Digital music is hitting bum notes - can data make it better?

Ten years have done little to solve the fragmented nature of the digital music industry and improve conditions for artists. Despite on-going funding and acquisitions to improve technologies and streaming or download services, is the battle for digital music service supremacy really doing anything for anyone but the services themselves?

Deezer which raised €100m in January to “drive growth” now claims to have 40 million songs in its catalogue. In February, YouTube bought San Francisco online music firm BandPage to try and improve its services and grow its revenue streams for new music. Spotify, which was founded 10 years ago in April this year, recently bought Cord Project and Soundwave to boost recommendations and mobility.

The recent flurry of activity suggests progress, new technologies to discover new music, new platforms to share information and market bands, new data to harvest and monetise. Yet something is still not right.

Nearly a decade ago was sold to CBS for £141m ($280m). It was one of the pioneers of internet music radio and streaming, founded two years after Pandora in 2002. It was the golden child of London’s Shoreditch-based Tech City too but that was its peak and the service has arguably been in decline ever since. This has been due in large part to other services doing what did better.

Spotify in particular stole its mantle and remains perhaps the most rounded music streaming service on the market today. Throw in Deezer, Amazon Prime Music, Apple Music, Google Play Music, YouTube, SoundCloud and even Napster and you have a range of services vying for market share. For consumers this represents healthy competition. Not a bad thing.  But all is not well.

When musicians start suing streaming services you know something is up. In December 2015 US musician David Lowery filed a $150m class action lawsuit against Spotify claiming it knowingly distributes copyrighted content without license. Singer-songwriter Melissa Ferrick has recently filed a similar suit.

Controversy is never far away. In 2014 Taylor Swift and Adele blamed paltry royalties as reasons for not putting their new music on Spotify, something which Spotify consistently refutes as a myth. It did in fact respond to Taylor Swift in 2014 by publishing her royalty payments. Swift was at it again last year causing Apple Music to change its payments policy. It seems increasingly indicative of a headless industry and it’s not as if the services are making money either.

Lost and found

Despite revenues of over €1bn ($1.1bn) Spotify suffered losses of €165m ($183m) in 2014. It tells not just the story of Spotify but the story of a complicated industry, with too many takers in the value chain and too many middlemen. The confusion and lack of transparency across the industry on copyright and royalties has even led to further start-ups.

Jeff Price’s Audiam, for example, raised $2m in 2014 to initially target royalty payments from YouTube, although it now covers the whole gamut of streaming services. It labels itself as “an interactive streaming mechanical royalty collection agency” that has a growing list of clients (including Bob Dylan, Jason Mraz, Red Hot Chilli Peppers and Metallica) searching for lost royalties.

“I was right about the internet. Tell me a musician who’s got rich off it,” said Prince last November. Perhaps Audiam is about to change all that. Prince recently talked about recovering $15m in royalties since its launch and reckons there is plenty more, with streaming services failing to pay royalties on an estimated 20% of all streams.

But surely this is just a sticking plaster. It won’t really solve the problem will it? Audiam confesses to pouring over spreadsheets searching for discrepancies between streams and payments, hardly the stuff for global scaling. Great for its client base but not really a long term solution.

Will the Fair Trade Music campaign do any better? As with food it’s a great idea but a slow burn and with copyright issues digital music is a more complex conundrum. Perhaps the industry should revisit the idea of a global music rights database, an idea floated at a recent BPI event on the potential impact of blockchain on the music industry.

Blockchain database

So far this has proved a non-starter. The last attempt, the Global Repertoire Database in 2014 came to halt after apparent differences over funding. So can it work again? Technically it is surely possible. Despite the potential complexities of cross-border regulation and remuneration, a data-driven, blockchain structured solution could solve the problem.

About a year ago, Rethink Music (a joint initiative by Berklee College of Music, Midem and the Berkman Center for Internet and Society at Harvard University) released a report which suggested blockchain as an alternative methodology for tracking payments and copyright. It also suggested a ‘Creator’s Bill of Rights’ and a decentralised rights database. All good stuff but that was a year ago.

At the recent BPI event in London, Pledge Music founder Benji Rogers and singer-songwriter Imogen Heap supported the blockchain idea and Rogers talked about re-igniting the open rights database project. It is of course not without its challenges. Who funds it and who runs it? And of course there is the sizeable challenge of getting all the industry services, publishers and distributors to agree.

If this is achievable then Rogers’s idea is not such a bad one. The basic premise is that there will be a new digital format using minimum viable data, such as recording ownership, publishing information, mechanical rights, performer data and so on. This data would be encrypted into the song file in a blockchain format, or .bc file and ‘instruct’ the various players and services how this particular file can be used. This usage will be recorded and payments will be allocated automatically via the cryptocurrency infrastructure.

Of course it’s easy to pick holes given the potential technical and logistical issues but you have to start somewhere and so why not here?

According to the IFPI’s 2015 report, chairman Placido Domingo wrote: “We need a world where copyright is respected and music is valued – where artists, songwriters and record producers are fairly compensated when their music is played.”

Unless the industry adopts data-driven, transparent technology using a de-centralised database, this will never be a reality. Until that time there will always be more copyright issues, lawsuits and probably service closures. And that’s no good for anyone.


Related reading:

Digital technology lets musicians play on

Human League’s Martyn Ware on tech and music change


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Marc Ambasna-Jones

Marc Ambasna-Jones is a UK-based freelance writer and media consultant and has been writing about business and technology since 1989.

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