In early June Berklee announced the beginning of the Open Music Initiative (OMI), a collaboration between the Berklee Institute of Creative Entrepreneurship, the M.I.T. Media Lab, and globally renowned design firm IDEO. In addition to the three founding organizations more than sixty partners have signed on, including the three major labels, Google with YouTube, the Harry Fox Agency, Spotify, Pandora, Sirius XM, Netflix, and SoundCloud. Other endorsers are advocacy organizations like the Future of Music Coalition and Fair Trade Music, as well as academic institutions like NYU and University College, London. The goal is ambitious: to reinvent, build, and implement a new standardized digital architecture to track, account, and attribute payment for music.
OMI follows in the wake of Berklee’s Fair Music Report, released in June 2015. That report was critical of music industry payment practices (see The MBJ, Oct. 2015), though its reception was mixed. It is encouraging that many industry practitioners that objected to its findings and tone are nevertheless supporting OMI.
Many observers will note the similarities between OMI, and previous failed efforts at a centralized database for music’s metadata, particularly the demise of the E.U.’s Global Rights Database (GRD) in 2014. The OMI is different by design. While the GRD was focused on building a centralized database, OMI attempts to build an open sourced platform with a shared protocol, centered on cryptography, distributed consensus, and interoperability with future and existing systems. Instead of constructing a simple repository of ownership and attribution, OMI seeks to create a self-sufficient system that works with both open and proprietary sourced data.
The broad mandate of the initiative includes the promotion, on the one hand, of a new coded online standard (such as HTML was for the web and SQL was for relational databases), and the creation of an industry-wide research and development lab. The OMI initiative is based on MIT’s Pentalytics Model for driving systemic innovation. The five pivot points of the model are, respectively, (i) Entrepreneurs; (ii) Risk Capital; (iii) Corporations; (iv) Governments; and (v) Universities. Each has a role to play, and, simplifying, OMI would argue that it is necessary to empower entrepreneurs to bring new technologies to market, for governments to adapt policy and so remove roadblocks to growth, for corporations and startups in the private sector to encourage R+D and new partnerships, and for educators to reach out to stakeholders, keeping themselves and their interlocutors informed about changing new market circumstances in an unbiased forum where productive discussions can happen.
Currently, one of the most pressing issues for OMI is solving a recurrent industry problem: properly identifying rights holders. A disruptive and forward-looking industry database cannot presumably make progress without solving that Gordian knot. There is indeed no uniform way to identify rights holders at present, and this creates tensions. For instance, sound recording royalties for public performances cannot always be attributed clearly and a so-called “black box” distribution system is currently in place with royalties being doled out on the basis of a label’s market share. This has traditionally bread mistrust among artists, so if OMI is able to gain traction it could be slaying a big industry dragon.
OMI’s solution involves building a distributed ledger customized for the industry. It would use open coding architecture upon which the next set of applications and systems would be added. Technically, the core pieces of this ledger would be its blocks and the coded routines that would allow it to interact with a variety of different approaches to metadata already in use in the business.
OMI’s first task, then, is to design and build that distributed ledger. The blocks of the ledger are the record of the data being exchanged. They would confirm when, what, and in what sequence a transaction has occurred. Blocks would also serve as the jury and security of the authenticity of a transaction. In order for a transaction to be placed onto the public ledger a majority number of computers, known as the ‘nodes’ of the network, would need to agree that the details of the transaction were correct. This includes who participated in the transaction, what was exchanged, and who the original creators of the asset being exchanged were. The original creator would not have to be part of every transaction, as would be the case with derivative works such as remixes of remixes. In that case, the coding could require a simple majority of consensus from ‘the nodes’ pertaining to ownership. This consensus mechanism could also be used for dispute resolution or when a transaction has to be revised. This means that should a song be created, and re-entered in order to amend ownership splits, all computers on the industry chain would receive a notification to verify the change. The hope of this is that the method, and its transparency, will keep all parties appraised. There would be no place for backroom accounting once the song was uploaded.
The architecture that OMI is striving for is, of course, blockchain technology. But OMI plans to build as well its own Applications Programming Interface (API) to allow for other products and services to integrate the information contained within the blockchain. The API should make it possible to pull any or all data from the blockchain and use it for industry reference as well as royalty attribution. By open sourcing the underlying data, and providing easy to use access to it through the API, OMI hopes it will make it possible for anyone to experiment with new ways of experiencing music in all manner of future electronic devices.
To maximize the potential reach and impact of the initiative, OMI has to appeal to the self-interest of its five main subjects, viz,. entrepreneurs, corporations, governments, and universities. OMI believes that large corporations will likely be first users. This is because they have the capability to integrate OMI architecture into their operation and benefit from its workings. The hope is that they might also encourage adoption.
Still, not all corporations in the business are created equal, and the devil of OMI politics will be in the detail. The majors may see long-term benefits allaying artists’ suspicions about royalty obfuscation, saving costs, and simplifying operations, especially because they are in the public eye. But that may not apply to the publishing industry, that tends to be much more proprietary about their song ownership data anyway. The PROs follow in their wake, and the last time round scuttled GRD. Tech companies like Google’s YouTube, Spotify, Pandora, and Sirius XM are less concerned about direct ownership issues and just may be on OMI’s sideline, listening in.
Another key piece of OMI’s outreach is academe. All three founding members of OMI are directly involved with it: Panos Panay leads the Institute for Creative Entrepreneurship at Berklee, Michael Hendrix, with IDEO, collaborates with the MIT Media Lab and Berklee, and Dan Harple is a Berklee Trustee. Naturally, universities can provide much needed infrastructure, research capabilities, and large networks of people to draw on: students, alumni, and faculty. New generations, especially, may be inspired and take up the work in future. OMI has so far partnered with Drexel University, NYU, Northeastern/Herlihy Law, Queensland University of Technology, University College London, and USC.
Equally important, governments could get behind the OMI initiative, for it promotes a cultural commodity that is, arguably, second to none as a country identifier. Thus, looking forward, Open Music intends to work with public policy makers and advocate for its distributed ledger. Moreover, as the music trade involves intellectual property and is governed by copyright laws across the world, it will be important that whatever collection and payment systems are built are compliant with the laws and standards of each country. But US copyright law, for example, does not recognize many of the moral and neighboring rights that are enforced in Europe, and this has to be a concern. More standardized legislation would likely help OMI’s cause and fair trade on behalf of musicians.
Startup entrepreneurs are crucial to the success of Open Music. They would be the ones that would see the advantage behind OMI’s disruption of existing business practices. Startups likely need risk, or venture capital to get going and take a few years to get to market.
Therefore, to kick-start this piece of the initiative, OMI held a three week ‘summer design sprint’ in conjunction with IDEO. Eighteen student fellows from various partner schools, divided into six teams of three, took on a number of challenges.
First, what would incentivize artists to input their data into an open music platform? Without this, of course, OMI would be a fruitless endeavor. So a wish list of benefits was discussed, including giving artists the ability to collaborate more easily across the globe, the advantages of granular data about ownership splits and instant payment, and better attribution to sidemen and auxiliary help.
It was noted that music super fans used to be able to use liner notes to discover new connections between their favorite artists and their music but that was somewhat lost in the transition to digital consumption: a simple algorithm to search and rank searches of other musicians connected to the original artist could be easily integrated into a listeners streaming account of choice.
The second design sprint honed in on what new musical experiences could come as result of adopting a new open and trusted data source. Here the OMI fellows dreamt about the future. Some thought about augmented reality concerts with 360-video shoots customized by the user and integrated into future devices, a potentially lucrative new revenue stream for artists. Others experimented with attaching music to geo located beacons where instead of having a streaming service curate a playlist, a playlist would now be created for the listener as they went about their day. Many offered wearable devices that could pull biometric data to adjust plays to a listener’s mood. There was also a suggestion to create an app of unique song mashups live that would combine the weather in the user’s location and his/her personal calendar information.
It is striking that many of these ideas do not seem farfetched in the present juncture. The digitization of music, and all manner of electronic devices, is pushing the frontier forward. Still, negotiation for permits to use the music in such fashion can be cumbersome and often derail progress. OMI believes that progress cannot happen unless smart contracts and rights’ management controls can be integrated into the basic metadata of songs. This is a requirement for real time music trading and artist financing.
No doubt, OMI’s goals in this area are unlikely to be met anytime soon. But imagining a better future for the music industry by visualizing a new commoditization of recorded and live music transcends the business and may have ulterior consequences: the efficient trading of intellectual property in the modern digital economy is still a goal for many non-music businesses.
The report on the OMI’s hackathon with student fellows will be released soon online. In addition, a full 12-15 week lab will be offered by OMI soon in an effort to bring some of these ideas closer to fruition.
The biggest challenge of OMI will remain keeping its rosters of signatories happy. For this, it will need to deliver a workable proof-of-concept demo down the line. Even then, there will have to be a buy in by its signatories – especially by the right holders that are directly affected by the initiative and can make or break it: the record labels and the publishers. But artist songwriters are represented through their publishers, so songwriters too have to jump on board. It is not clear that this happened last time during the GRD negotiations, the closest attempt at trying something out like OMI. OMI’s Memorandum of Understanding, moreover, is not binding to the signatories, who are free to back out any time.
True buy in from rights holder is naturally key, since without access to the music, metadata, and the authority to integrate rights proper management controls, OMI could not really take off.
Ironically, another big problem is getting artists on board, both by them first entering the requisite song data that is needed for OMI to work and then by becoming proactive about rights controls when new broadcast or distribution technology develops. It is every artist’s right to do with their art as they please, but the business imperatives today demand more of their attention than ever.
By John Lahr