaningful impact on These are the people and companies knock-on effects on royalty collections. While shade-throwing about which the future for musicians and the music who believe that blockchain could You don’t have to be in one camp or startups are and aren’t ‘proper’ blockchain industry – will be able to answer these report automate many of the music-industry another: in fact, a lot of the blockchain can feel a bit ‘death to false metal’ from questions. Blockchain music startups middlemen out of the value chain – pragmatists admire the projects being the outside, the debates about what aren’t so different from non-blockchain collecting societies in particular. built by the purists and the concepts blockchain is good for and what the music music startups in that regard really. the 3 ISSUE 407 26.07.17 COVER FEATURE BLOKUR: “THE TECHNOLOGY ON ITS OWN IS NOT THE WHOLE PICTURE…” A reminder that the Venn diagram of ‘music people’ and ‘blockchain startup people’ is not a pair of separate circles. Phil Barry, founder of British startup Blokur, was a professional artist making electronic music as Mr Fogg before setting up his own independent label. Barry went on to lead the team of consultants working on Thom Yorke’s 2014 project to release his Tomorrow’s Modern Boxes as a BitTorrent bundle, before 2014 after £8m (at least) of investment – founding blockchain startup Ujo Music, have highlighted the difficulties involved. overseeing its work on Imogen Heap’s ‘Tiny Although it’s also fair to say that those Human’ project. challenges were not just about technology, A parting of the ways with Ujo followed, manager at Universal Music Group, and but about the interplay between the with Barry founding Blokur to continue that head of business development Emma collecting societies involved. work. He stresses the company’s desire to McIntyre, former head of music publishing “It’s based around bridging the “The technology on its own is not be as down-to-earth as possible. partnerships at 7digital. siloes between different sources the whole picture.
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