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India takes the lead on Blockchain

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The one lament that appears to have been heard forever, especially within the Indian music industry, is that songwriters do not receive their fair share of royalties. The viewpoint differs, depending on which part of the business that you come from. However, with the impending introduction of blockchain technology in the Indian recording industry, the answer finally appears to be a singular one with the uniqueness of this technology bringing in trust among all stakeholders by rendering the lack of transparency obsolete and, with it, resolving the distinctive disconnect that appears to have existed among owners of music content, songwriters, and artists.

While it has conventionally been the case of fingers being pointed towards music labels, rather than debiting them for that kind of uncalled for credit, let us agree that the system that existed in the days of the physical format was antiquated, where recording companies, music publishers, and rights societies spent thankless hours–and unaccountable overheads–attempting to monitor royalties. However, in a digital world, the necessity of taking the learnings from the past and turning them into a present for the future was the need of the hour, and several sincere global attempts were made, since the late ’90s, to resolve the ailment of non-transparency.

For instance, in 1998, the International Music Joint Venture (IMJV) became the first association to create a database between multiple collective management organizations [CMOs] but, with severe differences on how to move the initiative forward, in late 2001, IMJV dissolved. Next on the list of initiatives was the Global Repertoire Database which was started in September 2008.

This database had representatives from publishing houses, record labels, Google, and iTunes, and 13 CMOs creating a comprehensive database for the international music industry but, with various CMOs pulling out from the initiative, it was soon relegated to history. Last and, perhaps, not the least in 2011, the International Music Registry (IMR) was launched with the database initiative being headed by the World Intellectual Property Organization (WIPO) that encompassed not only compositions but also recordings. While Google agreed to fund the initiative, one reason for the association falling apart was WIPO subsequently believing that the alliance would provide Google an unfair hold over the international music industry.

However, a more recent initiative supporting blockchain technology, and closer to home that is occurring here and now is the brainchild of Rajat Kakkar, managing director & CEO of the Phonographic Performance Limited [PPL] in India, who has set up Soundsys Technology, an entity comprising four collection societies–all having joint, and equal ownership–which, besides PPL, includes: Phonorights [from Thailand], ASIRINDO [Indonesia], and Music Rights Society Singapore; formed
under the aegis of IFPI [International Federation of the Phonographic Industry], a non-profit organisation that represents the interests of the global recording industry worldwide.

“So far,” says Kakkar, “each country is doing its own piece of uploading databases. However, we required a unified body wherein content usage data is inputted into a singular system and, as part of the output, everyone in the system is aware of what is payable to whom.”

Effectively, in doing away with working on individual silos, Soundsys ensures the creation of a common database as its technology talks, simultaneously, to all members within the respective collection societies.

 

Blockchain; the way forward?

The technology behind Soundsys’ initiative is being handled by Barcelona Music and Audio Technology (BMAT), based in Barcelona, Spain, which appears to be a perfect fit for Soundsys as BMAT services over 100 collective management organizations, over two thousand record labels, and publishers, monitors 92 million identifications monthly, processes 100 million sales from YouTube, Spotify, Apple Music, Amazon, and 40 more digital platforms every hour, and tracks 5,000 radio stations, 1,500 television channels, and 1,000 clubs, across 134 countries, on a 24/7 basis.

BMAT, once its blockchain technology gains a foothold in the Indian market, proposes to provide the facility of fingerprinting, something that the company is conversant with, keeping in mind that it has already created over 72 million fingerprints to date. Marketers will also receive real-time data and, with retail and hospitality industries being closely monitored, members might see their revenues on a real-time basis through a dedicated dashboard that would specify the city of consumption, outlet, and time of usage, among other details.

Now that every computer, tablet, and smartphone has turned into a music store, rights ownership information has gained primary importance for artistes, publishers, labels, and other copyright owners. With blockchain technology ensuring that all transactions are encrypted and, whenever a change occurs, a copy of that changed record is forwarded to all those represented on the network through an inbuilt algorithm, results in all ledgers containing the same records. Soundsys has
established all this while breaking down geographical barriers as blockchain closes the link between performers and consumers.

As more players enter an already overcrowded market, and with a lot of companies diversifying from their main line of business that already has captive subscribers by offering them streaming services, is leading to blockchain becoming essential. In support is that the technology brings down the cost of administration, preventing any kind of revenue leakage for rights owners, and overcoming an otherwise complex system which used to entail years for disbursement of monies to rights owners.

Further, by reducing overheads, makes it more viable to enhance revenues which could either be invested in furthering technology or, as the case is, having more funds available for distribution across stakeholders. When there still exist no-sayers for unproven opportunities and the risks that accompany them, it is only through this path-breaking blockchain technology that conventions and shifts will occur. Credit, undoubtedly deserves to be provided to PPL’s Rajat Kakar in defying convention and proceeding with an obvious disruption to the traditional manner of pursuing music business in India.

Intending to secure a more robust rights system as the underlying theme, the blockchain-based rights tracking system is undeniably the way forward and, with it, the inherently scalable architecture that goes with it.

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Parag Kamani
Parag Kamani

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