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New report: Bitcoin-like system could cure music streaming royalty woes

In response to the ongoing debate about whether or not streaming services pay artists fairly, a new report suggests that the music industry should consider using blockchain technology — the public record that documents Bitcoin transactions — for more transparent streaming music payments to artists. The Fair Music Report, released by Berklee College’s Rethink Music initiative, explains that this system of automating royalty payments is the first step in justly and efficiently splitting streaming music income between the artist, label, and publisher.

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The thesis of the report is that building a so called “cryptocurrency” system around a music rights ownership database will allow accurate payments to stream to the correct recipient.

“In addition to rights ownership information, the royalty split for each work, as determined by a mixture of statute and contracts, could be added to the database,” said the report. “Each time a payment is generated for a given work, the money would be automatically split according to set terms, and each party’s account would instantly reflect the additional revenue.”

Rather than having labels pay out royalties, this hypothetical cryptocurrency system would instantly give rights holders their correct payments, without manual intervention from any party. “The entire process would take place in less than one second,” said the report.

While seemingly ideal, setting up and implementing this payment system would be a difficult task. Specifically, creating an accurate music rights ownership database is optimistic — if not outright unrealistic. Music collection societies like ASCAP and BMI would be the best bet to help develop the database, although The Guardian notes that similar initiatives like a “Global Repertoire Database” have fallen through in the past. Further, creation and upkeep of a Bitcoin-like network would require infrastructure that the music industry doesn’t currently have.

The report also touches on other ideas including a “Creator’s Bill of Rights,” highlighting the approaches of digital services and labels that treat creators fairly, and programs to further educate musicians on their digital rights.

Prominent music industry figures like Radiohead co-manager Brian Message and musician David Byrne agree that the report’s recommendations — regardless of their short-term viability — are on the right track for the industry’s future success. “The picture the study paints is spot on and fairly devastating — as it should be,” said Byrne to The Guardian. “It’s essential reading, and given the lack of vested interests at work it should be explosive and wide ranging in its impact.”