Spotify Turns to Blockchain Technology to Pay More Royalties to Artists

[miniyou64]

New music and rights are kinda easy to figure out. Old tracks not so much.

Can you explain what you mean by that?
I'm very interested in this

 

[Rigby]

Are other streaming services struggling to figure out who to pay for the songs they're playing? Is this information so uniquely hard for Spotify, and Spotify alone, to come by that they needed to buy startup tech to figure it out? Something just doesn't add up.

According to this article it apparently does affect other services as well:

https://techcrunch.com/2017/04/26/s...diachain-to-solve-musics-attribution-problem/

"According to the NMPA, Spotify had failed to obtain mechanical licenses – which refer to a copyright holder’s control over the ability to reproduce a musical work – for a large number of songs on its service, The New York Times had reported. The issue could impact other streaming services as well, the NMPA said, estimating that as much of 25 percent of the activity on streaming platforms is today unlicensed."
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I don't get how a company adds music to its servers and then makes millions of copies of the songs available to its customers without knowing where that music came from.

The attribution problem is a bit more complicated if you have millions of songs and serve dozens of countries all with different licensing situations, all the while the rights to music are sold and resold between publishers all the time. Blockchain is a public ledger system that allows tracking transactions (such as the selling of music rights) in a verifiable way. So if for example multiple publishers claim the rights to a song, a blockchain could prove who is right. Conversely, if nobody claims the rights, the chain of transactions should allow identifying the current owner.

 

[sudo1996]

You've got it backwards. Blockchain isn't anonymous at all. If you want to do money laundering, you do it with cash or gift cards. Those are completely anonymous and untrackable. Blockchain is easy to track - every unit is clearly labeled with every person who has ever had possession of it.

There's nothing tying your real identity to the entry in the blockchain. For example, Bitcoin is currently the currency of the online black market, and the blockchain is used so everyone can agree that a transaction is valid.
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Blockchain is ground breaking technology that forms a distributed ledger, every company will be using some form of it in the future. Read up.

Yes, I read up on blockchains a while back, but I don't remember all the details now. Something using hash chaining. I have nothing against blockchains (of course), only in some ways the anonymous cryptocurrencies that use them, but those are justifiable in certain countries with oppressive governments.

Anyway, the reason I brought it up is they were talking about paying artists, so I thought cryptocurrency was involved. Not sure what they need a blockchain for besides that. It's meant for distributed, self-governing systems, but why does it matter to them? They control everything on their end.

 

[gnasher729]

I didn't realize that you need special startup technology to figure out who wrote the song your service is streaming. Other streaming services must really be struggling to figure out who wrote what. I just assumed Spotify just wasn't paying fairly. Silly me.

To do any streaming of any song legally, you must have a license that allows you to stream that song. You also must _know_ that you have a license that allows you to stream that song. If you don't know what the song is, you can't stream it, because if you do, you might commit copyright infringement.

And usually for streaming you get a license by agreeing to pay someone some amount of money for the privilege. So it should be impossible to not know who to pay for streaming. If you don't know who to pay, you don't have a license, so you can't stream.

 

[Canubis]

I appreciate that you're explaining a bit about improving artist compensation. Can you also explain this focus of the article:

The blockchain component aims to help creators and rights holders prove they are the owner of a piece of work and receive due payment. Spotify has faced legal trouble in the past over its failure to pay artists and publishers, which is said to be down to difficulties it has had in working out who to pay...
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Are other streaming services struggling to figure out who to pay for the songs they're playing? Is this information so uniquely hard for Spotify, and Spotify alone, to come by that they needed to buy startup tech to figure it out? Something just doesn't add up.

Tbh. I am not sure if the author of this article is connecting the dots right here to start with, meaning if the acquisition is in any way actually connected to legal and reporting problems in the past. Or if the acquired technology is actually for a (still secret) side project – a lot of companies are experimenting with blockchain right now and how this could extend their business over the next decade(s).

Also, who is saying other's don't have similar problems? I have by no means any insider knowledge of the background behind this acquisition and also don't know the detailed processes Spotify is using in reporting revenues. However I am aware that the licensing of music is not such a simply subject as some may believe, as in most cases Spotify (just like any radio or tv station who are licencing a song) are in no direct business relationship with a single artist. Besides a manager there usually is at least one label and publisher (often more), there are aggregators and content distributors in between and then there are royalty collection agencies, at least here in European countries. So in fact there can be different entities who the party that acquires a licence to publicly distribute a song may have to pay royalties to. This gets even more complex with different local laws or with 1 song for example coming from several different distributors (e.g. 1 giving you permissions to distribute the song in region A, the other one for region B). Just think about a song being part of several compilation albums.
Another factor adding complexity could be if Spotify is not getting their music files directly from labels/distribution partners but from other sources - though not sure if this is the case. (I am just thinking about Youtube here, who pay royalties for the music people have uploaded as part of their videos.)

 

[Kabeyun]

Tbh. I am not sure if the author of this article is connecting the dots right here to start with, meaning if the acquisition is in any way actually connected to legal and reporting problems in the past. Or if the acquired technology is actually for a (still secret) side project – a lot of companies are experimenting with blockchain right now and how this could extend their business over the next decade(s).

Also, who is saying other's don't have similar problems? I have by no means any insider knowledge of the background behind this acquisition and also don't know the detailed processes Spotify is using in reporting revenues. However I am aware that the licensing of music is not such a simply subject as some may believe, as in most cases Spotify (just like any radio or tv station who are licencing a song) are in no direct business relationship with a single artist. Besides a manager there usually is at least one label and publisher (often more), there are aggregators and content distributors in between and then there are royalty collection agencies, at least here in European countries. So in fact there can be different entities who the party that acquires a licence to publicly distribute a song may have to pay royalties to. This gets even more complex with different local laws or with 1 song for example coming from several different distributors (e.g. 1 giving you permissions to distribute the song in region A, the other one for region B). Just think about a song being part of several compilation albums.
Another factor adding complexity could be if Spotify is not getting their music files directly from labels/distribution partners but from other sources - though not sure if this is the case. (I am just thinking about Youtube here, who pay royalties for the music people have uploaded as part of their videos.)

True, valid. Other streamers haven't been sued by the NMLA though. Maybe they will. And the $5M punitive part of their settlement suggests to me that Spotify didn't just have an oops-we-goofed-because-this-is-unreasonably-complicated moment.