Sing a song of blockchain: will it replace collecting societies?

Published on 1st Sep 2017

Copyright collecting societies exist to track performances or copies made of sound recordings (or other copyright works), and ensure that the copyright royalties paid for such use is distributed to the various parties entitled to the copyright. This will include not only the original composer of music and (if separate) author of lyrics, but also the performer(s) on any given recording and also the record company responsible for making the recording. Since any or all of these may also assign or license their share from time to time, maintaining a complete and accurate record of who is entitled to what proportion of any given payment is a particularly complex task.

The management of copyright through collecting societies emerged as a mechanism to facilitate licensing, since tracking use of a work is a labour-intensive task beyond the resources of many individual right holders – and enforcing copyright, where it is used without permission, even more so.

How can blockchain help with this task?

Three of the world’s largest collection societies are now working in partnership with IBM to prototype a new shared system for managing authoritative music copyright information using open source blockchain technology from the Linux Foundation. The objective is to model a new system to manage the links between two data sets: the International Standard Recording Code, an international standard code for uniquely identifying sound recordings and music video recordings under ISO standard 3901, and the International Standard Musical Work Code (ISWC) which identifies a musical work as a unique intangible creation of one or more people, under ISO standard 15707. Linking this data accurately and automatically – a non-trivial task given that the same work may have conflicting identifiers used by multiple rights holders – will improve the processes of royalty matching, which will in turn speed up licensing, reduce errors and reduce operating costs.

Indeed, once a shared, decentralised database of musical work metadata with real-time update and tracking capabilities has been developed, then the on-going role for the collecting societies themselves may be reduced to that of enrolling new participants and inputting changes (such as royalty rates, licences or inheritance of rights on a member’s death).

But if blockchain can make the collecting societies’ lives that much easier, might it also empower the copyright owners themselves to manage the exploitation of their rights without the collecting societies’ intervention? Digital copyright exchanges, which are already being developed, could enable registrations of data attribute information and ID information, such as the content and authorship of the work, then manage access control policy in order to limit users who can obtain the data and ensure that the data exchange between the provider and user is based on the policy set in advance.  So a copyright owner who is happy to licence all-comers based on standard terms will in principle be able to handle the granting of licences automatically.

Enforcing against infringers

Enforcement, however, may still require real-world action, in whatever jurisdiction the infringement takes place. Just because authorised use is made efficient and simple through the blockchain and smart contracting, does not mean unauthorised use will somehow cease.  The collecting societies operate through a global network of mutual assistance, so that enforcing copyright in China or Japan is done locally by the Chinese or Japanese collecting society, with all their familiarity with local options.  With the best will, and economic incentive, in the world, few individual copyright holders will ever be able to police their rights in many such far-flung jurisdictions.

Blockchain may change the collecting societies’ operations, hopefully for the better. But it is unlikely to put them out of business any time soon.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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