Blockchain – an ending or future for collective management organisations?

Dear members, everyone in the music industry is talking about “Blockchain” at the moment. But it’s not easy to find anyone who can explain in simple terms what it’s all about … By Vincent Salvadé, Deputy CEO

Blockchain - an ending or future for collective management organisations?

British singer songwriter Imogen Heap is said to be the pioneer in the practical application of Blockchain technology for music distribution: Since October 2015, her single “Tiny Human” can be purchased and licensed online via the platform Ujomusic. The payment of the parties involved is based on pre-defined distribution rules via crypto currency. (Photo: Screenshot ujomusic.com)

Blockchain is a technology, a database, a register. It enables the secure exchange of information in a network which is based on the contribution of qualified participants (miners) who check the validity of the transaction by means of the processing power of their computers. All transactions are grouped into blocks which are linked with one another and each participant can check whether the validation operation is correct. This is also how Bitcoin works.

You haven’t quite grasped all of the above? Me neither. It appears, however, that this technology which is based on “smart contracts” gets away without intermediaries: The composer could therefore be paid for concert tickets or music streaming directly. There is even word in the street that this could be the end of collective management organisations.

“Collective management of rights is more than just pure technology. It is based on an important value: a joint defence of creative work.”

Same old story: Since online music emerged about 20 years ago, people predicted that the internet would free authors and help them to become independent of intermediaries. Well, collective management organisations are still here and they constitute an indispensable counterweight to internet giants.

Collective management of rights is, after all, more than just pure technology. It is based on an important value: a joint defence of creative work. Authors will always need an organisation which supports them, which negotiates contracts for them (including smart contracts) and campaign for fair transaction conditions (even if they have been certified by the Blockchain).

But hold on a minute: This statement does not allow us to rest on our laurels. It’s the duty of collective management organisations to be interested in the Blockchain, to understand it and to try and use it for the utmost advantage of authors and publishers.

“Collective management organisations hold essential information which ensures that the remuneration is transferred to the right persons.”

SUISA collaborates with its sister societies to achieve this aim – in Switzerland and abroad. This technology could, after all, be instrumental in avoiding conflicts among rights holders with respect to a work or regarding their due remuneration.

Collective management organisations hold essential information which ensures that the remuneration is transferred to the right persons, and they also possess powerful IT instruments. So how would it be possible that they’re skipped in the transaction validation process?

One thing is for sure: You must not leave the technology companies alone to deal with these questions. Otherwise the Blockchain would become a blocking chain – at the detriment of creative work!

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