Blockchain Tech: A Solution For Music At Political Events?
As inevitable controversy continues to erupt between artists and politicians regarding the use of music at political events, George Howard takes a closer look at exactly what rights these artists have, and how Blockchain Technology might be used prevent such tension in the future.
Guest Post by George Howard on Forbes
Every election cycle since Reagan’s 1984 campaign has included – to a greater or lesser degree – tension around the use of music by candidates during their events. In fact, while Reagan’s misguided use of “Born in the USA” was the first truly memorable and visible kerfuffle, it’s likely that, to paraphrase, Raymond Kurzweil, it’s not that the (mis)-usage of music is getting worse, but that our information with respect to reporting it has gotten better.
In any case, here we are again, and nary a day goes by when there aren’t pleas/demands from artists for politicians to stop using their music, and the media seems to be more engaged than ever in reporting this phenomenon. Yours truly was even recently on NECN discussing Donald Trump’s use of music during the RNC, and – at only a slightly more visible level [wink] – John Oliver devoted a large portion of his weekly show to the subject, and even created a song – featuring artists like Josh Groban, Usher, Sheryl Crowe, and others – that articulated these artists’ frustrations around the issue (I’ve written about how problematic this song is in terms of the artists’ seeming misunderstanding of the rights issues, entitled, “Do Artists Like Usher And Josh Groban Really Not Know How They Make Their Money?“).
With respect to whether or not politicians can use artists’ music: Briefly, if these artists are the songwriters and have affiliated with a Performance Rights Organization (PRO), like ASCAP, SESAC, or BMI, and the venues in which these events are taking place have purchased a blanket license to publicly perform the songs that are in the catalogs of these organizations, these candidates are within their rights to do so.
While in most other countries creators of works can rely on “Moral Rights,” the United States does not recognize this concept. This concept of Moral Rights is succinctly summed up by Betsy Rosenblatt from Harvard Law School:
…the ability of authors to control the eventual fate of their works. An author is said to have the “moral right” to control her work. The concept of moral rights thus relies on the connection between an author and her creation. Moral rights protect the personal and reputational, rather than purely monetary, value of a work to its creator.
While authors in the US can conceivably rely on claims such as False Endorsement, to stop those who are using their works against their wishes, this approach is time-consuming and costly, and certainly victory is not guaranteed.
Thus, there is currently no practical legal mechanism for artists to avail themselves of in order to stop the unwanted use of their work. The problem, however, is less a legal one, and more a systems problem.
The reason, for instance, that Queen doesn’t just withdraw their music from the PRO with whom they are affiliated, and thereby force candidates and/or venues to directly license their work, is because this would also preclude them from collecting the massive amounts of money their songs generate via usages that one assumes they are OK with.
Undoubtedly, the Quicken Loans Arena in Cleveland, where the RNC Convention took place, has blanket licenses with the PROs in place. And, certainly at some point after the RNC Convention ended, some other event took place in this arena – perhaps a sporting event – during which songs like “We Are the Champions” and/or “We Will Rock You” were played (because one or both of those songs are always played at a sporting event), and the members of Queen who wrote those songs would eventually receive compensation for the public performance of those songs via a percentage of the blanket license fees collected and distributed by their PRO (this, of course, also means they will eventually receive payment for Trump’s usage).
This issue – Queen and most other artists being stuck in a dynamic where they can not feasibly select where, when and how their music is publicly performed – highlights how we must aggressively move from a system of “modeling” to one of “measuring.” This “from modeling to measuring” phrase was coined by my brilliant friend, Kelly Olson from Intel INTC +1.13%, and it succinctly sums up the problem [disclosure, Intel is a client of my consulting firm].
Think of it this way: For decades (and for many still today), your electricity usage was “modeled.” That is, very occasionally, the energy company would send a representative out to take a meter reading, and, based on these periodic readings, the energy company would model (estimate) a bill for the other months when they didn’t (because it wasn’t technologically/economically practical to do so) take actual readings (i.e. measure).
As technology advanced, of course, energy companies have been able to move from a modeling approach of approximation, to a measuring approach of knowing precisely how much energy you are using.
Certainly, music being played at arenas – particularly pre-recorded music – could easily be measured, rather than still being modeled. For example, a Shazam-like listening device could be deployed to capture which songs are being played in real time.
In this manner, artists would know precisely when and in what context their music is being used. This would not only allow for artists to have better information, but for venues too to be able to have a better sense of the precise cost related to their music use.
In other words, currently venues must pay a blanket license fee that allows them to publicly perform anything in the PROs’ catalogs. Of course, they play only a fraction of the songs in the catalog, even though they’re paying for the right to play everything. But, if, instead, they could simply choose the precise songs they want to play, they could do a cost/benefit analysis, and pay for the songs they perceive as creating value, and not pay for the ones they don’t desire to use.
The artists could add conditions – for example, they might refuse to allow to have their music publicly performed during political events – and, via this measuring approach, the artists would know if these explicit conditions had been violated, and be able to take legal action, and/or raise their prices to address these unwanted usages.
Of course, there are issues with this approach. Dominantly, that while this modeling approach appears to be technologically feasible for recorded music at venues, this type of usage is only a fraction of the total usages – music in restaurants; small clubs; live music, generally, etc. – that require licenses. Certainly, blanket licenses (i.e. the modeling approach) was, and still may be, the most efficient way to address these types of usages.
However, as technology continues to advance, the ability to measure rather than model will become more pervasive, and even music performed live in small clubs will be able to be accurately tracked.
Would such a measuring model obviate the PROs? Perhaps. I suggested as much over a year ago in an article in this space entitled, “Bitcoin Can’t Save The Music Industry Because The Music Industry Will Resist Transparency.” But, perhaps not. The PROs – like any other firm – must innovate or die. Certainly, they could play the dominant role in leading this change, and, in so doing, secure their places going forward via adding value.
With respect to specifics around howBlockchain Technology would come into play, there are several reasons why this techwould facilitate this measuring approach in a superior way to a simple database solution:
First, the distributed nature of Blockchains would ensure that the data is immutable, and therefore difficult to be altered/co-opted.
Second, the potential for a more transparent record of the usages would allow for both those using music and those whose music is being used to not only know with some degree of precision the types of usage, but – through this knowledge – to more efficiently price the usages and provide evidence in the case of disputes.
Third, via the “smart contract” functionality related to Blockchain Tech, a set of rules and requirements could be created by both those who desire their music to be used, and those who desire to use music, and – when these requirements are met – transactions could occur in real time with more efficiency.
Fourth, new value could be created around the use of music, in particular with respect to those currently left out of the equation: Performers. Currently, if a song is publicly performed, for instance in a venue, only the writer is compensated; the performer of the song is not (when Whitney Houston’s version of Dolly Parton’s composition “I Will Always Love You” is plated at a stadium, Dolly Parton is paid, Whitney Houston’s estate is not). Rightsholders could require – via contract – that both performers and writers be compensated.
Fifth, dynamic pricing could emerge. As an example of going from modeling to measuring, think of how Uber dynamically raises their prices (the dreaded “surge pricing”) – via measuring – when demand exceeds supply, while the taxi industry dominantly uses a modeling approach, and does not dynamically alter their pricing. Music could do the same.
We’re moving from a society that models to one that measures. We see data going from unstructured to structured in everything from wearable health to sleep to productivity; soon we’ll quantify virtually everything in our lives in order to optimize our usages. Music will – sooner or later – move to this measuring approach as well, and – at that point – musicians will have vastly more degrees of not only control of how/when their music is used, but also how to monetize these usages.