Bitcoin innovators head to market with music rights on the blockchain

Giving musicians the power to manage and distribute their music themselves is long overdue – now, at last, bitcoin technology offers a compelling solution to the problem.

A musicians' rights management platform is being launched today by Revelator, a cloud-based provider of sales and marketing intelligence for independent music businesses, and Colu, a technology platform with a proven pedigree of bitcoin innovation.

Music rights ownership and the digital distribution of music is a complicated and fragmented ecosystem in need of a protocol upgrade. The companies say the new API will provide the secure issuance and distribution of digital assets, including listing and registration of musical works for clients while helping collecting societies provide more transparency and efficiency to all market participants.

Bruno Guez, founder and chief executive officer of Revelator who has some 25 years of experience in the music business told IBTimes: "I have experienced first-hand as a label boss and a rights manager of the complexity of digital and how you have to do the revenue consolidation and how you have to do the accounting and the splitting and how it gets more complex as you have more and more channels and devices to deal with.

"I have also experienced the lack of transparency and the difficulty in being transparent because we never had better tools in terms of seeing all the data coming through and trying to see it on a nice dashboard and understanding exactly what needs to go to each rights owner you are in business with."

Bitcoin uses a transparent public ledger to record all transactions, the blockchain. This is a decentralised approach to the governance of assets updated continually by a peer-to-peer network, rather than being controlled by a single entity.

Colu, the technology platform behind the music rights application has developed a way of attaching additional data onto to the coding of bitcoins so that their transactions can execute music rights contracts.

Bitcoins with metadata attached to their code to issue other assets are known as "coloured coins", a project Colu was involved in back in 2012.

Amos Meiri, Colu chief executive officer and co-founder told IBTimes: "There is a limitation in terms of the amount of data you can put on a bitcoin transaction which is now 80 bytes. We didn't want to have that limitation so what we are doing is we are storing the metadata on BitTorrent and we are hashing the data and putting it on the blockchain."

Meiri explains that the Colu platform is easy to use: "Today if you want to integrate to the blockchain technology you need to be a cryptographer or a bitcoin developer. So we are trying to remove the complexity from it.

He explained that the platform can easily be used as a mobile app and does not involve owning bitcoin or using bitcoin addresses to sign transactions.

"You just send assets to a phone number. The platform does everything for you," he said.

Smart contracts running on top of the blockchain can execute the moment someone buys a song at itunes and also instantly and flawlessly distribution a split of assets to the artists involved - the drummer, the guy who wrote the song, whoever is a beneficiary - all happening in real time, while other things like expiration to a right can also be added.

The musician and artist Imogen Heap has been a vocal champion of the blockchain's potential for artists and musicians to own and manage the rights to their material.

Heap, who is working on her own Mycelia Project for musicians and artists to use distributed ledger technology, welcomed the new platform.

She told IBTimes: "I have read a bit about what Revelator is set to do and it really does seem to fill a lot of the gaps. Connecting dots and enabling the artist/songwriter/musician/record label/publisher to have a lot more info at their fingertips.

"I hope that the database is open and that others can build upon and around it. I really believe that no-one should own a global database that all these services should grow from. I see Revelator on what I call a 'mushroom' onto of the organic Mycelial library. Offering a service (that the user would pay for), to bring the most of their music on the global database."

Handing back the complete end-to-end management of musical rights to artists is a disruptive proposition which will have an impact on some points in the industry.

Revelator's Guez was sanguine about possible changes: "People ask me will labels be disrupted if you are cutting out the middleman? My feeling on that is that with the labels there will always be curators.

"And as far as the lawyers go, you will always need people to negotiate rights for people. What this becomes is the next logical step to make those rights more programmatic, more algorithmic. So that that they can actually transact, which the lawyers never do; they never get to that part of the transaction, only that part of the negotiation.

So I don't think the lawyers are being disrupted; if anything they can rest assured and have more piece of mind that once that deal is sealed and we know exactly how much the artists or the label are splitting, or the band members between themselves, or the manager, or the publisher. "

He envisions a derivative-work type of smart contract that would use a multi-signature approach so the publisher or the label would say yes that is indeed my composition or recording and I approve your use if I get x amount of my percentage – it becomes part of calculation that's automated.

"Once that becomes a programmatic algorithm locked into the blockchain and secured as a transaction, then every rights owner and rights manager in that value chain will see a much more sophisticated, secure, efficient and transparent transaction.

"I see it more helping and getting rid of the lack of transparency in the information flow between all the relevant parties worldwide."