The following op/ed comes from Keatly Haldeman, CEO of Web3 music sync licensing platform Dequency and a former CEO at music publisher, record label and sync specialist Riptide Music Group.
Much has been said about the exciting possibilities and opportunities that Web3, crypto, and blockchain hold for the music industry.
Still very much in its nascence, we’ve seen some promising use cases built with this new tech stack: membership clubs, tokenized royalty sharing, ticketing, virtual concerts, collectible goods and digital memorabilia.
The dream is for the collective management organizations (CMOs), digital service providers (DSPs) and major music companies to adopt shared standards for a singular on-chain global repertoire database and smart contract payment system.
Such a structure would allow for efficient and transparent royalty payments, largely eliminating the estimated $500 million to $2.5 billion in black box royalties that creators are missing.
Surprisingly, there isn’t much chatter about Web3 projects aiming to tackle inefficiencies with sync licensing.
I entered the world of crypto with a music industry background, most recently having served as CEO at music publisher, record label and sync specialist Riptide Music Group. With feet planted firmly in both music and Web3, I see exciting crossover and shared opportunities between these two sectors.
Traditional music companies provide white glove service when it comes to sync, connecting their catalogs with music supervisors when productions have the budget to support this labor-intensive process.
When it comes to smaller budget productions and creator content, however, where music clearance departments and high sync fees are way out of reach, often the only options are self-service online licensing platforms.
Such web-based sync platforms that offer commercial music act as intermediaries between rightsholder and licensee, typically impose standardized pricing for music, retain large commissions and take up to six months to pay the artists and catalog owners they represent. Most often, rightsholders are required to pre-clear their music for any use and are increasingly coerced into all-you-can-eat subscription models.
As a result, established artists and catalogs have largely abstained from making their music available to license online, reluctant to cede control to platforms where music can be seen as a commodity. Accordingly, the vast majority of the world’s music is inaccessible to users who struggle to navigate the byzantine system of traditional sync licensing.
“We have not had the technology and infrastructure to provide both simple licensing for users and efficient controls for rightsholders over pricing, approval, and payment. That changes with Web3.”
This status quo has not been established in bad faith; it has simply evolved from the fact that copyright licensing is incredibly complex and inefficient. We have not had the technology and infrastructure to provide both simple licensing for users and efficient controls for rightsholders over pricing, approval, and payment.
That changes with Web3. Using smart contracts and crypto payments, we are able to rebuild the licensing experience around individual rights-holder control and peer-to-peer transactions without middlemen. In doing so, we can envision a system where creators earn more and barriers come down for those who have been unable or unwilling to work with online sync platforms up to this point.
Here are four key developments I hope to see characterize an evolved, blockchain-based music licensing landscape over the next few years that would benefit creators, copyright owners and users. (Transparently, a lot of this is what we’re building at Dequency).
- Mass adoption of composable royalties routing, which is the ability for rights-owners to compose smart contracts with easy-to-use UIs. The benefit is not only the ability to program how revenue should be split amongst all the parties that make up both the visual and musical sides of a project, but also much-needed transparency around payouts and owners.
- Tools to facilitate efficient approvals for licensors: More established rightsholders, who need to maintain control of their sync usage, will finally be able to make their music available for licensing online and unlock creative music options for a new wave of licensees.
- Crowdsourced curation protocols: By launching an open, decentralized sync marketplace, some would rightly ask questions around quality control. The gatekeepers traditionally found at music companies provide a necessary filter for users to find high-quality and relevant music. A flood of half-baked content on any platform could deter higher caliber artists and make the system unusable for licensees. Crowdsourced, token-powered ranking systems can solve this issue, while creating a sense of community, financially aligned artist-to-fan engagements and a novel way to discover music.
- Efficient licensing and value-sharing systems for Web3 media: There is currently no standard licensing paradigm or payment bridge between the Web3 production world and the traditional music industry for music used in audiovisual media such as blockchain-based art, sports moments, collectibles, metaverse content, games or other digital products. Rather than an up front sync fee, both sides may benefit from a revenue share of primary and secondary sales of these goods, with instant payment for use of music administered through smart contracts.
#future #sync #market #powered #Web3 #tools #exciting #prospect