Royalties, Metadata, and a Whole Lot of Distribution

On April 26, Spotify announced it acquisition of Brooklyn-based Mediachain Labs, a company which exercises blockchain technology, the method which backs the highly regarded currency of Bitcoin. What does this mean? A great deal of things.

In a short answer, this acquisition will assist in Spotify’s issues with artist royalties, as briefly highlighted in an earlier post. The company may now be able to adequately pay money where it should go, to the many people who have worked on the music itself.

In a much longer and complex answer, this acquisition is representative of a recent emergence of technologies in the music industry.

To start, blockchain (in a very loose description) is used to describe the decentralization of data, crafting an ongoing chain of information, resembling of blocks of data forming a chain. The most essential aspect about blockchain is the fact that the data which resides in each block cannot be modified – which is why it serves as the foundation to the bitcoin service which is strictly peer-to-peer transactions. In other words, these blocks exemplify that a transaction took place for a fact, as shown throughout the data chain. This data inclusion is similar to the idea of metadata, which is simply data which provides information about other data. Mediachain Labs in turn uses this decentralizing agenda to trace forms of media online back to their original creators, who are ideally individual users developing content. The company provides an example of how it managed to trace the original creation of a gif of the late David Bowie to the artist who developed it, after the gif was spread throughout the internet, losing its crediting.

So what does this have to do with Spotify and streaming music? Metadata, within music files, entails information on the audio files themselves – basic identification such as the name of the song, the artist, the album’s name, the year, and so on, all included on the file. However, when millions of files are hosted by streaming services like Spotify, it becomes increasingly difficult to provide the necessary payments for every producer who helped develop the music. That metadata along does not suffice for every party that deserves royalties, leading to issues such as Spotify’s recent fight with the National Music Publishers Association (NMPA).

In fact, earlier in April, the music collecting societies of ASCAP, SACEM and PRS for Music, announced their plan for a “blockchain-based technology project” to develop a decentralized music database inclusive of metadata useful for “tracking capabilities. Similarly, the Open Music Initiative (OMI), which stands for the rightful compensation and crediting of artists, which is also in collaboration with over 100 organizations such as UMG, Sony, YouTube, and Spotify, recently announced its initiative to use blockchain technology to share data.

Blockchain-based technology is slowly proving to be significant in the music industry. It is essentially the revolutionary way for every contributor to get paid. There is an emergence of startups which focus on this technology, in efforts to get royalties to where they need to go. A prime example would be the company, Dot Blockchain which focuses on providing transformative metadata for music files as opposed to the apparent “obsolete” common files we use today, such as mp3. and wav. The CEO emphasizes the creation of a new file format, BC., which would be embedded with metadata that will include every creator on the track, which would be unalterable, similar to the concept of data in blockchains.

While this concept is similar to an idea expressed in a previous post about Stem Disintermedia, it is completely unique as it details the convergence of an interesting technology into the industry. What makes this technology even more intriguing is how it ties into music distribution. DART, short for Data Assets Repository and Tracking system, is an example of a company which is using this idea of metadata for music distribution. To make it more interesting, the company focuses on classical music, as it works to both providing royalties for classical artists and composers, and helping find digital marketplaces for classical music, especially considering how bias the platforms are towards popular and mainstream forms of music. The company intends to identify and distribute definitive data which is informative of different audio files, which not only help provide accurate royalties but also provides a more transparent and strong relationship between the artists and the consumers, something which ultimately depends on how the data itself.

In the end, it all comes down to distribution – how royalties can be correctly distributed to artists, and more importantly, how music can be distributed to its fans. It is important to end on this point because the royalties come from the listeners. How can artists effectively get their music across effectively, especially those who cannot exclusively release their albums for streaming? An interesting answer would be the fairly young development of DistroKid, a music distributor. In short, this extremely small service (small as in run by basically one person) serves a medium between artist and consumer, as, for a flat fee, it releases independent artists’ work throughout streaming platforms with 100% of royalties going towards the artist. The service has subsequently been used by Ludacris, and DJ Jazzy Jeff, as they have been more than content with the result. The CEO, in his description of the service, gave a rather insightful point: “musicians at all levels increasingly have access to the same platforms used by the most successful artists in the world.”

The idea to grasp from this is that music technologies today are changing how artists can control their music, in addition to the incessant developments within the music industry. These developments are showcasing just how fragile the music industry is. For artists who look online for assistance in their growth or revenue, these developments show just how easy and helpful it is becoming. It appears that the distribution and maintenance of the content itself is rapidly changing while also showing just how chaotic the industry is as of now. These developments could be permanent changes or wreak a forceful crackdown on methods that threaten traditional methods. Either way, there will be incredible developments to come.



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