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The Fragile State of Music Blockchain Development

Keynote talk about the challenges facing Music and Blockchain

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The Fragile State of Music Blockchain Development

  1. 1. A Strong Wind Could Blow It Over The Fragile State State of Music Blockchain Development George Howard, Berklee College of Music
  2. 2. Outline of Talk General understanding of Fragility v Antifragility Examples of Blockchain tech’s increased Antifragility Reasons why Music and Blockchain are Fragile Best Practices for Forward Momentum
  3. 3. Fragile v Antifragile Lindy Effect: The future life expectancy of some non- perishable things like a technology or an idea is proportional to their current age, so that every additional period of survival implies a longer remaining life expectancy. (Cite: Wikipedia) Fragility: Things that are 'fragile' suffer from spouts of disorder, volatility, and uncertainty. An antique glass on a flimsy corner table. It looks pretty and holds up nicely, until a small disturbance nudges the table and knocks the vase off. Shattering it. (Cite: Zerohedge) Antifragility: Hydra, the greek mythological creature that has numerous heads. When one is cut off, two grow back in its place. (Cite: Farnam St)
  4. 4. (Non music) Blockchain Anti Fragility IBM Food Trust: Supply Chain Management: Food Safety Plastic Bank: Turning ocean plastic waste into currency World Wire: Cross border payments Land title registry Etc (You even hear the word in ads)
  5. 5. And yet...Music - a PERFECT use case for Blockchain….Not so much to show for it. Deeply FRAGILE The music industry has - since inception - existed as a set of non-interoperable verticals This state was a result of both intentional information arbitrage and lack of technical solutions (modeling rather than measuring) The byproducts of this fractured ecosystem include: lack of artistic autonomy, information asymmetries (benefiting incumbents), massive barriers of entry to music adjacent/orthogonal firms, confusion (and thus transaction costs); vastly sub-optimized licensing practices
  6. 6. Historic “Solutions” GRD Various Representative Organizations APIs Matching of ISRC to ISWC Mergers of necessity (HFA/SESAC) Now the MLC...we shall see -You don’t cut off the branch of the tree upon which you sit
  7. 7. Points of Failure With Respect to Blockchain and Music
  8. 8. Fundamental lack of understanding of Music Copyright Attempting to license non-Controlled composition works is essentially a non-starter. Most people IN the industry don’t understand the complexities around sound recording and composition compositions; those from outside the industry….oy! Stir in derivatives, co-writes, etc….doesn’t work.
  9. 9. Over- estimation of Smart Contracts’ efficacy So called “Smart Contracts” are neither “smart” or, prima facie, a contract. They are binary, if-this-then-that, rules. While Moore’s law acceleration will likely lead to much more robust usages, participants in the music industry who attempt utilize smart contracts to dis-intermediate/automate complex transactions will fail.
  10. 10. Lack of ”network effect” generative products Too many startups think that by simply adding the word “blockchain” to their product, people will care. They will not. In fact, we will know blockchain-based music startups have arrived when people stop saying the word Blockchain. We need product/market fit and a robust two-sided market that is enhanced, but not defined, by blockchain
  11. 11. Failure to assume evil with respect to Incumbents Sandbagging - creating projects intentionally doomed to fail in order to provide PR cover/artist relations - is a very real thing. Startups whose business model/success requires buy-in from an incumbent will die of both a thousand cuts AND a high-profile flame out.
  12. 12. Approach Begin with controlled compositions Coordinate and incent artists and “caretakers” via issuance of tokens Overcome network effect issues via coordinating and incenting the other (buy) side of the market via both clean rights and token issuance (ala tax credits for films); majors arrive via Innovator’s Dilemma
  13. 13. Precedent exists The SABRE database that has powered and massively grown the travel industry since the 1950s is a precise analog to what the music industry could/should be. Think of it this way: 1. In 1984 if you wanted to book a trip, you either spent all day on the phone or utilized some costly intermediary (travel agent) to book your trip. 2. We license music today, the same way we booked travel in 1984 It doesn’t have to be this way, and the suggestions above would increase benefit for both incumbents AND startups/artists.
  14. 14. Outcome ● Large database of machine-readable works that are licensable with no intermediary and little-to-no transaction costs ● Numerous top of stack UIs constantly pulling from/adding to the substrate layer ● Firms heretofore barred from utilizing music enter and energize the entire space ● As the tech grows, add complications ● Standards/Metadata is set via efficient market use rather than top-down mandates ● Innovator’s dilemma tug eventually draws in more established catalog ● Vast new revenue streams emerge ● Free market / non compulsory / non governmental
  15. 15. Thank you George Howard, Berklee College of Music @gah650 Shameless plug for my new book