Making your music your own

By Alexander P Hobbs

The year is 1930-something, and the characters are fictional. Three escaped convicts and a hitchhiking guitarist arrive at a radio station by the side of a dusty road in Tishamingo, Mississippi. One of the convicts bears a remarkable resemblance to George Clooney, but no-one else seems to have noticed. They enter the small, dingy establishment and negotiate a recording deal with the proprietor (a blind man who they swiftly take advantage of in order to get extra remuneration for non-existent members of their group) to ‘sing into a can’.

The Soggy Bottom Boys, before they were famous

The success that these particular (fictional) musicians enjoyed after their initial recording session (for which it’s very clear that they have not remotely prepared or even written the song but somehow it all comes together very nicely indeed) came as something of a shock to them, although it got them out of a tight spot. It is, however, not the average experience of a recording artist, in any century.

Most participants in a gig economy find that the freedom to pursue one’s craft can quickly wear thin, with the constant lack of job security and the amount of work and/or talent needed to get noticed diminishing the shine of the once-dreamt-of road to self-determination. This is no less so in the music industry. The talent and abilities of street musicians is often a regular revelation, and the success enjoyed by well-known recording artists and performers is less the tip of the iceberg and more the tip of the tunnelling electron microscope. The struggle to ‘make it’ normally gives way to the more realistic struggle to simply put food on the table.

I once knew an artist

It can be argued that art and music share many similarities. Indeed, the title of ‘recording artist’ makes it clear that the creative endeavour undertaken by the musician is one of imagination, beauty, and ultimately, emotion. Since the advent of recording devices, however, the art world and the music world have diverged in their notion of value. A song is recorded and made into many copies, all of which have some small value, but the original recording has no more value than the copies. An original piece of art, on the other hand, occupies an exhalted position.

These differences are the result of reproducibility. A photo taken of a painting, or of a sculpture, does not convey the same gravitas — the same sense of wonder, or appreciation of accomplishment — as viewing the original. With music, however, the pleasure derived from listening to the original recording is identical to that derived from listening to a copy. Of course, the vast majority of music lovers will agree that a live show is always the preferred medium — this cannot be copied, and remains the mainstay of creative performance. However, this just refers to the means of experiencing the music, rather than the music itself. A single IS the music, whereas the print of Van Gogh’s Starry Night Over the Rhone that is hanging on my bedroom wall is a print of the art, not the art itself. This means that, essentially, the ‘traditional’ music world has been on a different footing to the traditional art world since the invention of the recording artist.

One way to look at it is that recorded music is more akin to photography. Part of the purpose of the piece of ‘art’ is to be recorded for posterity, in a medium that allows for enjoyment by many. This is a truly wonderful concept that has been exponentially enhanced by technology, all the way from the early days of the gramophone to the digital downloadable MP3s that we use today. Often, however, the connection with the artist is lost because their control of the work is not preserved and their authorship is diluted (at least in a logistical sense).

Another area of contrast is the ability to stream music. Art typically cannot be streamed (and picturing that is an odd exercise, although the process of creating art can be livestreamed — which I realise is slightly confusing in the context of this paragraph) because the medium through which we tend to view it is still physical (a photograph framed and put on the wall, for example). That being said, with the advent of digital photo frames and similar devices, combined with the new NFT paradigm, one can see a reasonable route to a form of NFT art streaming via subscriptions.

The different footing that music has been on relative to traditional art has meant that it has been partly incorporated into the digital world, but this integration has not gone far enough. This incompleteness shows very clearly in the inefficiencies, extraneous manpower, and inequitable treatment of the musicians and recording artists within the music industry.

Lord protect my rights

The ‘sovereign individual’ is a term coined by the eponymous bestseller by James Dale Davidson and Lord William Rees-Mogg, which at the time was viewed as making many outlandish predictions, but which now seems rather prescient in predicting certain aspects of electronic warfare and smartphones that have since come to pass, the rise of online bots often indistinguishable from humans, along with — yes, you guessed it — Bitcoin (some 10 years before it was invented) and the cryptocurrency revolution in general. In their treatise on the ‘fourth stage of human society’, the authors present a compelling case for how transition from the industrial age to the information age will liberate the individual like never before, and substantially reduce the power of governments to oppress. It will, for the most part, be an age of far greater equality, as access to cyber resources is attained by those without the previous fortune to move in the exalted societal circles where access to traditional resources was dished out like the nectar of the gods.

The premise put forward here is centered around the emerging information society and its liberation of the individual from the nation state, with parallels to the rebellion against organized religion at the end of the fifteenth century. It is, however, predicted to be not without its struggles, with revolution, a rising tide of localized violence and reactionary nationalism threatening to make things worse before they get better (indeed it could be argued that we are already starting to see the latter two struggles play out in a number of nations around the world). But the process will be swift, and has the potential to empower any and all who embrace the ‘unveiling’ (the original meaning of apocalyptic, from the Greek apokalypsis) to achieve financial and social sovereignty.

Rights are fundamental to this concept of the sovereign individual. Our freedom and our ability to make our way in the world are predicated on fairness, autonomy and self-determination. That is not to say that we should not be beholden to laws that have been agreed upon by all and upheld by elected governing bodies — the concept of the sovereign individual is not to be confused with the more recent idea of a ‘sovereign citizen’ which seems to step very clearly over the line between individualism and anarchy. But the role of governments should be to uphold rights for the individual, rather than to exert control, and it is this that can provide the continued relevance of such institutions.

In a digital world, however, rights must be extended beyond the human party and into the data realm if they are to be upheld in a way that keeps pace with the incredible throughput of digital systems. In a true information society our identity has just as much to do with our data as it does with our physical presence. For example, a musician’s rights should extend to, and manifest in, the songs they create and record into a digital format. Currently, this has been implemented part way in the form of royalties to the artist that can be paid out on a sale, a commercial application (such as the use of the song as a backing track for an advert) or through a streaming subscription service. However, while each (legal) instance can be registered and tracked, the auditing and enforcement must still be carried out by people. Huge consulting firms that manage intellectual property, such as PwC and Deloitte, have huge backlogs of due royalty payments, in some cases stretching back 6 years or more. This mismatch between the traditional and the digital creates inefficiencies that cost artists their livelihoods, often preventing them from developing their passion and achieving their potential. If musicians are to be rewarded fairly, the concept of rights must be brought into the digital recording itself — into the data.

What does this mean, exactly? Data-embedded rights extends the concept of the sovereign individual to the sovereign file. This is a fundamental expansion of identity from the human world into the digital world. A file can be a full participant in a digital ecosystem only if it has an identity within that environment. To achieve this, the file has to hold the properties of uniqueness and programmability, and be recorded in a way that is immutable and persistent.

But royalties are only one piece of the puzzle. Musicians should also have a say in how their music is used. Maybe a band doesn’t want their new single to be used in an advert for a company with inhumane business practices, or perhaps a singer wants to ensure that secondary sales of her album occur only in countries where women are allowed to vote. This is obviously extremely difficult with the current system. Machine-readable rights are required in order to allow for an intellectual property ecosystem that rewards the artist and accords them the creative control that they deserve.

Long distance auditor

Spooky action at a distance’ is the phrase that Albert Einstein used to describe the theoretical phenomenon of quantum teleportation, something that was confirmed some decades later by experiment. While the idea of quantum particles being able to affect each other regardless of distance is indeed hard to get one’s head around, the really spooky aspect of the phenomenon is that the action is apparently instantaneous (seemingly in violation of special relativity, although actually not).

In systems that require human decision making, however (rather than in the quantum realm) nothing is instantaneous. Indeed, quite the opposite. For one change in a quantity (whether a physical, economic, social, or intellectual quantity) to affect the wider ecosystem there is always a (substantial) time factor present. This is especially true in verification and auditing. One of the big problems that the music industry has is arguably ‘auditing at a distance’ where the verification and implementation of the actionable terms of a contract are performed by human parties some time after the action was taken — for example, when a song is used as a backing track in an advert, the complex system of royalties is processed by third-party auditors sometime afterwards, and the rewards actually given out even later still.

A system where copyright and royalties are encoded into the metadata of the file (or the stream) would change all of this. Auditing would be in real-time, rather than at a distance, and it would be performed by machines (with human oversight only when absolutely needed — in case of dispute, for example).

Efficiency will become more important than the dictates of power in the organization of social institutions. (James Dale Davison & Lord William Rees-Mogg, The Sovereign Individual, 1997)

The shift to an information society will likely elevate efficiency as the means to achieve a greater share of the market, rather than traditional power structures. Those that embrace the raw might of machine-readable and -executable auditing (where every, say, 30 seconds you receive a royalty payment) will find themselves vastly ahead of the curve, and will find that their route to financial sovereignty through their passion is far shorter than expected (talent permitting, of course).

However, a vital aspect of an information society is, naturally, information. Blockchains are currently machine-readable but only for payments. Every entry on a blockchain resembles a gift, with tokens transferred but no record or accounting of the asset that was paid for. This means that the information being processed is incomplete, and cannot inform the algorithm tasked to perform the audit. Having a dual ledger architecture where both the asset (the .mp3, for example) and the tokens are featured would allow for real-time auditing with full access to the required information.

All along the IP chain

Probably the most logistically intensive and inefficient aspect of the music industry is assigning the appropriate intellectual property (IP) rights to every participant in the value chain. This challenge manifests not only in huge amounts of resources and man-power dedicated to the process but also in a reduction in the proportion of revenue allocated to those right back at the start of the chain — the songwriters and musicians.

The challenges of fair reward allocation in the music industry (Figure credit:

This reality is even more frustrating for musicians and recording artists when one takes into account the wide ranging remit of copyright in terms of economic rights (in theory):

Copyright includes economic rights which give the creator the right to authorize, prohibit or obtain financial compensation (in the form of equitable remuneration) for:

the reproduction of a work, for example, on a CD, online or in a film;

the distribution of copies of a work;

the communication to the public of a work. If a piece of music is performed in public or played over a sound system in a shopping mall or a disco, a royalty is payable to authors, performers and/or right holders according to the national legislation.

broadcasting or otherwise making available a work to the public (i.e. via radio, TV or online)

the adaptation of a work (if someone translates the lyrics of a song and wants to record these using the same music as that of the original song, or changes an original work adding new elements to it, they first need to get authorization from those with rights in the original work). The new adapted work also qualifies for copyright protection in its own right. Depending on the terms of the agreement to license the original work, anyone seeking to publish or use such a work may need to get authorization to do so from those with rights in the original work.

Copyright also confers moral rights (Article 6bis of the Berne Convention) allowing the creator of a work to claim authorship in it (the right of paternity or attribution) and to object to any modification of it that may be damaging or prejudicial to them (the right of integrity).

— Catherine Jewell, World Intellectual Property Organization, ‘Creating Value From Music’, 2015.

With all of this potential revenue, the fact that currently (as of a 2018 article) only 12% of global music earnings goes to artists is a pretty damning indictment of the music industry.

Another important aspect in this chain is legal protection. Rights obviously go beyond simple monetary reward, and the complex ecosystem of authorship, adaptation, reproduction, etc. needs to be carried out through legal as well as technical channels.

Like the creativity of the artist, [investment in music] is something that needs to be supported and protected by a secure legal environment. That is why a safe, adequate copyright framework for artists and labels is so crucial. — Placido Domingo, Tenor & Chairman of IFPI.

It is therefore vital to notarize each step along the IP chain within a legal environment built around digital systems and data specifically. This needs to be developed from the ground up, and most importantly, it needs to integrate with data on the blockchain. Blockchain-based coins or tokens are no longer enough — the assets themselves need to be given the same properties of immutability, decentralization, and machine-readability.

Data that is incorporated into a blockchain can be made programmable in such a way as to move the concept of ‘smart contracts’ to ‘smart data contracts’. Instead of the code of a contract executing based on a one-sided record (the money being transferred) it can ‘see’ (with your permission) both the token and the data asset and make decisions based on the behaviour of both. This ensures a higher level of dis-intermediation (you don’t have to trust anyone to hold your data) and the ability to legally notarize data on the blockchain.

Gonna change my way of file sharing

Freedom is absolutely fundamental to music. Of that there can be no doubt. File sharing programs such as Napster and later, torrenting, created a paradise for the music consumer, and allowed people to experience the joy of listening to their favourite albums without breaking the bank — perhaps as a result even being inspired to create music themselves. However, while this was a new utopia for the consumer, it was far less so for the musicians. South Park jokes about multi-millionaire singers having to downgrade their private planes aside; for the vast majority of musicians still trying to make it (which is, of course, the vast majority) the ease to which their music could be pirated caused real problems and no doubt drove many to abandon their careers.

The Gulfstream III doesn’t even have a remote control for its surround-sound DVD system.

Downloading content for free does not have to constitute stealing, despite what the anti-piracy ads in the popular show The IT Crowd would have you believe. The act of stealing requires that the owner is deprived of the asset or of the monetary value associated with the asset, and therefore certain assumptions about the purchase intentions of the downloader must be made before assigning this level of illegality. But the reason for the heavy-handed approach is rooted in the inability to properly monetize content. If monetization was easier, without the huge logistical undertakings required today, or the need to pay third-party services, individuals would find premium services that invoke micropayments quite readily affordable, and artists would collect sufficient revenue from those able to pay a small, relatively insignificant fee for an improved service (e.g., fewer ads) that they would not care about the lost earnings from a minority of illegal downloads.

In order to have the chance to achieve commercial success and make a name for themselves, most turn toward intermediaries such as record labels, Producers, CMOs and streaming platforms for support and sponsorship. Nevertheless, while these relationships between Artists and intermediaries often are presented as an investment in the Artists’ talent, with the intermediaries providing funds to support the Artists, in reality they are more akin to a loan rather than an equity stake. Due to the unbalanced bargain powers, Artists are forced to sign economically disadvantageous contracts with the hope, in the future, to obtain commercial success that would guarantee a fair return for their efforts. (Silva A. Carretta, Thesis: Blockchain Challenges to Copyright — Revamping the online music industry, 2018)

The real game-changer here is direct payments. Peer-to-peer removes the (many) intermediate steps, with their associated individual drains on net revenue, and allows musicians to receive what their music is worth. The additional aggregate revenue from secondary market sales, fully programmable into blockchain-based metadata, allows creators to continue to extract value from their work in perpetuity.

It ain’t me babe, it’s you

The rise of streaming platforms has obviously been a boon for those wishing to listen to their favourite artists. However, it further complicated an already convoluted process of assigning ownership.

Thus, it can be affirmed that the recorded music made a shift to a model based on ‘access’ rather than ‘ownership’ and this has brought new significant challenges to the industry. (Silva A. Carretta, Thesis: Blockchain Challenges to Copyright — Revamping the online music industry, 2018)

It’s the age-old question of whether to prioritize the producer/creator, or the consumer. Luckily, with blockchain and the concept of identity-based ownership, we can do both. The identities of every party that contributed to the creation of the music can be encoded into the data (see next section) in a way that is machine-readable. This allows for access that is not slowed down by the need to establish ownership before sending the music out into the world. Furthermore, ownership through identity automatically protects the rights of the sovereign individual.

The files they are a-changin’

Ok, yes, this one is particularly cheesy (and it’s the last one, I promise). But it is important to note that the concept of Smart Data is a fundamental change to the notion of a digital file. By utilizing encoding, rather than signing, and employing blockchain technology to provide an immutable (and verifiable) record of the file encoder, a Smart Data file can be viewed as a decentralized file format.

The data itself can be held by anyone. However, it cannot be reconstructed in a useful form without the use of the encoder (imagine a form of digital DNA, that encodes the content of the file in the same way that human DNA encodes traits such as eye colour, or height) and the encoder can only be accessed with a pair of asymmetric encryption keys (which are also used to provide the owner with the means to sell or otherwise transfer the encoder). Moreover, the data is further encrypted with a symmetric key, that ensures only the owner can read the content of the file.

How does this help the egregious inefficiencies at the heart of the copyright and royalties industry for music? Well, firstly, the use of blockchain-based metadata allows for quick and easy determination of which parties should be awarded which portion of royalties. This is a game-changer, and has the potential to improve auditing times considerably. However, this approach fails quite soon out of the starting gate due to the glaring omission of trustlessness (yes, I realise that’s a double negative). How exactly do we know that we can trust the metadata associated with the blockchain entry? The record may be immutable and beyond reproach, but the virtues of the creator are not. Moreover, unless every piece of metadata is fully standardised according to some set of markup metrics not yet established, it is still difficult for machines to process the information stored.

With Smart Data the critical innovation is that each invested party (the songwriters, the performers, the producers, the labels, etc.) contributes a piece of encoding ‘DNA’ to the asset held on the blockchain, which only their encryption keys are able to access. This can either be done as an ‘one-for-all, all-for-one’ model (whether one is channelling the cry of Athos, Porthos & Aramis, or reciting the unofficial motto of Switzerland…presumably in the original latin, it is a time-tested example of the power of collaboration) or as a piecemeal fractionalized ownership model. This cements the immutable ownership record as a trusted one, because it is impossible to re-create the file if the information is false.

Multiple parties creating a digital DNA encoder for a Smart Data file. The encoder sits on the blockchain, where it constitutes an immutable and secure record of each party’s contribution and their assigned IP rights.

In addition, the ability for the required information to be read and understood by machines is a watershed moment for the entire music industry. While ‘machine-readable auditability’ may be one of the most boring-sounding phrases anyone has ever heard, its role in bringing recorded music fully into the digital world (for, somewhat surprisingly, the first time) cannot be understated.

The Soggy Bottom Boys may have achieved life-changing fame with their single hit, but for the musicians and recording artists scrabbling at the coal face there is an urgent need to share their talent with the world, and to be paid fairly for it. This requires a change from the ground up in the way that the music industry works. By utilising blockchain technology, a recording artist can become a ‘recoding’ artist, and embed their identity, their rights, and their principles into their work in a way that is worthy of a true information society.

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