Future-proofing the music industry with Music Protocol
Music Protocol
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June 2nd, 2024

There is a growing consensus in the music industry that a global, digital database that properly and efficiently manages intellectual property (IP) and rights data is needed. A standardised repository to track IP ownership and usage is necessary for artists and rights holders to receive the appropriate compensation. This is particularly noticeable regarding publishing royalties, where approximately 25% of music publishing revenue fails to reach its rightful owners. Establishing a global repository for IP and rights data would enable anyone to more efficiently identify who controls the IP they wish to make use of (i.e. licence) and facilitate more efficient distribution of royalties to the rightsholders who are due payment.

While numerous initiatives have attempted to reform modern music ownership, the latest blockchain-based IP repositories go beyond that of a traditional database. They establish the essential infrastructure required to reshape the interactions among creators, users, and IP within the digital environments of tomorrow.

Future-proof infrastructure for the music industry

The transparent, decentralised, and immutable nature of blockchains allows artists and rightsholders to establish undisputed digital ownership of their intellectual property – without the reliance on a central authority. This implies that all relevant IP data – including who created what, who owns what, and where it is used – is universally available without relying on an intermediary for data management or security. The “IP tokenisation” process is a key differentiator to Web2 data management practices – converting traditional IP and its associated rights into programmable tokens on the blockchain. This allows smart contracts and specialised IP modules to perform certain automated processes, such as transferring ownership, managing royalty distribution, or licensing the rights for AI model training. These IP modules can be interpreted as "APIs" that automatically enforce pre-set terms and conditions for its use on the Internet. Embedding the rights and licensing agreements directly within the digital IP asset enables the widespread use and exploitation of IP. This turns music IP from a static to a dynamic asset, facilitating efficient rights management, streamlined licensing, and appropriate compensation for rights holders.

Mirroring general purpose platforms to the music industry

A general purpose technology is a type of technology that has broad effects across an economy, impacting multiple different industries and spurring further innovations. These technologies are characterised by their versatility, pervasiveness, and potential to improve productivity and economic growth. Electricity is a great example of a general-purpose technology. Electricity powers homes, businesses, and virtually all of our electronic devices – it powers the economy and serves as infrastructure to spur further innovation. We can plug devices into electrical sockets and use power without considering the complex energy processes occurring behind the scenes. With Music Protocol, we are reiterating on this idea, specifically designing a general-purpose platform for the music industry.

Just as electricity fueled societal progress and transformation across multiple dimensions, Music Protocol is designed to transform the complex industry operations and IP management processes in the music industry. It enables artists, labels, DSPs, and other stakeholders to seamlessly connect to its infrastructure and manage ownership, rights, and financial distribution efficiently – without needing to grasp the technical underpinnings of the system.

Like electricity spurred further innovations and led to economic growth, Music Protocol intends to grow and future-proof the music industry. It does this by serving as a data layer for global ownership and control of musical works while fostering IP evolvability and scalability through its programmable IP layer. By facilitating the adaptation and evolution of IP, it sets the stage for novel IP exploitation and further innovation.

Looking ahead with Music Protocol

Suppose the music industry wants to keep up with innovation and address the needs of tomorrow’s digital consumers. In that case, it will require a more agile and future-facing approach to IP management. With the vision of an open, transparent, and flexible blockchain-based framework for music IP management, the Web3 Music Association is developing a programmable IP layer with Music Protocol. The protocol is designed to power network economics while serving as a pervasive general-purpose platform. It lays the groundwork for dynamic IP assets, enhancing the IP's value as it evolves alongside emerging technologies such as AI and the Metaverse. By future-proofing the industry’s foundations, the music industry can unlock its full creative and economic potential, paving the way for growth.

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