By Alan Graham of OCL

Let’s get real. There’s a lot of talk about data and transparency and blockchain these days when it comes to the music industry. This will solve everything!

However, there are issues no one seems to want to discuss that also need immediate attention. So let’s open up and take a very bitter pill.

Copyright Isn’t to Blame

Rights owners and rights users have always had a symbiotic relationship. With the rapid advance of technology there’s been an incorrect assumption that copyright itself has created a chasm between these two parties making them adversaries. But this isn’t the case. Copyright isn’t to blame for the distance between rights owners and rights users…it is in fact apps and platforms.

Now before I lose the tech side of the audience out there, I’m not laying blame solely at their feet, because there is plenty of blame to go around. This was a societal shift and a series of bad decisions based on no good decisions available at the time. But we need to be smart so that we can correct this before it gets further out of hand, or it will hurt everyone.

Tech companies, platforms, apps should all be focusing on doing one thing and that’s creating great experiences for their users. They should be building best of class technologies that makes all our lives better. But when it comes to music they can’t. Because in the past decade we decided we would make them the arbiter and gatekeepers of rights. We should never have done this. It shouldn’t take a team of lawyers and millions of dollars to make a decision on music use in an app, and it is therefore understandable that developers would find the process complicated and mystifying.

Only Do What Only You Can Do

Developers are completely unqualified for this task. They don’t have the knowledge or qualifications, they can’t issue a proper sync licence, none of them (and I mean none) have proper tracking methodology or technology, they spend inordinate amounts of time acquiring rights and negotiating advances borrowed from their venture capital towards royalties for deferred payments on future use.

I’d wager 80% have no idea where they are going to even make money yet, because they generally don’t have a working business model, and if they do it is the unsustainable scraps from affiliate revenue or the ever nebulous, “advertising”. I’ve even been party to some behind the scenes knowledge of some small app developers who wanted music so badly in their apps, they have signed some truly egregious contracts that doom them to failure on day one. I don’t see the value as a label of owning a piece of a company destined to fail.

We put at their feet the responsibility of solving issues they (in reality) cannot solve and that have instead further exacerbated the issues. This has given some of apps/platforms who have massive audiences and cash more power, and in many cases allowed further abuse.

Add to that there are tens of millions of developers out there, a large percentage of whom would be interested in incorporating music and other creative assets into their apps. Since this cannot efficiently be handled and there is no unified method to deal with payments, tracking, granting permissions, delivering media, accounting, reporting, and payments…it would be an impossible task for the music industry to manage any of this.

I once calculated it would likely take a team of 1,000 people over 8 years to negotiate and licence just 10% of the apps/platforms out there today, all while smartphone adoption heads past 2B+ units in the next year or so. Without a unified solution to handle this, there is currently app stagnation, a lack of inspiring or interesting use cases, and instead only a select handful of developers and platforms who are even allowed to play with music in their apps or platforms because they have lots of money.

All facts. That’s where we were and where we are.

Now, where are we headed?

The Dark Social and the IoT Will Make Content ID Pointless and Takedowns Irrelevant

Recently it was reported by RadiumOne that over 82% of mobile sharing is occurring in what’s called dark social (http://digiday.com/publishers/80-percent-mobile-sharing-done-via-dark-social/). According to them, this “dark traffic” (behind the walls of apps – where you cannot see) means it becomes very hard not just for ad companies, but for rights owners to have any knowledge of how their works are used or even to monetize them. This problem becomes massive once adoption of point to point encryption becomes commonplace. At that point, all the investments and companies who are based on fingerprinting technologies (that includes YouTube’s Content ID) become pointless, because fingerprinting an encrypted file is impossible.

Add to this the fact that decentralized and ad hoc networks comprised of the Internet of Things (IoT) and smartphones that generate a mesh of connected devices make ISPs less relevant. This means people will easily be able to share whatever they want, whenever they want. No ISP, no takedowns.

The Next Big Thing May Be Unlicensed

Already, someone alive today, will launch in the next 2 years what is essentially the most powerful free music sharing service akin to a Spotify-like service, except unlicenced, because it will enter the world anonymously as part of some likely combination of blockchain technology, magnet links, torrents, smart contracts, AI, and so on. You can’t take it down and you can’t sue it because no one owns it or operates it. You can’t file suit against a bot and you ain’t seen “free” until you’ve seen what this thing will do to the entire market.

If there were such a thing as a singularity of copyright infringement and piracy, I’d say we were at the Outer Event Horizon, nearing the no escape zone.

Another major issue is frankly that the music industry has failed to prepare for what is likely to be a giant issue in the next year or so as streaming growth booms. You cannot remove a recording from a streaming service and embed it into a file that is essentially a sync licence. While we all pat ourselves on the back for how great streaming growth is, we fail to realize we’ve cut off each of those users from doing something they love…making stuff with music. Streaming platforms are bound by agreements from allowing this to occur, so when you hit critical mass, what will that mass do? They’ll streamrip the files. We now head back to massive piracy again.

So all doom and gloom…

Disrupt the Disrupters to Avoid the Cultural Black Hole

Well maybe not. I gave a version of this talk last year at Midem and I said that in order to prevent such a thing from occurring you need to disrupt the disrupters. You need to out-innovate. This is a time to trail-blaze. Regardless of the current trajectory it is not in YouTube or Spotify’s best interests to see their own markets vanish. But they need to step out of their own comfort zones and work with creators to forge an alternative that’s better than the above. That means questioning things we’ve become very accustomed to in the past 15 years. This is a team effort.

We can avoid a cultural black hole.

For one thing, we need to move beyond or evolve the idea of ContentID. As illustrated above, the problem is that Content ID is a flawed system based on the premise of allowing something to occur that should in fact never have occurred, which is the infringement of the work of another person. It is a retroactive payment system based on rewarding improper use.

Generally it is thought this is acceptable because there is a payment made towards music rights holders. However there are billions, maybe even trillions of visual copyright violations against visual artists, like illustrators and photographers, of which there is no Content ID system in place. In a way it means that the music industry accepting money from YouTube is doing so while other artists are being exploited with no remuneration at all.

Musical artists have incredible access to media sympathetic to their voice, while no one seems to give much lip service at all to their brothers-in-arms on the visual side. But if they ever do get organized…watch out. Musicians in fact should be unifying with other types of artists for change. 

I make this point because it has been suggested (to me in fact on more than one occasion) that a solution to the data problem is simply for YouTube to open source the data in Content ID so anyone could use it. Now if you got this far, you know that it is reliant on waveforms and hopefully a submitted ISRC. But, it likely doesn’t have the publishing data.

And even if that is there, you cannot compare a waveform fingerprint to an encrypted file. So what might work on YouTube doesn’t necessarily work on other platforms. Are you going to fingerprint 500 trillion messaging exchanges and posts per year? Any clue on the CPU cycles and energy that wastes? And the thought that Facebook is developing their own version of this, just increases the complexity of accounting and reporting and monitoring all of this usage. Is this what you want? 

This doesn’t need to happen, but the pieces have been falling into place the past 3 years. We need to make a concerted effort to solve this issue universally across the entire industry, regardless of nation or region, or we’ll find ourselves with a bigger mess that no blockchain or smart contract can unravel.