Musicians Turn To Bitcoin, ‘Why Didn’t We Hear About This Before?’

When Jamie Bartlett first came across Bitcoin’s blockchain, he claims he was making purchases on SilkRoad, using the digital currency bitcoin. He went on to learn about the technology which underpins the currency, the blockchain.

“Incredible opportunities present themselves, with new types of digital technology. How can we use that in a way that works better for everybody. That’s what we are here to talk about. To imagine the future of the music industry. A better future of the music industry.”
— – Jamie Bartlett

On Oct 2, Bartlett chaired a panel of industry and technology experts at Guardian Live – The new music industry with Imogen Heap. “A special event that could mark the beginning of a fresh set of standards and an entirely new way forward for the music industry,” states the event.

“Something you are going to hear about today is something called the blockchain. It sounds quite terrifying and complicated. It’s not.”
— – Bartlett

Music is heard and enjoyed more than ever before, yet the industry has halved in value and creators are struggling to get a fair deal. Many musicians are wondering where all the money is going. The Berklee Institute for Creative Entrepreneurship released a report earlier this year, Transparency and Money Flows, detailing a lack of transparency in the music industry. It also highlights the complexity of the current system.

Paul Pacifico, Featured Artists Coalition (FAC) CEO, joined Bartlett on the Guardian Live panel. Pacifico agrees with the Berklee report, the music industry is still stuck with an architecture established in the 50s and 60s, and it can take years for money to get through to the artist. “Money goes in at the top and it sort of stays there […] artists have no way at all of knowing what actually happens to it and when you try and find out, the minute you try and look one link in the chain above you, you’re met with a concrete wall of non-disclosure agreements.”

The money, specifically Royalties, are calculated and collected by different rules in almost every country. The bulk of this work is performed by Performance Rights Organizations (PROs), who handle the payments for a specific region. When a songwriter is located in another country, PROs pass payments between each other. It is then expected to be passed on to the publisher, who then pays the artist.

This process results in a “black box,” which represents millions of dollars held in escrow accounts around the world. The funds end up here when PROs cannot see a clear path for payment, resulting in delayed payment, or no payments at all.

The Berklee report outlines that anywhere between 20 to 50 percent of music payments do not make it to the rightful owners. Allen Bargfrede, Associate Professor at Berklee, told National Public Radio that these percentages are lost in limbo, "I personally believe the number is closer to 20%, especially in Europe and North America, but probably can be as high as 50% when you start to look at streaming payments in other languages that have different character sets."

“We are now at a crossroads where huge decisions are being made that will impact the future of the music industry.”
— – Guardian Live

Zoe Keating, an independent artist who spent her 20’s as a data analyst and information architect, was also a panelist at the Guardian event. “Why is it that music is this ridiculous black box?” she questioned, “The technology has arrived and what we need people to think about is, what kind of structure, what kind of architecture could we make?.”

Keating originally introduced Imogen Heap to blockchain technology, who is credited with leading  a rising chorus of artists and coders who are using blockchain technology to revolutionise the way music is shared.

Heap is hoping to use blockchain technology to turn the music industry on its head. She intends to focus on transparency and instantaneous, direct payment. Heap describes a process that seems far fetched to some, but the technology is very close to being there. “When somebody listens to a track […] it immediately recompenses me, and then I can split it off.”

Bitcoin allows payments to be automatically forwarded, no need for PROs. “Instead of having to wait two years, sometimes, even more, for money to come back to me, it can be instant,” Heap explains.

Bitcoin payments can also be for incredibly small amounts, 0.00000001 BTC is currently the smallest possible payment, or US$0.00000251. Every single view, download, or listen can now be paid for, promptly.

Heap has done a great deal of research into blockchain technology, and along the way she was introduced to Vinay Gupta and Vitalik Buterin, of the Ethereum Foundation. This non-profit organization’s mission is promoting the development of new technologies and applications, especially in the fields of new open and decentralized software architectures. “I met all of these people who’ve got these amazing platforms that they’re already building with similar models,” she said.

The idea Imogen Heap is currently working on goes by the name of Mycelia. In an interview with Forbes Magazine she described the idea as a system, library and database. The creative content is hosted by “Spores,” which form a collective foundation. The services which artists and users engage with are provided on top of this foundation, and are referred to as “mushrooms.”

“This Spore, verified by the content creator, is then used by all services ‘looking’ for it.  The Spore contains all information the artist can and wishes to input. The more elaborate and detailed, the more fun and useful the services can be when pulling data from within it. So essentially, embedded within the Spore are ‘rules’ as to who can do what with it, when, and how.”
— – Imogen Heap

This new platform could provide artists with exclusive control over their work, when they get paid, what they charge, and who they split the money with. Blockchain technology makes this a reality.

“Now we are in a position in which the technology is here. Everybody is talking about the ‘internet of things,’ [where] everything is talking to everything else. We can track everything.”
— – Zoe Keating

While details of the project are yet to be released, the idea that artists should have transparency, and fair payment for their work is not new, as Paul Pacifico put it, “The music industry is being turned on its feet. It’s sort of being turned upside down, but it was kind of upside down in the first place.”