building huge, centralized databases that would contain all of the data needed to manage rights and process royalty transactions. The biggest and best-known of these was the Global Repertory Database (GRD). These projects all failed. They failed for a number of reasons, including the sheer complexity of gathering and maintaining all that data in one place as well as funding and control issues.
Blockchains are a completely different approach to this. Instead of large, monolithic databases that some entity has to own, blockchains provide distributed, reliable, lightweight data sources that are potentially accessible to all – but not owned by anyone. They also support an approach where, instead of putting all of the data into a database, the blockchain contains only enough data to identify copyrighted works and rights holders, and links to outside sources to provide the rest of the information that you might need, say, to process royalty transactions of a certain type.
There are various startups and standards initiatives working on blockchain applications for music. Most of them use blockchains for various forms of “behind the scenes” or “B2B” rights and royalty processing, as opposed to direct-to-consumer applications. All of the B2B blockchain projects I’m aware of have one thing in common: they all store associated transaction information on blockchains, but the music itself exists outside the blockchain. Blockchains aren’t efficient enough today to store the digital content along with transaction information, and there is no compelling reason to do so anyway.
So, we need another step?
Yes, we need to create links between transactions on blockchains and the music files that are the subjects of the transactions. That’s done by putting an identifier in each transaction record that matches an identifier in each music file. This approach works if the identifier is associated with the music file in a robust and immutable way, and is appropriate for the application. Again, the best way to do this is with watermarks in the digital music files that contain identifiers that are also stored on the blockchain.
What’s your advice to the music industry?
Watermarking should be a key component of blockchain-related infrastructure for digital music. It ensures that metadata associated with music files has the same degree of persistence, reliability and security as information stored in blockchains, and it does so in a lightweight, flexible and interoperable way. I think that technologists building blockchain-related solutions for music should take a serious look at watermarking, because many of those solutions will benefit from it.
Find out more about blockchain, audio watermarking and the music industry by downloading the free white paper commissioned by Digimarc and authored by Bill Rosenblatt.