The Future of Smart Contracts in the Music Industry

What if we could replace antiquated physical contracts execution to fit with the new digital music age and real-time commerce? Well, today we can, and the technology is known as smart contracts. Just as the blockchain has emerged to claim its place as the up and coming financial instrument of the future, smart contracts have become an equally hot topic.

Electronic contracts, or smart contracts, between labels, distributors, and artists, can reshape the industry to ensure transaction and payment efficiency as well as increased transparency. Smart contracts are primarily a computer program whereby all parties can agree to the contract electronically, and it can also be enforced electronically.

This can be achieved through the introduction of blockchain technology. In the case of an executed smart contract, the blockchain would keep track of the ownership rights ensuring that the proper parties are paid in accordance with their smart contact. The more sophisticated the code, the more automated, self-executing, and “smarter” the contract.

Read Article: DataArt

Owner of Wolfgang’s Vault in Legal Battle Over Streaming Rights

A music archive regarded as one of the most important collections from the golden age of rock – thousands of tapes and videos featuring such artists as Pink Floyd, the Rolling Stones, the Grateful Dead, Led Zeppelin, Jimi Hendrix and Fleetwood Mac – is at the centre of a legal dispute in which Keith Richards and Pete Townshend could be called to testify in a Manhattan courtroom.

The dispute focuses on Wolfgang’s Vault, a concert-streaming service and memorabilia marketplace that owns the archives of Bill Graham, a rock promoter without whom the 60s music scene in San Francisco and New York might have looked very different.

Read Article: The Guardian

IBM, Sacem to Deliver New Global Online Music Copyright Management Platform

imageIBM and Sacem announced today a 10-year strategic alliance to develop URights, a world-class copyright platform on IBM Cloud designed to track and capture the value of online music for both creators and publishers. Electronic distribution of music and advances in the streaming market have led to rapid growth in the amount of creative content being consumed around the world. Last year, Sacem tracked nearly 982.5 billion download and streaming transactions – almost twice the 2015 total.

To handle the exponential volume of music transactions online, URights the innovative rights collection and distribution services platform – co-developed by Sacem and IBM – will help to more effectively identify online rights.  The platform will allow Sacem to provide additional value to rights owners with increased data analysis allowing more transparency and a more efficient identification of online works to help ensure they are compensated fairly. In 2015, Sacem distributed royalties to 293,000 creators and publishers in France and around the world, to credit two million works.

URights is open by design to allow other partners to integrate, such as other collective management organizations across the world, ensuring to save cost duplications and enhanced data-driven decision making. It will also provide customized services tailored to the specific nature of their local markets.

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RIAA Exec: 2017 Will be a “Critical Year” for Music Law

musicWhich lawsuits will you be watching most closely in the coming year? 

2017 is shaping up to be a critical year for music law. The Copyright Royalty Tribunal will set the rates that SiriusXM will pay sound recording copyright owners during the years 2018-22. To date, SiriusXM has benefited from below market rates set by the CRB under the so-called 801(b) standard. This rate standard does not require a marketplace rate, and the cost to artists and labels over the last 10 years is in the hundreds of millions if not billions. The result: a subsidy for SiriusXM as it has built an enormously profitable business. SoundExchange, representing artists and labels, is trying to restore some balance so that SiriusXM pays rates more in line with those that would be negotiated in the market. SiriusXM is asking for rates to be reduced. The decision is due by December 2017.

As the music marketplace has transitioned to streaming, the industry is seeing a rise in services that enable “stream-ripping,” which essentially copy and download music from a service intended only for streaming music or music videos. Stream-ripping undermines both streaming and download services. After all, why bother subscribing to Spotify if you can download all the music from YouTube? The industry has taken action against the largest stream-ripping site in the world, youtube-mp3.org. The case should be underway in earnest next year.

Read Article: Hollywood Reporter

Interview with Spotify General Counsel Horacio Gutierrez

Horacio Gutierrez: “The only way a company like Spotify can get, and stay, ahead in the technology industry is through a combination of two key things: innovation—in technology, business model, as well as in other aspects the service that we provide our customers; and customers delight —we have to not only satisfy customers, but even surprise and delight them, by offering them experiences they don’t get in other services. The combination of those two things is the only way that we can be sure to remain a leading force for years to come…”

“…I think one just has to look at data to recognize that the freemium model for online music consumption works. Our free tier is a key to attracting users away from online piracy, and Spotify’s success is proof that the model works. We have data around the world that shows that it works, that in fact we are making inroads against piracy because we offer an ability for those users to have a better experience with higher quality content, variety richer catalogue, and a number of other user-minded features that make the experience much better for the user.

“As we continue to succeed in monetizing the free tier, and continue to do a good job of converting free users to paid subscribers in the way we have done so far, we have a proven formula and a formula that, once again, will benefit everyone in the industry.”

Read Article: Harvard Journal of Sports and Entertainment Law

Spotify Challenges Ruling Over “Unconscionable” Way It Forces Users Into Arbitration

Streaming giant Spotify has filed a notice of appeal to the 9th Circuit concerning a federal judge’s recent decision not to force two of its users into arbitration. Gregory Ingalls and Tony Hong are looking to lead a class action lawsuit over a common feature in entertainment subscription services.

They signed up for Spotify’s premium service upon a three-month discount offer and claim that Spotify failed to adequately inform them that it would automatically renew their subscriptions at the full price once their trial period had ended. After a lawsuit was filed contending that their affirmative consent was need under California law, Spotify moved to compel arbitration pursuant to a Terms and Conditions agreement.

Source: Hollywood Reporter

Lefsetz on Stream Ripping

getty-digital-music-headphones_largeThe CD killed home taping. Did you really want to spend all that time making an inferior copy when the original sounded so much better?

Of course not. Never mind that CDs were vastly overpriced, didn’t compensate creators for said increase and singles were cut from the catalog, forcing you to buy a whole album to get the one good song you wanted.

In other words, the music industry fought the battle of the past by entering the future.

Source: Lefsetz Letter

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