Blockchain technology is set to play a power chord in the music industry by helping to solve copyright issues

Luke Graham
Follow Luke
2014 iHeartRadio Music Festival - Night 1 - Show
The music industry has problems dealing with and tracking intellectual rights ownership (Source: Getty)

The internet has allowed consumers to create, share and listen to more music than ever before. It has also created headaches for the music industry, specifically over how to keep track of copyrights in a complex global economy and how to accurately allocate royalties to artists and labels.

One London-based tech startup, JAAK, hopes to solve these problems by making use of a technology more commonly associated with finance than entertainment: blockchain.

But blockchain isn’t just about cryptocurrencies like bitcoin. While cryptocurrencies require a blockchain to track and record transactions, the underlying technology can be applied to solve a whole range of problems.

Read more: Blockchain startup Cobalt nabs investment from the Singapore Exchange

Blockchains work like a huge, digital ledger book that can record and store information on a global, decentralised and (usually) public network. This means that anyone can add information, as long as it follows the rules and protocols governing the network. This also means the information is protected once shared to the blockchain and cannot be tampered with or altered fraudulently.

The technology can be applied to a range of situations beyond cryptocurrency. In 2016, US stock exchange Nasdaq trialled a system using a blockchain so investors could securely vote in shareholder meetings. In healthcare, there are companies using blockchains to track a patient’s medical history, or to centralise and share the results of clinical trials. CityA.M. has previously written about how blockchain can be used to track marriage records.

Now, JAAK is designing a way to create a global view of intellectual property rights ownership in the music industry.

“Communicating rights ownership has historically been quite difficult, because it changes over time, and also has never really had a specific way of being expressed it in any physical framework. Lots of efforts to do that have been dispersed and never really gained much traction,” says Vaughn McKenzie-Landell, the chief executive of JAAK.

The music industry in particular has problems, as each song is made up of several different copyrights.

There’s the master copyright, which is the recording as whole – a label may own this, but may delegate these rights to a subsidiary in another territory, and the rights may get sold or repackaged over time.

But there’s also the composition copyright. If different musicians collaborate on a track, or a song is a cover of a recording, then the rights end up being split in several ways, especially if the artists are represented by a local or regional performing rights organisation who also get some of the rights.

“Every single time you want to use a song (and think about Spotify, which has 40m songs) each one requires you to know exactly who the authors are, and the publishers, and the performing rights organisations, at any one time, and also knowing which composition is being used in which recording,” adds McKenzie-Landell, who co-founded the company in 2015.

The rise in popularity of streaming meaning more music is being listened to in more places around the world, exponentially increasing the numbers of transactions taking place and causing pains for companies and labels to ensure royalties are paid in the right amount and to the right people.

JAAK’s solution to the problem is KORD, a public data network running on top of a blockchain, which will enable users to add their rights information to the database, with the network’s rules able to detect conflicting information. And the industry is taking note – McKenzie-Landell was selected this year as one of Forbes’ “30 Under 30”, which recognises creative disruptors across the economy.

“We’re trying to solve a problem of having a type of software-based infrastructure where you can get a global view of rights ownership,” says McKenzie-Landell,

“What it enables is something actually relatively rudimentary, which is licensing globally in a very scalable way.”

Last week on 2 May, JAAK announced the successful pilot of KORD, with major industry leaders from every stage of the music value chain taking part, including BMG, Global Music Rights, Phoenix Music International, Outdustry, and Warner Music Group, who have contributed their copyright information.

“From studios to streaming sites, a clearer picture of recordings and copyrights could yield untapped benefits for artists and writers – and JAAK is pushing an exciting frontier,” says Sebastian Hentzschel, chief technology officer of music publisher BMG.

As well as testing the use of blockchain technology for tracking rights ownership, it is hoped that KORD will create new opportunities for commercialisation and licensing music.

“The next phase is, can the tech actually do this without us being involved? At the moment we’re doing a lot of hand-holding. We’re taking the data, we’re putting it in, we’re doing a lot of the things the protocol and the applications need to do themselves. That’s really the next step. And then seeing if the fact that the technology does stand on its own two feet would allow a wider amount of participation,” adds JAAK’s chief executive.

A clearer picture of recordings and copyrights could yield untapped benefits for artists

For KORD to be fully successful, it will need industry-wide collaboration from stakeholders around the world.

“What we’re trying to do is get buy-in over time, slowly, with things that actually solve real commercial problems for each of those stakeholders.”

The future applications of this framework are widespread, and could be used to manage copyright for television, film, and even publishing.

It may be possible, much further down the line, for an individual to add their composition and its copyrights to the network, then be paid automatically via the blockchain by someone who wished to sample it.

According to McKenzie-Landell, where a public blockchain meets enterprising businesses, the result can be very powerful. A supergroup formed of this tech and the music industry sounds like a major note of success.

Read more: Bloomsbury reveals music book tie-up with Spotify

Related articles