Music, Money and Metadata: The Promise of The Blockchain

Mar 27, 2017

The music business has become a big data business. With millions of songs streaming every day from countless internet and mobile platforms. The creators who made and the companies that financed those recordings are supposed to get paid . Set aside how much. Do they get paid accurately and completely? No say most experts in the field. And they don’t because of bad and missing ownership data.

We’ve met DART, the Nashville company that’s using artificial intelligence to compile a definitive database of song ownership and rights. But then what? How does that data reach and influence those millions of transactions?

Here’s where Nashville’s tech insiders are looking for outside help, from a company so dedicated to its new technology it’s in its name: Dot Blockchain.



by Craig Havighurst

NASHVILLE, Tenn. On the music business conference circuit, Benji Rogers has been all but unavoidable in the last year. Famous for creating the crowd-funding company Pledge Music, Rogers has a new venture and a new cause. He’s been living out of a suitcase, explaining and evangelizing for something he’s calling Dot Blockchain.

Here’s Rogers at the Fast Forward 2016 conference: “A blockchain distributed ledger or database seems like a great place to build a global, decentralized database of rights and ownership and rules.”

In a Music 2020 dot org interview: “It’s got to be striped with what I call Minimum Viable Data which is how to contact at least one writer and one performer.”

To the British Phonographic Industry: “Enshrine within the DNA of the song itself certain rule sets. Then what you can do is you can enforce them.”

And as a guest on The Bridge The Atlantic music business podcast: “When it shows up on YouTube, Facebook or on a torrent site, whatever it is and  you double tap, you will always be able to see who owns it, how to contact and pay them.”

“I love that. That is amazing,” says podcast host Marcio Novelli in response, and he’s far from alone in his assessment. But what is blockchain? And why is Benji Rogers trying to make it the linchpin of a music industry revolution?

I reached him at Dot Blockchain headquarters in New York. He said: “If you can take information on who owns the track, i.e. the writers, performers and everyone who was involved in it and on who performed it and put it into a box or a digital format and make the pre-condition of the format that you can’t remove that information, then that will be what I would consider to be a fairly tradable music format.”

Format is a key term. A file format is a type of software that does a certain kind of job. .JPG is a format for images and .MOV files are for video. The common music formats are .MP3 and .WAV. Rogers’s new format is .BC.

“The reason that we went for the format is because everything else was: Let’s build the monster database to rule them all,” Rogers says, noting that if good data is sitting in one place, there’s been no good way to get that information to all the platforms in real time.

“What we said was if we build the format that builds the database, you’re in a different realm. And it’s because of something I said earlier, which is songs are now files and files go everywhere.”

And blockchain files - the .BC files - are much better at carrying metadata with the song than .MP3 or any other format in the industry today. Because they can’t be changed or hacked. And they can’t be separated from the audio. That’s why Rogers talked about a “box” and about the DNA of the sound file.

This wasn’t even imaginable a few years ago. But something changed.

(CNN’s Jake Tapper reporting on Bitcoin.)

To understand blockchain and .BC music files, you have to understand a little about the world’s first virtual currency, so I visited a local expert.

Lij Shaw discovered Bitcoin in 2013. Shaw, a record producer and recording engineer in East Nashville, became a Bitcoin trader and co host of an award-winning podcast called Bitcoins and Gravy. He said: “I just thought it was really fascinating - the whole concept of the blockchain and Bitcoin and of course the possible investment.”

Bitcoin trader Lij Shaw.

He says Bitcoins are secure computer files that the user stores in a digital wallet. Each has two key variables - a quantity and the up-to-date value of Bitcoin worldwide against all other trading currencies. How does it know? That’s the mind blower.

“The blockchain is what’s known as distributed autonomous ledger,” says Shaw.

Autonomous because each Bitcoin file is sacrosanct and one-of-a-kind. Distributed because every file in every wallet is always listening to the internet, receiving a one-way message every few minutes with the market value based on ever-changing demand. Shaw: “What I think is fascinating about the blockchain and the way it might integrate with the music industry now is it becomes this trusted ledger that nobody can mess with.”

To be clear, neither Shaw nor Benji Rogers are saying that people will pay for music with Bitcoins. Instead Dot Blockchain has leveraged the underlying technology to make secure sound files that also listen to the blockchain for changes and updates to their metadata.

Shaw said, “An initial group of people who compose something and agree that this is the truth about it can embed it in the blockchain and it's there for good. And the only way it can change is if the same group of people come together and agree that it's time for a change and we're gonna verify this change. And more importantly, imagine that there's some opportunity for a company to want to use music and they desperately need all the information about who owns it and how do we pay in order to use it? All that information can be trustfully embedded into the blockchain.”

Benji Rogers says he’s hoping that by the end of this year, Dot Blockchain will be able to launch millions of .BC song files into the bloodstream of the internet where they can be used for trusted commerce.

“And the really cool part about this is every song will have a dashboard,” he said. “And when you double tap into your dashboard as a creator you’ll actually be able to look at where it’s being used.”

And the embedded metadata will go well beyond the writers, publishers and accurate titles. Blockchain files can carry smart contract rules, which will be accessible on a permission-only basis.

Rogers: “You can say ‘This song is available for use on YouTube but not in any videos that do this, but if it is used by this, we’d like this ad at the beginning and this is the account to pay.’ With a smart asset – an actual musical asset which we don’t have today - its destiny can be maintained and it can grow.”

“When you break it down, it’s actually a very simple idea,” says Mark Montgomery, strategist and investor relations chief at DART in Nashville. “It says this is the thing in the center (the song). And when anything around it changes, notify everybody and change the pay stream. It’s a decentralized accounting system.”

Montgomery spends a lot of time talking directly to artists and writers, and his message in part is that while the digital giants - Google and Spotify in particular - have a bad reputation, they want to do the right thing and will if they get the tools that makes it possible.

“We need to build a system that allows people to care for your stuff,” says Montgomery, alluding to writers and artists. “But you own it. And that’s what Dot Blockchain and DART does. It identifies who owns it and in real time, changes it when it changes.

A Dot Blockchain future also means the song file metadata could include historic information, photos, liner notes, dates and recording personnel. We’ll be able to search for anything Joni Mitchell ever sang harmony on. That makes us music aficionados excited, but the music business has incentive to get on board, says Benji Rogers, because despite past inertia, the potential of a friction-free accounting system is vast.

“The music industry should be a $100 billion a year industry,” he says. It’s currently less than a quarter of that. “And it’s not because it’s so slow to commit commerce. Because of the data problems and the issues of getting people paid.”

More about what’s stake for creators and content owners, and how they’ll use this new system, coming up next time in Music, Money and Metadata.

Craig Havighurst covers music news for WMOT. Follow him at @chavighurst

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from the Harvard Business Review