Understanding Music and Blockchain Without the Hype : Revisited

A Guest Post By Alan Graham of OCL.

Two years ago, this month, I wrote an article here called “Understanding Music and Blockchain Without The Hype“. As with any nascent technology that shows a great deal of promise, there’s generally a tremendous amount of hyperbole as to what’s possible. A lot can happen in two years and frankly a lot has happened since my original piece ran. I felt this would be an excellent time to revisit that article and see where we are. This is a long one, but if you really want the skinny, no BS on music and blockchain, you’ll stay until the end.

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The Recap

As a blockchain pragmatist, I’ve always been a supporter of many ideas proposed (better data/improved efficiencies), but skeptical of whether or not any of them actually improve the current situation, exacerbate it, or are in fact possible. Every study I read has clearly been approached from the foregone conclusion that blockchain is the future, without any critical pushback. For two years I’ve been trying to dispel some of the hype.

We’ve seen the hyperbole hit new seemingly impossible heights, promising unicorn dreams of fantasy technologies, improbable cost savings, impossible business models, and instantaneous payments direct to artists without any “middlemen”. Ah the dreaded all encompassing, yet nebulous middlemen. Financial death by a thousand cuts.

The idea that’s been pushed from Day One is that with blockchain we can eliminate all those parties in the middle that take their commissions and cuts and replace it with a world computer using “smart contracts” that automatically just make money, and know who to pay…instantly. Huzzah, problems solved!

IMG_0069Detecting a theme here

Granted, there are many layers of third parties who create inefficiencies in systems, but there are also many useful middlemen, like service providers, the people who build and run things so stuff works. But what I’ve seen proposed the past two years for blockchain is actually the elimination of one set of middlemen for another set of middlemen.

Blockchains are not autonomous god computers that just do your bidding. They require service providers to make things happen (core programmers, hosted nodes, miners, wallets, etc). You can’t just eliminate companies that provide services and expect there to be some universal user interface that will handle all of your needs. Someone needs to build and run this stuff, and they will surprisingly want to be paid. As for cutting costs, those costs can only go so low. There’s this perception that blockchain companies provide cheaper solutions, but we’re talking fractional cost savings. These savings may eventually cost more, not less over time. Building world class technology and then running it costs money. If your royalties vanish in a hack, you’ll want to be able to call someone, not talk to a bot.

Capto_Capture 2017-08-08_02-50-20_PMIdeal, but unlikely

Back in my original article I said that those working in the blockchain space would have to solve five critical issues for creative industries, or the whole exercise would be a complete waste of time and money. Those included Authority, Immutability, Scalability, Legacy, and Privacy. I’m going to touch on a few, and ad two new ones. Let’s recap with some commentary:

Immutability: this is one of the most misunderstood, yet more actively promoted ideas of blockchain, the idea you can and should write a permanent record of data that no one can alter ever, into a giant sky god database. It is an idea being pushed and sold because it isn’t fully understood. I’ve yet to see one single necessary music data use case for this.

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Except the music industry isn’t a trust-less system

Ask yourself, is immutability really the most important aspect for data or better yet a fluid, yet documentable series of committed changes (history) backed by a proven authority? Because the later can still tell you everything about an asset, as well as who owns it and how to pay them “instantly“.

Gideon Greenspan, an expert on blockchain technology, has the following to say about Immutability (I also recommend watching this video on blockchains vs databases):

In the raucous arena of blockchain debate, immutability has become a quasi-religious doctrine – a core belief that must not be shaken or questioned. And just like the doctrines in mainstream religions, members of opposing camps use immutability as a weapon of derision and ridicule.

In blockchains, there is no such thing as perfect immutability. The real question is: What are the conditions under which a particular blockchain can and cannot be changed? And do those conditions match the problem we’re trying to solve?

To put it another way, a blockchain’s transactions are not written into the mind of God (with apologies to Augustine above). Instead, the chain’s behavior depends on a network of corporeal computer systems, which will always be vulnerable to destruction or corruption.

The Blockchain Immutability Myth

Gideon Greenspan PhD Computer Science

CEO Coin Science


Ever since this idea popped up, I’ve been saying that the problem with immutable data is that human beings are illogical and therefore business logic tends to change rapidly based on the nuance of human behavior. This isn’t just because people fight over money, territory, or credit for something…it is because the behavior of how citizens interact with technology changes so fast, you need something flexible and fluid that can always change with the immediacy of how we change our habits. Especially when it comes to media.

Devices like Alexa, Google Home, and Apple’s HomePod have seemingly come out of nowhere to become digital hubs, and their long term impact has yet to be felt, but markets are already moving. And in 3 years, we’ll have something new. Therefore there’s zero practical logic for immutable business logic, especially if we consider that we’re just beginning to start a digital journey into a future where we don’t know how we’ll be interacting with media or the systems that will exist 5-10 years from now. This is why locking things with DRM is a bad idea. You can’t plan for obsolescence these days because it comes at you fast, so seemingly good ideas turn horribly bad when suddenly 1B people can’t access things they legitimately paid for because an app goes out of business.

A lot of blockchain development is trying to force blockchain what it isn’t designed to do, what it was never intended to do. Square peg, round hole.

The Zen approach is to build systems that aren’t rigid, but can bend. Systems that are rigid are systems that break. You know whose really good at dealing with stuff like this? Programmers!

Instead of thinking about metadata and ownership information of creative assets as just this data/file problem to solve when we release them, perhaps in our current world, we should be taking a cue from programmers and thinking about dealing with media in the way programmers write and deploy code, particularly what’s called version control systems:

“In computer software engineering, revision control is any kind of practice that tracks and provides control over changes to source code. Software developers sometimes use revision control software to maintain documentation and configuration files as well as source code.”

For example, let’s look at something called Git, a very popular system of revision control that was created by Linus Torvald, you know, the guy whose code is the foundation for some things you may have heard of, like Linux and Android.

Projects that have thousands or millions of lines of code with many people contributing to that code from all over the world requires a way to track the changes made to the project, who made those changes, and be able to see all of this historically (see branches). Sound familiar?

If we were to think about the release of a creative work (like an album) in the Git Model, you’d find that much of what’s desired to solve the music industries issues of data, negotiations, contracts, ownership, regulation, laws, rates, regions, etc. are things that have already been worked out before, for massive software projects that run on billions of devices. The data necessary to describe a piece of media is tricky, but no more tricky than the code in your average iPhone app. Git is scalable, battle tested (12 years), can have many authorized and trusted parties, has elements of immutability, and is fluid enough to allow for the nuance of business logic and human behavior, while also allowing for the verifiable truth of data. For example, let’s look at how Git handles changes to data:

Cryptographic authentication of history

The Git history is stored in such a way that the ID of a particular version (a commit in Git terms) depends upon the complete development history leading up to that commit. Once it is published, it is not possible to change the old versions without it being noticed. The structure is similar to a Merkle tree, but with added data at the nodes and leaves.

This history of changes and all of the related data and files can be distributed, so you have mirrored repositories of the same data. Every clone of this repository is a full back up of all the data, so if one server fails, you can access others, while using the mirrors to restore the failed copy.

When “the industry” (labels, publishers, artists, PROs, DSPs, etc.) ask for a global database, besides the practical issues of the identifiable metadata and who to pay, they don’t necessarily want a global database, and actually that’s okay. What’s not okay, as has been reported here (see Shiv Act) is trying to force a singular truth on a system and a planet that can’t have a singular truth. What “the industry” really wants and needs is potentially infinite different versions of the truth. This sounds counterintuitive to what everyone is screaming about these days, so let me explain.

There are basic core truths that should be consistent across the world, like what is this file and who is connected to it? Yet beyond that, whoever you are and wherever you are in “the industry”, what you really want is to have Deal A with one party and Deal B with another. Those two truths must be able to co-exist at the same time, and it would be helpful if they weren’t simply trapped in paper contracts. In a Git model this is possible, and therefore Deal A and Deal B can both be true, but would never meet anywhere else than in the view of the deal maker. This means the identification of the asset may remain a constant, but the details of ownership, regions, rates, etc. can always be fluid and changing, because that’s the world we live in. You don’t need a blockchain and smart contracts to express all of these truths. In fact, managing these truths with smart contracts would be a nightmare and could cause cascading failures in mission critical media systems. No matter what anyone is telling you about how we’ll just have “smart contracts” that know how to do all these things, that is a level of complexity I don’t think anyone has ever seen before and it will open up entirely new security risks. We’re already seeing exploits in smart contracts that have lost over a hundred million dollars.

All around the world, everyone, programmer or not, uses revision control every day. You, yes you reading this, you are already familiar with it. Every word processing document, spreadsheet, collaborative web document, blog, and even Wikipedia page history uses version control technology. It’s how we can collaborate and commit changes to documents locally and remotely, while also knowing the history of the who, how, where, and what.

You know who also uses revision control systems? Blockchain developers.

So do not release music…deploy it.

Scalability: Can you run a robust music industry on any of the current blockchain technologies? The answer is no. Don’t just take my word for it, let’s hear from John Palfreyman, Director – Blockchain – National Security CTO at IBM, in his May 2017 blog entry “Ten Things Blockchain is NOT”.

Blockchain is not (yet) mature:  Gartner stated in their 2016 report that blockchain is at the peak of inflated expectations on their hype cycle. They say it’s some 5 to 10 years from the plateau of productivity, which I regard as conservative for some use cases. Problem is, with all the hype, it’s easier to think blockchain for business is more mature than it is. A sense of reality must be maintained, especially when seeking out the use case for a blockchain first project.

Blockchain is not a distributed database replacement: blockchain complements distributed database technology, with appropriate information partitioning between the two.

Blockchain is not usually suited for high volume, low value transactions: as blockchain for business matures, fabric developers will turn to non-functional requirements including transaction throughput. In the near term, the technology remains better suited to low volume high value transactions

I could say more, but I think that encapsulates it well.

Now on to the new issues:

Legal: My company employs one of the best legal firms in the UK when it comes to media and technology, and the legal issues surrounding running a “normal” technology company dealing in media is incredibly complex. Now take that up a notch with decentralized or distributed companies that don’t care about regions or borders or rights. Frankly, I see a lot of these blockchain startups ignoring these facts (See Opus below). The current SEC ruling on Initial Coin Offerings (ICOs) is really a global red flag towards other regulatory shoes dropping. If the SEC and other government agencies around the globe can force compliance on ICOs, it is a short hop to privacy and data security issues. Regulation (like winter) is coming, and blockchain solutions will have to be compliant with these laws, and none are ready because they thought they could operate outside of it.

Disruption: Blockchain proponents seem to think they are the answer to giant corporate control of data and technology services, capable of disrupting the dominant players (Amazon, Airbnb, Uber, Google, Microsoft, Facebook, etc.), but the reality is that giant corporations aren’t always the first to jump into a marketplace until it is established. Sometimes they get caught up in the hype phase, jump the gun, and it goes sideways. What’s likely to happen is that blockchain companies will begin to offer services that have lower costs than giant centralized providers. However, corporations like Amazon (Amazon Web Services), are not likely to just let you take their business from them, so they’ll first begin by cutting prices to match blockchain startups, but providing a more mature service (maybe losing money to outpace competition) with more features (compete on value). Then, after these startups have established the blockchain marketplace, they’ll step right in and compete by offering more for less, or buying up these smaller companies one at a time. Meet the new boss…

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Blockchain data storage vs traditional. Pretty sure Amazon could shave off $.07 just to win

Remember, we thought the Internet was going to be the great equalizer. Maybe we should remember the past and learn from it if the belief is that blockchain will be the great equalizer, Part II.

So Where Are We Now, Anywhere, Nowhere?

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As I see it, if we look past the multi-million dollar losses from hacks and exploits (imagine they were your royalties), the infighting, the rip offs, and the ICO’s for dumb ideas at crazy valuations, I would say the scalability and legal aspects alone are likely going to be the anchor that weighs the whole thing down. From a cursory glance, if blockchain is the future for the music business, we are many many years from realizing this.

Capto_Capture 2017-08-08_03-30-11_PMHacks, ICO’s, Infighting, Exploits, Rip-Offs. I think we were better off two years ago with fantasy vs reality.


That means if you are planning to jump in head first now, you might want to rethink and check to see there’s water in the pool before you go all mission critical. Things are a bit of a shit show at the moment.

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One of the Ethereum blockchain projects lead developers

What I currently see is a lot of “Me Too” solutions. In fact, as of writing this, I count no fewer than 20 blockchain music data/streaming solutions all vying for their position as leader in a market no one is ready for and frankly, consumers (the ones who drive the market) don’t want it. It’s like being homeschooled and running for Class President. There’s a lot of pitching and giving talks at conferences with lots of promises, by many people who have limited understanding of technology, or more importantly, the history of it. Yet so far, there’s nothing of real value. Many of the “Me Too’s” are based on whitepapers with the promise of building a new music industry, seemingly with no idea that what they are building is sometimes immoral or at the very least definitely illegal. Some of them are jaw droppingly dumb.


Look, I don’t expect any of these blockchain issues to be worked out over night. In fact I’ve been saying that on panels and in articles and interviews for two years. Many of the people I highly respect who are working on these projects and pushing these ideas are 100% coming at this from the right place and for that reason I hope they succeed. The music industry is a enigma wrapped in another enigma wrapped inside a ball of rubber bands. This is going to take some time, so some slack needs to be given. But we are in a nascent stage where there are going to be a lot of ideas floated, and a lot of technology pitched, and frankly most of it will fail. Benji Rogers, founder of dotblockchain, and a huge proponent of blockchain technology, was recently quoted as saying:

“If you’re in the music industry and you’re not looking at how this is going to affect your business, you’re going to be in trouble. But we can’t rush this. It’s worth getting right rather than just blundering into it.

I could not agree more. You should be thinking about how it could affect your business, because it could in fact destroy the entire music business (my next article – piracy perfected). I also agree with the that last part, and it is why I’ve been pushing against this rapid jump to step onto a new world without any forethought or planning as to how we’ll adapt and survive there. You can’t just go to Mars without a supply of potatoes. We need to be asking much tougher questions, and frankly I’ve been very easy on these ideas without even touching on Authority and Privacy issues.

The questions we should all be asking ourselves when we’re being sold something so hard is, are there other possibilities we’re not exploring? Could we be approaching this incorrectly? Are there other options and ideas? If we aren’t asking those questions, then we’ll fail to transform the old creaky machine we have now, into the sleek machine we need for the future. We have little time to fix this, but that doesn’t mean we should fail to really think through where this may take us in 2-5-10 years. And on that note, I’ll see you in another two years.

Thoughts On The Open Music Initiative

The following is a guest post by Alan Graham of OCL.

There’s a classic scene in the book The Hitchhikers Guide to the Galaxy where a race of beings called the Magratheans create a super computer called Deep Thought to calculate the answer to the ultimate question of Life, The Universe, and Everything. After 7.5 million years of mulling it over, the answer, as it turns out is “42”.


As you can imagine, the Magratheans are not pleased.

To which Deep Thought responds:

“Only when you know the question will you know what the answer means”.

This is of course the state at which we find ourselves in the music industry. We all seem to know the answer is “DATA” but I’m not sure anyone yet understands what the question is.

My company recently became a founding member of the Open Music Initiative. An attempt at bringing academics, music industry members, and technology companies together to solve…well I’ll let them explain it:



I met with Panos Panay, one of the founders of the project, on several occasions and was encouraged and impressed by the broader tent that was being pitched, but I was sold on the idea of participating after learning Jonathan Taplin (a hero of mine) would be participating. That’s a pretty bold and brave move, and I’m hopeful this will therefore not be “business as usual”.

I’m interested in this project because my hope is we can actually progress some ideas into meaningful change. Now as with many efforts like this that I’ve seen over the years, I have some concerns and reservations, but hopeful we can address them and find a solution. While I don’t yet know the structure of our first meeting, I thought I’d share some ideas I would like to see us address in the coming months.

Now for many the belief is that simply solving an issue of data or creating a central and transparent repository of rights in the music industry will solve most of the issues when it comes to money and the speed at which it finds its way back to the creators.

But if the answer is “data”, what is the question?

Now I’m not here to talk about my own project, but I do want to take a moment to address my own search for this ultimate question. Three years ago I had a germ of an idea inspired by my co-founder, Rupert Hine. I had had some experience in the music industry from back when I did a project at Discovery Channel,  where I conceived of, designed, and launched a music site. After that experience (less creative work and more legal work), I vowed never to work with the music industry again, and yet here I was leaping even deeper into the abyss.

The abyss in this instance, however, wasn’t just about music, but more of an existential concern about us all. I had fundamental questions I had been thinking about for several years, of who we were as a society and ultimately caring about the quality of our culture.

So we took this idea around to countless meetings with creators and stakeholders of all kinds (music, images, text, video), and I spent a year just researching how we might reimagine an ecosystem that gave everyone (rights owners, developers, and citizens) what they wanted, knowing that each party might have to give a little, in which to get a lot. Every difficult question I was asked I needed to find an answer for. It was a year of deep thought, before I wrote a single line of code.

Our methodology was guided by some basic principles:

  • We have to respect all creators, that includes visual, sound, and word.
  • We need to find new markets and build new marketplaces beyond advertising.
  • End animosity between rights owners, developers, and citizens.
  • Show citizens through action the value of their own ideas.
  • Make copyright compatible, regardless of laws or borders or nations.
  • Change our culture by providing a better alternative.

The reason I tell you this story is because, like the Magratheans, I knew the answer (we all know the answer), but I needed a framework to help us discover the question.

Now many competing ideas have been proposed for solving the issues surrounding data, but simply using a word like “transparency” is not a solution. I know very well just how complex the music industry is (I’m neck deep in data, copyright, anti-competition laws, regional issues, rights complications) and a change isn’t as simple as proclaiming “blockchain is the answer,” because frankly, many of the problems are issues involving human nature and behavior, and technology won’t magically solve this.

But I do have some ideas on where we might start.

1. Godzilla vs King Kong. It is important to ensure this doesn’t simply become a battle of giants (music vs tech), who aren’t interested in listening or working on actual solutions with the smaller voices in the group. While I applaud many smaller participants are invited and the goal is to have diverse opinions, if ideas are put forth yet those in power decide to shut everything down they feel isn’t in their interest, we’ll fail rather rapidly. Frankly, if all the giants in the room had the answers, we wouldn’t be here to begin with. It can’t just be about what best serves any individual company, but ensuring the best ideas can rise to the top and then supporting those ideas. At the end of the day we’re trying to improve the lives of creators, and we can’t lose sight of that.

2. Methodology to Prevent Madness. Better data can improve efficiencies, but we need to address another elephant in the room, which is that “transparency” does not change the fact that culturally we’ve created a society that does not value paying for music or asking permissions. The average 18-34yr old will pay over $1k a year for specialty coffee, but feels somehow asking for $120 a year for all the music in the world is too much.

So we can increase efficiencies to squeeze a tiny bit of juice out of a $15B lemon, or we can also give some thought as to how that $15B lemon can become a pitcher of lemonade.  Data and transparency alone won’t solve this issue, it requires methodology as well.

3. Slow and Steady. We need to postpone the immediate urgency to create a central repository of rights, and especially the urge to move it to the blockchain (whichever blockchain). I know, I know, no one wants to hear this, especially if you are working on a blockchain solution. However, this constant talk about how blockchain solves all the data issues is nonsense. Blockchain as a database is still just a repository of data, no matter how fancy you make it. Bad data in is bad data out. Bad input processes lead to bad data. So you don’t start with the storage, you solve the processes first, data storage second. I’ve designed and repaired a lot of databases over the years and if you don’t have a solid process for how things go into it, you create problems that will be harder to fix later…especially if that database is immutable. We need to decide on “how” before we decide on “where”. The number one reason we have bad data is because we have bad processes in place and we should work to change/solve those first.


4. Getting to 42. I agree with Benji Rogers who has been banging the drum of the need for a minimal viable data set (MVD) to accompany a work and a recording. That said, a MVD is not a process, it is an outcome. You need to first decide how this happens. Therefore I suggest the following:
5. No Data/No Money. It isn’t simply that we have a fragmented music industry built on old tech, but we also have fundamental failures that occur because humans don’t do the work they are suppose to. I think we need to draw a line in the sand stating from THIS DAY FORWARD (TBD), no musical recording can be accepted into a system that will pay a royalty towards said recording unless it has a MVD. AND that data includes there is at least one corresponding publishing identifier linked to that recording. If DSPs and the companies that supplied them did this one simple task of refusing any recording that does not have this data associated with it, we could solve vast issues affecting problems with data and the speed of payments on the publishing side. I’m not talking about legacy, but a date in the near future where we “flip” this switch.


6. Blockchain. Quick, name one successful large scale blockchain company everyone is using today. Right. Saying a technology can do something, and then actually doing it are not the same thing. If we take some of the above steps first, and postpone the rush to create a central repository of data, we give ourselves room to see how that technology evolves (especially blockchain) over the coming year or two that it needs to mature. Even blockchain experts have said we’re looking at several years before this tech is fully ready. As Benji Rogers has mentioned before, there are perhaps 20 different competing companies “charging into this blockchain and music space”.

I would also remind you that financial companies (Fintech) are rapidly throwing money into blockchain development, and their ability to drive or steer said development vastly outweighs the power and influence of the music industry. We’re talking about organizations that control likely $100 Trillion in assets, and a total segment of investment that is reportedly in the tens of billions. The money they dump into this space may negatively effect what we’re trying to accomplish.

Being pragmatic with our approach allows us to take the process we create and test it first. Then we roll it out. Not rushing into a global decentralized database won’t kill the music industry, but fucking it up certainly will. If you don’t fix the above, the database you end up with is shit and we’ve made the problem worse.

This also means tabling the discussion of smart contracts and punting it down the road a bit. Again, I’ve been studying these issues and working with the data and on solutions for 3 years. The complexities involved in adding “rights expression” into metadata or a smart contract is immense and further complicates other types of licensing we need to get right across other systems. If even one aspect of this is incorrect it sets off a chain that breaks a lot of shit.

7. Short Term Goals Lead to Bigger Ideas. I’ve worked in technology for over 25 years, around 15 of which I wrote about technology for many leading tech publications. I’ve seen a lot of initiatives go absolutely nowhere, and I’ve seen them go nowhere fast the moment you start to discuss standards, codecs, file formats, etc. It took the W3C roughly 3 years to release the draft for HTML5, but another 3 years to release the final spec. Why? Well for one thing, like the music industry, it was pretty complex with lots of moving parts. Oh and politics certainly had something to do with it. One way to hopefully avoid industry politics is (to my point above) understanding the question to the answer. So let’s take some small but impactful first steps.

8. Build for Today, Plan for Tomorrow. Any and all first steps need to be compliant with today’s technology, not just looking towards tomorrow (because we don’t know what tomorrow looks like). What I mean by that is it is supremely difficult to get massive adoption of any new initiative and ensure it is unified and accepted. If any major player in any part of the space fails to implement this, the whole thing can fall apart. Not to mention, many of the parties that sign on to this project (or don’t), might have their own ideas on how to do things. As I often say, check the pool for water before diving in.

9. This Isn’t Just A Music Industry Problem. We are going to need massive buy in from a massive ecosystem. This is going to be tough. We’re not just talking labels, artists, songwriters, publishers, DSPs and so forth. We’re talking about many other ancillary industries that interact with the music industry. That means we cannot act as if we are an island, since other industries are reliant on music. We should be inviting others outside of music to the table. That means photographers, videographers, authors, publishers (not music), and so on.

10. The Music Industry Isn’t Broken

The Music Industry Isn’t Broken

-With Love,

Your Fans

At the end of the day, your amazing technology is not what drives adoption, it is the punter, the fan, the listener. The biggest mistake I see again and again from just about everyone trying to solve these issues is forgetting that without them, there is no point in making a better system for yourself. They put the money into the system you are trying to make more efficient. So in order for any of this to work, it can’t affect the customer in any negative manner that pushes them away.

Consider the experience of today’s music lover. Walking down the street, when they push play, the music plays. For a fan, they live in a near-utopian world where almost anything is available within seconds. Within a year or two this will be the expectation of almost everyone, including us old farts. Add to that, incremental improvements in experience from DSPs over the next year or two, means that whatever you want to accomplish to make a better experience for the rights owner, better not fuck with that user experience one bit. It better work on day one exactly as it does today…I push play…it plays. In fact I suggest you better make it amazing, or you are going to have a tough time getting tech to adopt it.

Remember, when you only view this from the rights owner perspective, you fail to see that the fan doesn’t think the music industry is broken. All they hear is a bunch of whiney artists complaining they aren’t making any money (just read any comments on any social media story about music). They don’t care about transparency, data, reporting, or speed of payments. They don’t even really care about giving you money directly and likely won’t care about fair trade, except as a passing idea. They want what they want the instant they want it. So remember the wisest words any sage has ever spoken:


“Don’t fuck it up.”

-Ru Paul


Again, I think it is a positive sign having all of these parties in a room together to address these issues, and I applaud even attempting this at all. I know it took Panay and the OMI group a lot of work to get this far. But it would be a damn shame if one year from now, we’ve got nothing to show but an even more fragmented industry and find ourselves back at “42”. None of us want that, but it is up to us all to make that a reality.

Blockchain: Panacea or Pandemic?

Right now there is no greater dichotomy regarding the future of information technology than with that of the blockchain. Liberating yet infuriating. Beautiful yet ugly. Established yet unproven. Immensely complex yet elegantly simple. In short, blockchain is one of the more fascinatingly profound ideas I’ve seen in 15 or so years. At OCL we began working on solutions that lent themselves well to the blockchain over 2 years ago, and last year when we started combining some of our technologies with blockchain, I was quite excited at what we were able to come up with.

But I’ve been down this road before. I’ve seen more than one professed technology of the future not realize its promised potential. Hell, I’ve worked with many of those companies. And while I’m quickly getting (or hoping to get) a reputation as someone trying to temper the exuberant expectations over blockchain technology, I am very intrigued by where all of this might be headed. And terrified.

Thoroughly and completely terrified. Not terrified with the technology itself or what is possible, but our natural tendency to leap first, look second.

In this piece I’m going to begin to tackle just two ideas surrounding the technology behind solutions people are looking towards blockchain as a panacea for the music industry.

I’m not writing these pieces to take apart the idea of using the blockchain with music, but just lend a critical voice that we need to start thinking through the process before we go headfirst into it. It is, after all, important to verify there is water in the pool before diving into it.

Terms and Rates and Smart Contracts – Oh My
One of the most touted aspects of using blockchain technology is the idea of combining it with something called a smart contract. Essentially this is a bit of executable code, a program or software robot, if you will, that resides in or can communicate with a/the blockchain. The idea is that an artist will simply write into the blockchain their ownership information, plus terms and rates so that every other system on the planet will be able to read those terms and rates and execute the artist’s wishes. Somehow, this smart contract will be capable of interpreting everything that needs to happen and performing that task. The idea is that if we had something like this, we could just eliminate the need for PROs and labels and whatnot, because we have a super-efficient and direct connection between rights owner and rights user. This puts the artist in complete control of their destiny and helps to solve many of the issues surrounding rights and data.

Or does it?

It sounds like a brilliant idea. Fewer middlemen and a more direct relationship with their works and fans. Except there’s a few problems that perhaps make it even worse. If you’ve ever actually dealt with the music industry you know that the business of art is just as subjective as the art itself and often you don’t know how to deal with a “thing” until the “thing” arises. The complexities of these situations cannot be fully captured by an actual contract, much less a virtual one. Plus, software robots and Artificial Intelligence don’t work well with the subjective nature of humans. They don’t understand intent.

Let’s say you have the terms of use for a song written into the blockchain that spell out how you can or cannot use a musical track (and keep in mind there is no such thing as simplified rights in an age where billions of people are creating trillions of uses). For example, an artist determines that in their terms you can create user-generated content, but not on services in certain countries that have a poor record of human rights, nor can it be used to promote certain products, nor can it be used on any offensive or exploitative platform, nor can it be used for certain political reasons or parties. Also since the artist is a staunch vegetarian and animal rights supporter, the music cannot be used with any media that contains cruelty or abuse, nor appear with visuals of any meat products. You can use the music for charitable organizations, but only certain types of charities, and not to raise money, just awareness. There is no commercial use allowed, but ad-revenue sharing might be allowed, but only if your audience scope is smaller than “X” and the views are kept below “X”. You may download the music for personal listening if you pay “X,” and streaming will cost “X” for these tracks and “X” for these others. Also, those rates are different depending on the region the listener is from and how many devices they are using. You can also stream the music for “X” amount in your place of business, but these rates are different depending on the size of your business and how many locations you have. Oh, and if you serve meat, you can’t play the music.

So the KKK charitable BBQ Pork event at the Whites-Only restaurant is certainly not going to be allowed to use this music, but how will a smart contract and a system devised to interpret all of this actually work? An artist can’t possibly be expected to keep on top of this. What about use in social or encrypted networks or apps where you can’t see what’s being created or how it is being used? And all of this has to happen in real-time and be automated. The complexities of writing such a smart contract and then it interpreting use or intent in a way that grants it in milliseconds is vast, if not practically impossible. And let’s not forget, the above scenario is based on the simplified assumption that there is only one owner (performance/publisher) of the work(s) in question. Now add three more owners, each with their own terms.

Granting an artist or songwriter more minute control over their work might seem like a fucking awesome idea, but the execution of all these details could actually add vast problems that bring the whole system to a screeching halt. If you think that greater control over works will bring greater simplicity, you are kidding yourselves.

To make any of the above workable, a set standard of terms or uses would need to be devised in which to ensure all systems can communicate and understand those uses and each use is applicable under the laws of those regions, and all systems of use must also be able to interact and interpret all of this and perform it flawlessly and within milliseconds, much like how DNS ensures that when you click on a link, you get back what you are looking for. That’s a tremendous amount of complexity that must be disguised in a very simple executable form. I’ve seen no one propose nor describe how such a system would work for music on the blockchain and how you might simplify the process. Will there be a standardized smart contract for music rights? Who will define those standards? Who will govern that process? Will there be a set rate for the use of music? Who will devise how third party apps and platforms interact with these smart contracts and how do you control which platforms can and cannot have access? How will we structure the data and what’s the proposed requirements for identifying a work properly? Who is the authority that will back the validity of this data? We can’t generally get artists to sit down and fill out basic paperwork, so whose going to make sure this is done and done correctly? Which body will police it?

What happens if a system can’t properly decipher a smart contract? Do we essentially designate a new type of 404 error? How and who resolves that issue? What will that experience be like for the listener and are we asking an awful lot from them to join this bold experiment, when for them the current model is working well? Today I pay a streaming service and I click on a song and it plays. What truly incentivizes anyone to want to switch over to this model? How do you incentivize music platforms who are locked into current streaming contracts to switch over?

And now let me expand the complexity by a massive factor. How do you perform an automated UGC sync? Across disparate assets? Multiple owners and industries? Automatically? It took me three years to solve that problem, and I can’t find anyone who is talking about how to solve that.

Seriously people…think about this stuff. I’m seeing article after article that talks about the simplification of music by just using the blockchain with wild promises that have no possibility of being solved anytime soon…if ever, and I don’t think we have the luxury of playing around with this while Rome burns.

Transparency is Clearly the Answer
If there’s a “Word of the Year” for the music industry, it certainly has to be the word “transparency”. There is an awful lot of talk about transparency that revolves around the idea that there are all these black box deals over rates and use that also involve advances paid by tech companies to rights owners with no understanding of where that money goes or if artists and songwriters actually see any of it. The other pressing aspect has to do with the accuracy of streaming plays and pay. Both are issues that need to urgently be addressed.

The idea put forward in partially solving this with blockchain is to create a universal rights database by transferring all the details of what the work is, plus use and rates over to a transparent system that not only covers the what/how/when/cost of something, but also to create a transparent transactional record of each use that can be audited by anyone. Expanding on this has also been the idea that you could also use the same type of system to create transparency as to who may have worked on a project, how much they “own”, what they get paid as a percentage, even automating that payment process, etc. Buy a song and everyone who should be paid is instantly paid.

That’s not necessarily a bad idea, in fact many aspects of this are brilliant. But when it comes to execution, yet again, there are a lot of questions I’ve yet to hear answered, and some rabbit holes I’m not sure we’re prepared to go down.

So let’s ask some questions, starting with how much transparency is too much transparency? I’ve seen it proposed that we should just open everything up and have a completely transparent music industry.

Imagine you went into Starbucks one day and on the menu board was a breakdown of the costs and sources of everything that went into your $4 latte, and you knew exactly what the margin was on any given item in the store? Would you still be inclined to pay $4?

Should we be breaking down and removing all obfuscation of the costs associated with making music? Should someone know who you paid, how much, your studio time, etc? Hell, should artists know what each other are being paid? What then would be the point of negotiations? How would you get the best sync or sponsorship deal? Does a session musician want the money he was paid on one gig transparent to other session musicians on that gig or other gigs?

Let’s suppose we find ourselves in a blockchain future where by using the blockchain and cryptocurrency, instead of the music platform (Spotify/Apple/Deezer/YouTube) paying the rights owner, the listener pays the artist direct through a micropayment system each time a song is played.

Who sets the rates? If the rates fluctuate, how do you inform or ensure that the listener is willing to pay a fluctuating rate? How do you get them to agree to terms for each artist across the blockchain? Assuming this is an automated process, what mechanism on the listener side ensures this is agreed upon? What about ensuring you are compliant with the consumer protections in each region? What about age validation or explicit material?

If you were to charge the listener on a direct micropayment system, how do you calculate that? Based on length of time? What if they don’t complete the track? What if by accident they forget to turn off their player? What if there is a network interruption? Will you pro-rate? Will you refund their money automatically? What if they accidentally play the wrong song or fast forward/rewind? Do you charge them for the first 20 seconds? What if it is the recommendation of a friend through a shared link? Who pays for that? Say they buy a track and realize they made an incorrect purchase? Can they get a refund? If your system of payments is automated and the money already has been distributed to those who contributed on your track (musicians, producers, songwriters, etc.), will you pull money automatically from them if you have a refund? What if you have a band and there are 5 members and 3 of them already spent their money? Who performs the refund? What if the payment system is compromised or the individual with the charges didn’t authorize that use? Who eats those charges?

How will the artist or their smart contract handle CRM? I mean once you are in direct 100% control of your data, assets, and business and no longer have the services of a PRO or label, you are now also in charge of the entire workload including customer service, so that tech is going to need CRM tools. How will you issue promotional tracks that are free to some but paid to others? How will you handle that some systems have free models and others have paid models?

You are going to say, but Alan, what about the fact that with such a system, we can deal with a bit of hassle because as artists, we now make more for each sale or stream? With the reduced overhead of all these middlemen, we can cover these things.

Okay true, the costs for the artist to transact have dropped, and they now make a higher percentage of income “per stream” because it is a direct connection to the fan who pays, but now you aren’t working as a collective body so you may have also driven the “transactional royalty rates” lower as the market is now even more highly saturated and competitive, plus there is no set rate for music since each artist wanted to be independent and set their own pricing via blockchain/cryptocurrency.

So now in the future, instead of the “music industry” as a collective having the leverage to negotiate/justify the costs/price of something, it will now be the individual artist in the position of justifying what their work is worth to people who have no understanding at all of the value.

Welcome to the completely transparent music industry. This. Will. Be. Brutal.

Closing Thoughts
I’ve said before, we need a better methodology for how we manage data, and clearly there are efficiencies and obvious improvements in transparency we could do in the near term. However, depending on how we execute these solutions we could in fact make the problems worse and all the money saved will simply be spent in other areas, thus wiping out any benefits. Add to that in order to answer many of the questions above, we need new technologies, standards, organizations, and companies to exist (that currently do not) before any of this will work. That won’t happen overnight, and it makes me wonder if there isn’t a better manner of going about solving these issues that still includes the blockchain, but doesn’t waste time reinventing the wheel.

More to come…

Beyond the Blockchain: It’s All About The Beans

Guest Post By Alan Graham

Since I wrote my last piece on deciphering the importance of blockchain without the hype, the hype machine has actually kicked it up several notches. I feel it has gotten so ridiculously far out of hand it is time to bring some additional context to the discussion and take it down a peg, because the overabundance of passion is lacking a fair amount of context. And I’m saying this as someone who uses the blockchain daily.

We need to temper our approach to blockchain because frankly, I’ve seen many pie in the sky ideas run up this flagpole lately with the flag being that of Fair Trade Music (this will solve everything!), but not a lot of discussion of what it actually means, how it will function, how to get buy in from every major/minor player and artist and songwriter etc. in the music industry, and then the most important factor of all, convince listeners. We all see the iceberg, and there is still time to turn the ship before it hits, yet I keep seeing people ready to jump in rowboats and proclaim, “we did all we can”.

Blockchain, for all of what it could do, will not solve the underlying issue that all kinds of creators are facing. That issue is societal. It is at the very heart of everything, and no amount of talk about blockchain, improved transparency, or fair trade is going to change what is ultimately broken.

It’s us…we’re broken.

Globally, citizens have decided that the value to access virtually all the music in the world, is worth less than two cups of coffee. 

The average price of a Starbucks latte in New York City is about $4. The cup, lid, water, milk, and beans are negligible in comparison to the actual labor itself. We all know we pay a remarkable markup on that cup of coffee, yet we have no qualms about it. In fact, a study in 2012 showed the average American worker (18-34) paid over $1,100 a year on coffee.

Now, you can purchase an album for around 2-3 cups of coffee. For the price of 1-2 cups of coffee, you can pay a monthly subscription fee for music which gives you nearly all the music you could ever want to listen to, instantly at your fingertips.

Unlike coffee, music has incredible lasting value yet something really weird is happening. Even though it is easier and cheaper to buy music than coffee, people are not only buying less music, they believe that the music they are purchasing, or even the streaming subscriptions they are paying for, are still too much money:

According to the study, the top…reasons that consumers gave for not subscribing was that services are too expensive (46%), they can stream music for free elsewhere (42%)…

What. The. Fuck.

In fact, Starbucks global revenue for 2014 outpaced the entire music industries sales by over $1B. Just think about this a second and what it says about our cultural values. If people are willing to spend $1,100 a year on coffee and Starbucks actually generates more revenue than global music sales and subscriptions, how will more transparency, fair trading, and blockchain technologies help artists? Is it the lack of transparency or is it the fact that the money just isn’t there? And it isn’t.

Blockchain solves none of this.

Is Fair Trade Music & Blockchain the Answer?

Who doesn’t like the idea of Fair Trade? Sounds great, but the first thing we need to define is what Fair Trade Music actually means. I’ve seen the term used quite a bit and found numerous definitions as to what it means. The only thing I am 100% sure of is that it means different things depending on who you ask. For some it seems to mean having more control and transparency over the supply chain (à la blockchain). For others it is about educating consumers on where and how to source their music that best remunerates artists. For some it is both. If you go to the website Fair Trade Music.info you’ll find the following:

“Fair Trade Music” is an initiative designed to transform music in much the same way “fair trade” has transformed the value chain for agricultural products such as coffee.

As with coffee, “Fair Trade Music” will provide consumers with the information they need to make “fair” choices in deciding which music providers and services to use in order to access and enjoy music.

Music providers and services that abide by certain criteria, such as fair compensation for music creators and transparency will be certified by an independent fair trade music certification body. They will then be authorized to display a Fair Trade Music certification “seal of approval” on their website, apps, promotional materials, etc..

First of all, citizens don’t want choices. They want convenience.  This is the lesson we’ve learned from the age we now live in. We have an overabundance of everything and we are absolutely drowning in choices. Citizens certainly know that buying a song is more financially beneficial to an artist than streaming a song, yet the growth is in subscriptions, not sales, and unfortunately most of those subscriptions are freemium. That is a choice that citizens already made. As it is with rivers and lightning, people will always choose the path of least resistance. Hello YouTube.

Secondly, if you are using coffee as a parallel to the type of movement you want in music, and as someone who had a coffee company and studied the sourcing of fair trade coffee, you need to more carefully examine that comparison. From the fair trade coffee site:

The coffee supply chain is complex as beans pass hands through growers, traders, processors, exporters, roaster, retailers and finally the consumer. Most farmers have little idea of where their coffee goes or what price it ends up selling for. The more lucrative export of green coffee is only an option for farmers if they can form co-operatives, purchase processing equipment and organise export or hire a contractor to carry out these services. 

Lack of supply chain transparency. Sounds familiar to the music industry, right? However, the Fair Trade music movement needs to recognize and push the most powerful aspect of what fair trade coffee set out to do. It wasn’t about transparency, feel good labels, or choice. It wasn’t even having complete control (farmers give up a lot control to be fair trade certified). Fair Trade works as a collective (50% of it is owned by the members) to guarantee a minimum price for coffee beans. Working as a collective it gives them that negotiating power.

In a volatile marketplace, without the power to exact that influence, all the feel good badges in the world mean nothing.

In addition to that, part of the money collected by Fair Trade (premium) funds programs for economic, social, and environmental issues.

Through their producer organisations, farmers also receive the additional Fairtrade Premium to invest in business or community improvements and must use at least 25 per cent of it to enhance productivity and quality

Fair Trade is not a bunch of farmers working independently so they have complete control of their farming process, beans, and supply chain. It is a collaborative endeavor for change and stability that works to protect members, but each of them has to give something up. They all have to make sacrifices for the greater good. What I hear from many artists these days is quite the opposite.

In the music industry, traditionally artists are terrible at organizing and working collectively, but excellent when it comes to voicing an opinion about things, the one thing there is no shortage of (admit it, you know it’s true). Many artists in the music business can’t really even be bothered with the “business” part. I get that, it isn’t any fun. This is why there are PROs and other organizations that essentially do the exact same work as Fair Trade coffee on the behalf of artists to help set standards, pricing, collect money, negotiate, and social programs. For example, PRS for Music:

We are a society of songwriters, composers and music publishers. We license organisations to play, perform or make available copyright music on behalf of our members and overseas societies, and distribute the resulting royalties to them fairly and efficiently. We promote and protect the value of copyright. Achieving fair value for copyright music in the face of changing technology and legislation. Forging international alliances to enable cost-effective and transparent copyright administration around the world. Striving to increase distributions to members and improve the service we offer.

We are owned by and accountable to our members. After deducting the costs of running our organisation, all the income we receive from licence fees is distributed back to our members


The PRS for Music Members Benevolent Fund offers assistance to songwriters, composers and their dependants, who are suffering financial hardship due to illness, accident or problems associated with old age.


Since 2000 PRS for Music Foundation has given more than £14 million to over 4,000 new music initiatives by awarding grants and leading partnership programmes that support music sector development.

  • Collaborative Organization? Check
  • Working on behalf of member owners? Check
  • Working to establish fair value? Check
  • Collectively negotiate on behalf of members? Check
  • Fund charitable/community projects? Check
  • Give a sticker/badge to denote proper use? Check

The language and functions of PRS are actually very much aligned with those of Fair Trade coffee. So, perhaps instead of starting another movement and maligning these types of organizations we should be working to help make them stronger and more efficient. Instead of burning it down, we build it up.

Fair Trade is pointless and powerless if it is just a collection of smart contracts on a blockchain without any muscle. And unless you can get every artist to coordinate, set a guaranteed value for work, and be able to get consumers to pay it, what’s the point?

So let’s break down the argument I’ve made so far. 

  • Society no longer values paying for music and has instead transferred this value to other areas in their lives.
  • Artists today actually have more control, independence, and insight into their industry than ever before, yet are still struggling to make ends meet.
  • While costs to create, distribute, acquire music have all dropped, and access to purchasing music is easier than at any point in history, sales continue to drop.
  • While streaming as a technology continues to grow in popularity, subscriptions (payment) have lagged behind, with many consumers saying the cost is still too high.
  • The average American spends 89% more on coffee each year than music.
  • Adjusting for inflation, there is roughly a $35B hole of lost revenue still missing from the peak of the music industry in 1999. We have a long path ahead of us.
  • While more transparency and efficiency will help reduce waste within the music industry, that money will likely not reverse the fortunes of the music industry (see coffee supply chain).
  • Reducing the obfuscation of the music industry (contracts, deals, negotiations) may reveal additional revenue that should go towards artists, however it means very little if consumer spending continues to drop. 100% more of zero is still zero.
  • There is no clear definition of what fair trade for music actually is, how it will organize, collectively bargain, strengthen the global music industry. Negotiating only works if you have the muscle to back it.
  • How exactly will Fair Trade Music negotiate and enforce on behalf of rights owners and how will it sustain itself financially?
  • There is no evidence to support simply having a fair trade designation will suddenly change public opinion on paying for music, simply because it makes them feel good about their choices. Survey any group of people and they will tell you artists should be paid, but the evidence is contrary.
  • Blockchain solves none of this.

There are many solutions for increasing the efficiencies of the music industry, including blockchain. But there is only one solution for changing the fortunes of the music industry. That is getting people to once again value music enough to pay for it. How to do that is a discussion for another time. But I do believe it can be done.

Incorrect Assumptions Lead To Incorrect Solutions

In the 90’s, I was VP of two very early e-commerce companies. We did something unique in that we were two of the very first technology solutions that allowed ordinary people to sell things on the Internet. Yes, there was a time when, unless you were a multi-million dollar company, it was nearly impossible to sell a product online.

We helped change that. However, what we later discovered was a bigger issue so obvious, we had completely missed it. E-commerce was so new (just like blockchain) we were working off of incorrect assumptions, which is the worst way to approach solving any problem with technology.

You see it turned out that having an online store and processing a transaction was the easy part.

Getting people to discover you and convincing them to spend their money was the hard part.

What we hadn’t realized at the time (but soon became apparent), was that it wasn’t enough to solve the problem of transacting, the true challenge, it turned out, was the exact same problem we have with music.

Getting discovered>Getting Paid

You have to get people into your store, and convince them what you have is valuable and have them part with their money. This truth cannot be ignored, as the entire world has struggled with it for thousands of years.

Blockchain doesn’t solve this.

After all is said and done, at the end of the day, the mechanisms of public relations, communications, marketing, promotion, management (essentially running your business), will always be the most important and the most costly components of getting music heard or purchased. If not always in financial costs, in time costs. And what’s your time worth if you’re spending it not creating music or performing it? Simply solving an issue of transparency, while important, means very little if you are simply illuminating there is no money.

In those early days of e-commerce we learned the hard way that being 100% in control of your destiny was only as good as your ability to get customers to hand over their cash, and if we don’t fundamentally solve this issue for the music industry, what good is a fair and open system that no one wants to pay for?

I absolutely agree that having a fair system with great efficiency is paramount, and that it is important to continue to bring these issues to light and to push forward ideas that speak to the value of art and the need to pay for it. But unless we solve that last part…pay for it…we’re only wasting both time and money on what boils down to rhetoric.


In my next piece I’ll break down the technical challenges facing blockchain and the music industry.

Alan Graham is the Co-Founder of OCL

Understanding Music And Blockchain Without The Hype

Well the bitcoin fervor seems to have already peaked and we’ve moved on to the blockchain (the underpinning tech that makes bitcoin work) as the new investor de rigueur. It’s like that moment when your favorite unknown band goes from obscurity to superstardom and suddenly everyone is telling you how much they’ve always loved them. Everyone loves the blockchain. In fact when it comes to solving the many issues facing the music industry, there is a massive rush of interest in using blockchain technology to solve them all, citing the ridiculously bandied about word of the moment, “transparency”.

What currently concerns me with the goldrush to fund or participate in blockchain projects is of course the fact that when investors jump into nascent tech, it often gets convoluted from its original intent to something often unrecognizable. What made bitcoin and blockchain so attractive to many developers and users was that it wasn’t part of “the system”, nor built around the idea of being part of the establishment. And yet, that is exactly what is happening.

As someone who actually has a technology platform that works with blockchain, let’s look at it with some critical objectivity.

What is the blockchain?
Without providing a deep and detailed explanation of how “ blocks” become the “blockchain,” or talking about miners mining bitcoin, and other concepts that will cause your eyes to roll into the back of your head, just think of the blockchain as an immutable decentralized (no one owns it) public ledger or record of transactional data. That data is distributed around the world to multiple servers that allow this transactional data to be written into a permanent record. Each copy of this data is designed to contain the same data as the others. Essentially, you can trust that if you write a transaction into the blockchain, they all have the exact same transactional information. To boil it down to a very basic level, if you put something in it, it is there permanently, impossible to tamper or change.

Right now there are newly funded companies trying to use the blockchain to validate/record stock trades, artwork, music, copyright, diamonds, and other tangible/intangible assets. Even banks and governments are looking into how they might utilize the blockchain for documentation of important information. Many within the music industry feel that by writing practically everything into a blockchain they will solve all the issues and we’ll suddenly be returned to a time of unicorns and rainbows, with more money than ever before falling from the sky. And maybe it can.

It is in fact quite a brilliant bit of kit and as of late, other people have started to see that having such a mechanism could be very valuable for other types of transactions. And so we’ve got other companies and organizations creating not only their own cryptocurrencies, but their own versions of blockchain technology. In fact, what could be the version of the blockchain that is recognized as “official,” is currently in the process of experiencing a fork in the road. Sparing you the politics behind what’s going on, there are certain limitations inherent on the blockchain that a group of developers want to re-engineer to solve, and so they are in the process of what is called “forking” or splitting off the blockchain to run a new version of it.

Confused yet? Welcome to my world, and I’m using it every day.

The blockchain, in theory, shows some promise as an immutable public ledger that provides some needed transparency when it comes to important transactions, whether they be purely financial or a public statement of fact. However, if it is going to get past the point where it is being funded for the sake of finding the next big thing (beyond bitcoin), to actually being the next big thing, it has to solve five main issues, Authority, Immutability, Scalability, Legacy, and Privacy.


“Def: the confidence resulting from personal expertise: he hit the ball with authority.• a person with extensive or specialized knowledge about a subject; an expert: she was an authority on the stock market.• a book or other source able to supply reliable information or evidence, typically to settle a dispute: the court cited a series of authorities supporting their decision.”

Humans tend to trust people and institutions because they place within them authority. If one institution fails us, we often have recourse to go to another to find satisfaction. We hire experts in certain fields or use certain organizations to perform certain tasks, because of the authority invested in them. Authority doesn’t inherently exist, but is something that has to be recognized and accepted by humans, because data (good or bad) is just data. Regardless of how many times technologists want to convince us that AI and technology can do certain things better than humans, almost every person prefers to have a direct connection to another person when resolving issues.

The blockchain does not possess cognitive empathy and does not understand nuance, therefore sometimes the only way to solve a problem is with a person to person dialogue. Blockchain is not an authority unless given that state by humans. It has to be recognized as such. However, blockchain also belongs to no one, and it in fact is simply a public ledger or record of information pertaining to a transaction or asset, and it can in fact be polluted by humans (garbage in/garbage out). It cannot be accountable because it has no one to be accountable to, and no one is truly responsible for it. Since it is designed to exist in a decentralized format, (meaning it lives out in the ether of the Internet and has no owner), the perceived value is that anyone can write to a blockchain and by making it public, almost anyone can use it to validate a transaction.


It hasn’t been tested in a court of law. While I like the idea behind decentralized transaction ledgers, I see some serious issues specifically surrounding authority. There is no centralized authority responsible for blockchain, and therefore you can’t really hold anyone accountable for the data. Certainly for many, this means there are pluses and minuses, yet while a record may be a record, generally in court you have an authority which can validate the authenticity of that record going in and coming out.
If you have a land dispute, for example, you may have to call in not just surveyors, but also government officials who have the original land deeds or registered documents on file to testify to the validity of said data. They always possessed the data and it was recorded at that location, so they can testify to its validity. When it comes to copyright, in order to sue for a valid copyright infringement case, you have to have (in the US) registered your work with the Library of Congress, not simply throw something into the blockchain. There has to be someone accountable.

You also have to in fact be able to 100% trust who is entering that transactional data, and they have to be accountable. If that trust is being put into the hands of a private technology company, and you are relying on that data and that company, you have to understand there are risks. That company could in fact be acquired or go out of business. While some of your data might safely tucked into the blockchain, that doesn’t mean you are 100% protected and free of risk.

While we may or may not like it, having authorities (institutions/people of repute) that we generally trust, has always been critical to society, and it is not just information that backs that up, but people. I know some will say that blockchain is impossible to “hack” or game, but I’ve yet to see any technology that hasn’t been exploitable on some level, so who will people turn to when they have disagreements or feel they have been taken advantage of? Sometimes data also doesn’t tell the whole story, which is why we don’t call computers to testify, we call humans.

Since anyone can essentially write anything into the blockchain, this is why having trusted institutions involved is so important, but to date, all the language I hear from blockchain disruptors is that they want to burn down the old legacies, yet they don’t yet have a trusted replacement for them yet.

I think my biggest issue to date with those rushing to work with blockchain is the idea that you can and therefore should write any and all data into the blockchain. For example, several companies I’ve talked to (and some I’ve met) have thoughts of writing business logic into the blockchain, which could include metadata, ownership information, spits, rates, terms, and so on. The thought being that if everything is out there, it is easy to parse out, interpret (via people or machines), and deliver that always elusive “transparency.”

Besides the technical limitations on this, even if possible, it is a remarkably stupid idea.

Business logic is not always immutable. In fact, it isn’t even always that logical. All creative industries are in a constant state of flux. Rates, terms, use, and even ownership can change at any given moment. There are not simply market forces at play, but there are emotional forces at play. It is one of those ideas that on the surface sounds brilliant, but without any real thought as to what comes afterwards as far as resolution conflict and other complications that are products of people. The music industry is replete with battles and disagreements and misunderstandings. It also doesn’t take into consideration  the power of “oops.” Mistakes will inevitably be made.

Certainly, some data can and should be written into the blockchain, but the idea that there will be a magical wonderland of machine logic that will always know how to handle every given situation is laughable. Machines do not understand intent, and they do not understand abstractions like fair use, parody, or pastiche. Humans barely understand these ideas. On the scale that things like user-generated content are created, the idea that this can all be handled in this manner is illogical.

There is a better way to handle business logic, and that is using a method I call “immutable fluidity.” It is in creating a hybridization of static and motion. That’s another article.

Scalability – Size
Here’s some of the reason we’re seeing a fork of the current blockchain. When it comes to scalability of size (and speed), there are two camps on this. One is saying blockchain scalability is not an issue, and the other says that it is a major issue. Which is it? I think I can make an argument for why it may not be scalable. With the rush to build/fork blockchain into the “blockchain for x” and the “blockchain for y” are we not exacerbating the issues of scalability? We certainly are making it very difficult to pick a platform to back.

Let’s look out a bit into the near future and take into consideration all the possible uses for blockchain. We’re talking trillions of transactions/records every day. Massive amounts of data that, while not blob data (large files like video/music), is still data.

If we take the bitcoin wiki scalability targets they use by comparing bitcoin/blockchain to the Visa platform, then according to the wiki, Visa has a peak capacity of around 50k transactions per second. I know that’s “peak” (not average) but if we are looking at displacing other payment systems as well as other data recorded in blockchain, you have to build for the world you may have, which can include a future of trillions of micro transactions as well. From just a financial transactional aspect, you are talking roughly 4.5B transactions per day or 1.6T transactions a year. Now add to that the traffic and data requirements for blockchains that cover all sorts of transactions that may not have any financial aspect or may in fact have both financial and other data requirements that need to be recorded. Judging by some rough numbers, we could be looking at many terabytes a day and a few petabytes a year in data, likely more. All of this data has to move and be stored somewhere, and there is cost to that in financial and time factors as well.

Now I understand that not all nodes need to store the entire blockchain, but for many of the transactions people are talking about, they have to exist forever and there must always be a record of it somewhere. We know that systemically it is possible for things to fail and decentralizing data can help prevent from some critical aspects of this from occurring, but it is possible that at some point this data becomes untenable. Yes, I know that storage and bandwidth become cheaper all the time, but we’re talking about still needing to handle the traffic/storage of photos and video and music and whatnot (that we already do online), on top of blockchain data.

Scalability – Time
Over the past 2 years, the average round trip time for confirmation on a blockchain transaction has hovered in the 6-10 minute range, typically around 8 minutes. Two years, and transaction times have not decreased, but also not increased with the popularity of bitcoin. This isn’t necessarily a good or bad thing. However, many mission critical uses of blockchain will in fact require transaction times measured and confirmed in milliseconds.

Recently there’s been a lot of press written up around an announcement about how a music intelligence company is partnering up with blockchain/cryptocurrency company. From what I gather, they are taking a stab at creating yet another rights database, on top of the dozens of other attempts to do this around the world at the moment. In fact, another blockchain rights database project is also being developed on the competing blockchain platform. How many projects like this can we really have? At some point some serious decisions are going to have to be made.

Many of the people I’ve met who are working to introduce blockchain solutions operate with the general idea that the old systems are broken and we need to simply burn it all down and start over. Hard to argue with that, considering it isn’t as if things are running like clockwork and there is a tremendous amount of wasted revenue that is eaten up by overhead and broken methodology. But whenever I hear anyone use the word “music industry” as a way to demonize a system that clearly has both positives and negatives, it harkens back to another time I heard those same words…

Sure, I’m a technologist, but I’m also a writer. I was told 15 years ago by the tech industry that this was our coming golden age. The walls are coming down and you’ll be able to self publish your work and make more money than ever before. In those intervening years I’ve seen peers go from making $1 a word to around $.01 a word, and as far as all the of walls coming down…the last time I checked with this great disruption and golden age, Amazon was on top controlling the methods of sales, distribution, and with devices…consumption. Not content with that, Amazon now is funding books, movies, tv shows, etc…not far from being the only game in town.

Great job technocrats!

Here’s my fear. First of all, with all of the differing approaches and variations of blockchain technology, combined with the undermining attitude of burn it all down, what that in fact might do is create the worst of all partnerships…big media and big tech united against a common enemy.
You see a lot of investors and money are in Spotify, Apple Music, Deezer, Rhapsody, Google Music, YouTube, Amazon, etc. A lot of rights owners of all kinds (majors and indies) have committed to moving past music sales and on to supporting streaming. And while they both desperately need each other to make this work, they are also not friends. There is an inherent distrust of tech from creative industries and vice versa. Right now this is actually a good thing as it keeps everyone on their toes and it is these issues that drives the discussions of making better solutions. But if you “disrupt” or threaten to “disrupt” these “legacy” platforms, you may just unite them against a common cause, positive progress. That battle will put big media and big tech together with big government and we’re talking about trillions of dollars and the ability to legislate you into oblivion. That means once again failed attempts of planning and strategy will have the opposite effect of your desired revolution.

I think it is critically important to instead work to build a bridge between legacy and the future if we want to see a future. I’d hate to get to the end of this and all we’ve done is further consolidated power in the hands of the old or the new, and failed to actually build a fair and equitable system. Again, these promises have been made before and the outcome not so good.

One of the key and primary features inherent in blockchain is the ability to put data into a public ledger that has a level of privacy. However, there are many things that people do not want to ever enter into any blockchain. Some things should always remain private and some transactions should never be made public. In some cases, there are private sales of valuable assets whereby certain parties do not want entered into any public ledger, including things that are political or involve safety. Not only that, but there are issues surrounding just how private any transaction can be:

“Elliptic’s ability to track various participants in the bitcoin network should be an eye-opener for anyone who still thinks the digital money can be easily transferred in an anonymous manner. When asked about his thoughts on future privacy enhancements for bitcoin, Dr. Smith explained:

‘We welcome increased privacy features, and such new technology will inevitably change the way we have to detect crime, but increased privacy does not necessarily have to equate to more freedom for criminals.’”

A nice sentiment, protecting us all from criminals, but criminality is often an issue around territories and privacy isn’t always about criminal behavior. While you cannot defend any centralized technology company or online retailer as a bastion of security <cough>ashleymadison</cough>, at least some of those exposed transactional events are mitigated by being limited to specific platforms. But what about splaying everything out in the open? Also, privacy can not only be a positive aspect, it can also be a negative one. For example, there is the possibility that blockchain could be used for nefarious purposes such as distributing malware or child pornography:

“A loophole in the code that powers Bitcoin, which heretofore has mostly been used to post jokes, was discovered this week to contain repellent links to sex sites, including child porn, according to CNN Money.
The code was uncovered in Bitcoin’s blockchain, the distributed digital ledger that keeps track of all Bitcoin transactions.”


“Although the code modifications are not dangerous in terms of malware, they do pose a potential danger to anyone who owns Bitcoin. The problem with this rubbish—well, one of the many problems—is that these messages become part of the blockchain for the life of the ledger.
According to a statement from INTERPOL and researchers from cyber security research firm Kaspersky Labs, uploading malware to the blockchain would make it extremely hard to get rid of. Indeed, there are “no methods currently available to wipe this data,” according to the statement. Once a file is in the blockchain, and hence on every computer in the Bitcoin network, it’s there forever. For now, at least.”

In fairness, pretty much anything on the Internet is capable of being used for good or bad behavior, but this does go to my point of how important authority and trust will be with using blockchain.

In Closing
While there are certain benefits from the ideas behind blockchain and distributed databases, which citizens and entities can use as a way to validate that something happened, we already have database technologies and platforms that perform these exact tasks, and in many cases, the companies that back them up are not only already considered authorities, but have the financial and insurance backing to give them an added element of trust.

If there’s a violation of trust somewhere down the road occurring with a decentralized database that belongs to no one, who will we go to to get our recompense? In fact one could even argue that corporations could adopt decentralized blockchain transaction ledgers to indemnify themselves from risk, and when citizens want accountability, they just pull a “safe harbor” type of shrug and tell you you are out of luck. Sorry your money is gone but the blockchain doesn’t lie. So while there is great promise in the ideas of “why” blockchain, it may be time to evaluate the best ways to execute these ideas before we find ourselves too far down a road without truly thinking what the outcome will ultimately be. We certainly have seen enough negative disruption that has hurt many a career, and can creative industries really afford to take another hit? Maybe the rush to jump to funding or back every blockchain technology should be met with some added scrutiny, and I include myself in that.


P.S. My Personal View
I feel I’ve been critical enough with the above observations that I can now honestly tell you that regardless of the issues I’ve mentioned above, I actually do support blockchain technology and some of the ideas behind it. That didn’t happen overnight. For our own project, OCL, I simply looked at those issues and asked myself, how do we solve them?

My favorite quote is from Dieter Rams who said:

“Question everything generally thought to be obvious.”

We all sat down, did just that, and worked out solutions around those concerns. Once we got past that, I realized that yes, there is remarkable value and power in the ideas behind blockchain, but it will require more than just a bunch of clever ideas, it also will require a great deal of cooperation and a bit of hand holding, and some patience. But if we can get beyond all the media hype and hyperbole, there is something amazing here. The question to ask though, is whether it will truly benefit artists and the creative class or will we simply give birth to yet another techno-oligarchy.

Alan Graham is the co-founder of OCL http://n2one.us

California’s Other Drought: The Coming Ad Revenue Crisis

Guest Post By Alan Graham

Last month I published this piece over on LinkedIn, but I felt it might need a second viewing (with updates) over here based on recent news on ad blocking and other developments. 


Silicon Valley has a drought problem. But it isn’t the lack of water I’m concerned about. It is the over reliance on ad revenue and venture capital that is sustaining both tech and media. Now there’s a debate raging about whether or not we’re in another bubble (I was in the last one). The pro-bubble argument is often about overvaluations and spending. The anti-bubble argument shows charts on how VC investments and IPOs are much lower than the last one. Both sides completely miss the mark which is that since Google (er…Alphabet) and others began building empires on “freemium” type services, we’ve become accustomed to not having to pay for things, and what began with a tool here and there and some “free” content has actually become the predominant method of generating revenue across the web.

A possible disaster.

For the past two years I’ve been working on a project called OCL. One thing it does is it is the world’s first true microlicensing platform for apps that allows the merging of any creative asset with any other creative asset with all of the rights cleared “faster than instantly.” Yes…that’s possible. And it is actually built upon the idea of paying for things (a novel idea these days I know). I’ve run into a lot of resistance over this model to the point where I recently had an argument with a music journalist who saw no problem with the idea that advertising was a viable long term model of revenue and my predictions/concerns over a non-sustainable ad market (for everything) was silly.

I’ve also had many a meeting with executives who told me countless times that the punter won’t pay for anything. Their business model is to license large platforms and take a cut of ad revenue. During this time I’ve pointed out that with a finite amount of ad revenue that must be shared across all creative industries and tech platforms (all vying for attention), it simply is not possible to sustain a vibrant creative marketplace that requires ad revenue to keep it chugging along. And if those platforms have their revenue somewhat interrupted, that trickles down.

The reasons for being concerned are clear:

-ContentID was a anomaly born out of necessity to bring some order to a chaotic system of copyright infringement and push the biggest piracy site into some form of legitimacy.

-YouTube went from a method of promotion, to a method of generating much needed revenue, to cannibalizing sales of media, as there was no reason to purchase what you were already viewing/listening to.

-Ad revenue (CPCs) have been dropping year over year for the past 5 or so years, while volume continues to increase.

-Volume is increasing because there are simply more and more locations to place ads in an increasingly competitive market with a finite amount of ad dollars that simply shift from one point to another depending on popularity. Companies with ad budgets don’t suddenly spend more money because there are more locations to spend it. And quite frankly…volume is practically infinite.

-Increase in volume means a competitive marketplace that can drive CPC and other ad rates down further because we’re witnessing something happening to ads that happened to media, commoditization. All about numbers at this point, not quality of creative.

-We’re just getting started. Estimated reach/penetration of iOS/Android/FB is anywhere from 5M to 9M apps/platforms with 40k apps being added to iTunes each month alone. Reports show that the range of “free” apps is somewhere around 90%, both ad supported and in-app purchases. As that tail grows, so does volume.

-86%+ of our time accessing the web is now done through apps.

-Ad networks and other ad-based companies are going to get squeezed out of existence because of this, causing a collapse of an entire segment of tech which means thousands of high paying jobs are gonna go bye-bye and never come back. This is already starting to happen.

-Ad revenue is currently 80%+ of all revenue generated by Facebook and Google, two of the most important platforms for media distribution. It keeps their lights on and it is this revenue creators hitched their wagons to.

-Media companies (music, news, video, images) are scrambling to get a cut of that same ad revenue and finding they not only are competing for that money, they often have to spend money towards making that money back. Welcome to the world of paid non-organic reach. You now work for the company, live in company housing, and shop at the company store.

-Ad blocking is starting to take off in popularity and in court cases the judges in two instances sided with the ad blocking company stating that the user gets to decide what they want to do with their devices. 

What does this mean for rights owners?:

“Online ad blocking costs sites nearly $22 billion
The study, by software group Adobe and Ireland-based consultancy PageFair, found that the number of Internet users employing ad-blocking software has jumped 41 percent in the past 12 months to 198 million.”

 “Those losses are expected to grow to more than $41 billion in 2016, the study said.”

But that’s not all, there is also fraud:

“Last year, Google reported that 56.1 percent of all ads served were not measured viewable by humans.”

“Last December, the Association of National Advertisers and security firm WhiteOps estimated that up to a quarter of video ad views were fraudulent and resulting from software bots. It also said that as much as half of publisher traffic is from bots. This represents a projected $6 billion-plus in wasted ad spend this year.”

“Some industry observers go further than that, arguing that the digital ad industry is beset by traffic and other fraud because there’s a sort of arbitrage going on. Some exchanges, publishers, and ad networks are looking the other way, this argument goes, because they can make money on fraudulent traffic and fake ads.”

“The main losers are the advertisers themselves. But the publishers are getting shafted as well, Spanfeller said, since advertisers are paying $10 per thousand impressions while some publishers ‘get a buck.'”


-Mobile carriers in Europe are hinting that they also may begin to block ads at the carrier level citing increased performance and reduced bandwidth. How soon until we start to see ISPs offer the same services?

-It is estimated that Google is seeing as much as $6B in ad blocking occurring, and their total revenue in 2014 was $66B. That’s no laughing matter for a company making 90% of revenue from ads. Their response was to essentially say that the reason people are blocking ads is because we’re simply not making good enough ads. Yeah…that’s the reason. That type of flippant response to a $6B loss is why you should be very worried, because it means they are worried and don’t yet have an answer.

-For smaller publishers the problem is more pronounced. ProSiebenSat, one of the companies that sued Ad Blocker Plus and lost, stated that ad blocking was costing them upwards of 1/5 of their revenue or €9.2M

-Ad blocking users have grown to an army of nearly 200M people. That’s a word of mouth marketplace that any company would kill to have, except they are evangelizing the death of your business. Think about it as 200M people who have decided what you provide is interesting enough, just not interesting enough to pay for it via your #1 monetization plan. What’s your backup plan for monetization? What that says to me is that there are likely millions of content platforms overvalued and poised to collapse.

-With Apple’s recent announcement that they would allow third party developers to create ad blocking extensions for mobile Safari, the attention brought to this might take it mainstream, considering there are hundreds of millions of iOS devices and mobile Safari represents 25% of browsing. Welcome to the next viral technology success that you can’t actually afford to have take off.

-Facebook’s Instant Articles strategy could possibly be where advertising lives on, meaning that online publishers will have to become even more reliant on the tech giant for revenue, although it is likely both Apple and Google will follow suit. Meaning more of the open web gets sucked into the app environment where walls and AI decide what we will see and hear.

-My own tests with ad blocking has removed every ad from YouTube, one of the primary revenue sources for music labels and artists. Consider that most videos using music on YouTube (likely 60-70%) never generate any ad revenue at all, not to mention that YouTube is still not profitable (really?), this is one basket of eggs I’d be thinking of taking some eggs out of…

-Ad blocking is getting more and more sophisticated with ad block plug ins for Safari, Android, Chrome, and even Spotify. Not only can you block Spotify ads (the freemium model they defend to the death – no freemium no paid), but you can rip tracks from Spotify with all the metadata intact.

PopcornTime. Free movies and tv shows playing direct to your device with a gorgeous interface, high quality resolution, built-in VPN, and zero ads…need I say more? Expect more solutions like this to pop up, including alternative music platforms. IMAGINE: Playlists created in Spotify exported to a BitTorrent decentralized music player…this will happen.

The next 12-24 months are going to be a watershed where we see just how much of this shakes out. The problems are numerous, but the biggest issue I see is that we’ve spent so much time investing in ad-based technologies and their revenue streams, we’ve not built a single alternative solution which can cover any losses if this all goes belly up. There is a massive consolidation of power occurring at the top of tech where we may only be left with 4-5 companies that control most of the web/Internet as we use to know it, and the creative class is left with no real technology of its own and very few options of how to reach their customers without being at the mercy of another giant tech company.

Years ago I use to drive between California and Oregon quite often and I began to see a trend happening. The boats on the reservoir began to leave the docks as the water receded from the shore. They began to huddle together in the center of the lake as there was less and less water. Essentially they became the last holdouts hoping a great rain would restore everything to the way it was. But it won’t.

Part of the problem California is facing with its shortage of water is due to the fact that they never planned for the possibility of drought, although they certainly talked a lot about it. They are shortsighted. They saw an endless supply of water and all the riches it brought. As humans we very rarely ever prepare for the worst, because we’re always so caught up in the moment and at the moment we’re still feeling the best of times: toilets are still flushing and faucets are still flowing.

The situation with ad revenue and VC backed advances and payments is no different, and if we don’t start working on a fundamental shift on how we as a society pay for things we value, we’re going to see a lot more than just water dry up.

Alan Graham is the co-founder of OCL

Disruption And The Death Of The Creative Class : Part 1 of 2

Guest post by Alan Graham

This is a long piece. I’m warning you in advance, because these days our short attention spans generally peter out after…well about now. But if you are a professional creator, emerging artist, or rights owner on this planet, you should read this, and the piece that will follow it. It is not simply a call to action, but hopefully an opportunity to open minds to what the creative class is truly facing. 


Disruptthrow into confusionthrow intodisorderthrow into disarray, 
cause confusion/turmoil inplay havoc with; disturbinterfere with

upset, unsettle; obstructimpedehold updelayinterruptsuspend; 
informal throw a (monkey) wrench into the works of.


The word disruption is often worn as a merit badge amongst tech circles. The negative connotations have been twisted into a positive. This arose from the obstruction of progress that tech often faced from legacy businesses, who generally held all the keys to all the doors and often refused to share. I have personally experienced this myself, and still see it happening to this day. In the past I use to use “disruptive” quite often in a positive context, up until I began a project in the music industry. Beginning from the ground up, you see the industry for what it actually is, passionate creative people, not just some amorphous entity encapsulated by the words “music industry”.

I realized that any more technological “disruption” will equal death. And not just the death of old inefficient systems, but the actual freedom that this age of technology had promised to deliver the creative class if you just came along for the ride. You believe you have freedom of choice, but as I’ll point out a bit later, it is an illusion. What good are a thousand different choices that are owned by the same handful of people? 

We need something better than disruption. We need something that belongs to you. 

I don’t need to tell you your very livelihood is at stake, but based on those I meet in the music industry, you are ill equipped and not ready for what is coming. I know you think you know what is happening, but you don’t. These days there is a lot of talk about things like “transparency” which are general abstractions that point towards a lack of clarity and openness between record labels, the deals they make, and royalties. It has become the subject du jour. I cannot speak to those issues. However, what I want to call attention to is that while you and the media are all focusing on those issues, which are of course important, it also serves as a bit of misdirection for issues on the horizon which are much larger problems.

Technology is about to take away your power to enforce your rights. While it joins your chorus and lauds the need for more transparency, it will simultaneously make things more opaque, obfuscating how your creations are used, where they are used, etc. Infringement and piracy is about to get worse than ever before, moral rights will soon disappear, and the DMCA provisions that gave you some semblance of control, will lose all their teeth. While your tech friends get you to focus on the lack of openness from within your own industry and work towards making it more accountable, they are already making that issue moot. You just don’t see it yet. This is exactly what they want. And if you think copyright is going to save you, it already may be too late for that, unless we solve these issues rapidly. The new flag flying in tech is “privacy,” and while it is easy to get everyone on board with that idea, it will render copyright unenforceable.

Privacy always trumps copyright. 

I’m going to look into this in detail in the second part of this piece (although I’ll hint at it here), but in order to get there, we need to start by understanding how we got where we are right now.   


You May Ask Yourself – Well How Did I Get Here?
“Media companies are running scared these days. Their failure to embrace technology has put them in a delicate position. For the first time in history, the bread and butter of the media enterprises like music, film, and television are faced with the fact that they may no longer be in control of their business.”
Hard to believe I wrote those words 12 years ago, since it feels like I could have written those same words today. 
Back then, I was furious at the heavy handed tactics of the RIAA and the political clout they seemed to wield on Capital Hill. It was clear that their all out onslaught against file sharing was taking a scorched earth approach towards everything that only made the music industry look petty, while clearly trying to deny that the pace of technology would eclipse them in a very short time. Turned out to be very short indeed. Last time I checked, torrents, downloads, and streaming are thriving as the preferred methods of media delivery these days. And yet here we are, trying the same old strategies
For many years I was fully on the side of tech, whose intentions back then seemed pure in its desire to truly improve the lives of people through the democratization of information. Who couldn’t get behind the idea of “don’t be evil?” The entire technology sector is marketed to us every day with positive affirmations of change and hope. Who wouldn’t love a company that names its OS releases after candy? 
In that piece I was essentially writing a call to action of sorts as well, that if technology didn’t want to find itself at the mercy of big media, it needed to start getting savvy when it came to political influence. We needed to even the playing field.
Letting The Days Go By
Wow, that was fast. We see today’s youth idolizing tech giants more than rock stars, with teens even building startups from their bedrooms. There are major motion pictures with both protagonists and antagonists from tech. “Silicon Valley”, a show that is a remarkably accurate parody of the delusional echo chamber that is Silicon Valley, is somehow adored by those in Silicon Valley who obviously don’t seem to see the absurdity.
Since I wrote my original technology call to action, Google’s lobbying fees have gone from $80k a year to a yearly peak of $18M in 2012, with cumulative lobbying expenditures projected out just five years from now looking to top well over $100M. From just one company! In political influence, the tech industry has eclipsed media and is on track to surpass Oil and Gas.
This doesn’t even begin to count all the astroturfing that goes on in the guise of “grassroots” campaigns. That’s not to say that big media doesn’t employ the same tactics, but as you can see, the tech sector is a quick study, and in fact, they build all the grassroots tools. Deploying a hundred “cause sites” (as I call them) that garner 100k signatures over a weekend is trivial.
“Legalize sharing,” urge press releases issued by Peers, another tech astroturfing outfit launched in 2013. Peers is the “grassroots” organization launched by “sharing economy” companies like the transportation app Lyft and the home subletting site Airbnb, the latter of which paid a PR group to create Peers.

All of these organizations have one common link: venture capitalist Ron Conway. Conway’s invested in Peers member companies like Airbnb and the online course web site Skillshare, and he’s a founding member of FWD.us and sf.citi, whose Affordable Housing Committee is headed up by none other than SPUR’s Gabriel Metcalf.

FWD.us as you might recall is led by Mark Zuckerberg, and in case you are curious of the type of power you are up against and all of the connections and ties to tools and services you use every day, look no further. Even the creative industries much lauded Patreon has ties to Facebook, not to mention it also has investment from the above mentioned Ron Conway, AKA The Godfather, who has made over 650 investments over the years. These include BuzzFeed, Digg, Facebook, Google, Napster, PayPal, Pinterest, Reddit, Square, and Twitter. There isn’t likely a single creative industry tool or service that you use that doesn’t likely have some direct investment connection to Silicon Valley. Somehow, whether you like it or not, you are always going to be paying part of your earnings to someone in northern California. Meet the new boss…
We always think of monopolies as corporate entities, but what about investors? This isn’t a many headed hydra, this is an all encompassing blob. As I mentioned at the beginning of this piece, with a little misdirection, we are focusing our discussions on only one area where transparency is desired, yet where we need it most is unlocking and questioning all these connections within investment circles and their impact on your lives.
While I support the general idea of investment, this isn’t the Internet I signed up for, where power is consolidated into a small group of people residing in a 25 square mile area in California. Not to mention there are many like me who never believed that the mantra adopted (and misunderstood by many) that information should be free meant that it had no cost. For many of us, the intent was that information should be able to move freely, with little friction, but somewhere along the line, wires got crossed and the message was corrupted.
While there are many people, like Robert Levine, who have done much more research on how we got here, I have plenty of anecdotal evidence having lived through the deluge of “free” as a writer, and it is clear that the monetization of free media through advertising, venture capital, and acquisitions has left professional creators in a precarious state, reducing the value of creative content to what you can get it for with an upfront advance or the lowest bid for it on a Cost Per Click (CPC) basis. Considering how much of tech is funded and subsidized by the previous, we are simply one economic hiccup away from a serious problem. So if you put a lot of eggs in those baskets…you are one mixed metaphor from a house of cards. CPC’s have been dropping year after year, while volume continues to increase. Essentially, we just keep moving the same money around from platform to platform. Moving music or videos to Facebook doesn’t magically create new money, it just takes it from someone else.
Into The Blue Again, After The Money’s Gone 
Tech has done a remarkable job of rebranding itself into the victim, but the victim of what exactly? Success? Practically everything driving the internet economy falls under copyright, all of it provided and fed into their platforms by creators of all kinds (professionals and regular citizens). All of it serves the purpose of providing immense value to tech platforms by which many established companies are generating massive revenue. Take two of the top platforms out there and you’ll find revenues that far surpass those of the entire global music business. Even market valuations of newly minted startups are almost impossible to fathom. Snapchat’s current valuation is higher than the entire music industries revenue. Now compare that with an indie record label with a 20+ year catalogue of respected works that can no longer sell them, because you can get them for free on some web platform that’s literally minutes old. A life’s work disrupted by companies whose existence in months can be counted on fingers and toes.
WTF is going on? Have we collectively lost our goddamn minds?
Same As It Ever Was…Same As It Ever Was
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If we look back at the turbulent start of YouTube, it was clear that the modus operandi was Superius Augmentum Omnia or “growth above everything”, something for startups that is still true to this day (maybe more so), generally driven by hopes of acquisition or IPO. Due to the Viacom lawsuit, we got some insight into just how serious they took copyright infringement with internal missives from YouTube employees like:
“technically we shouldn’t allow it . . . but we’re not going to take it off until the person that holds the copyright. . . is lìke . . . you shouldnt have that. . . then we’ll take it off .” 
“…but we can leave this up until someone bitches.    
The latter of which has actually become Silicon Valley’s legal position and business model, one backed up by Safe Harbor provisions. This is a model that is supported voraciously by organizations like the once laudable EFF, whose constant push to erode copyright laws ultimately benefits those who they get most of their funding from, at the expense of the citizens they strive to protect. Their boards are tech and law heavy, creator light. In fact, between boards and staff, I count over 30 lawyers.
Forget commercial media copyright issues for a second. In an age where information is more valuable than gold or oil, can you think of a civil right more important to citizens than their own copyright? Yet these groups want you to voluntarily work on their behalf, while donating money, to take those rights away while they fight on to protect your “privacy”. The same organization that has tutorial after tutorial on opting-out of things, by default signs you up to their mailings when you sign a petition.

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Say what you will about the complexities or unfair exploitation of copyright by media corporations, the moment you actually kill copyright, is the moment that technology companies will take the exploitation of your ideas, thoughts, feelings, and creative works to entirely new heights. These plans are already being devised in the seedy dungeons where EULAs are crafted by legal minds trained in the darkest of arts. Don’t believe me? It has already begun. And what’s the EFF doing about it? 
…while the Electronic Frontier Foundation’s intellectual property director Corynne McSherry confirmed that “it doesn’t appear that Flickr is doing anything wrong”.
So in the end, just how useful is that Creative Commons license?

Flickr’s latest business model – selling wall-art prints of more than 50m imagesshot by its community of photographers – has sparked a debate around Creative Commons licensing.

The Yahoo-owned site will keep all the revenues from sales of prints based on photos shared to Flickr using a Creative Commons “commercial attribution” licence, which allows commercial use.

But I digress.
YouTube’s post acquisition solution to the problem of infringement was to create ContentID, an anomalous band-aid built to appease rights owners. It was a Faustian deal created out of the need to bring some sense of control (even if it were the illusion of control) to the Wild West of infringement. I don’t blame the music industry for making this deal, because they had very few options at the time. But due to a lack of technical solutions, instead of building direct relationships with citizens, the music industry was forced to choose platforms over people, thus putting a middle man in-between them. Guess who actually has the meaningful relationship with the customer? The result being that ContentID and ad sharing revenue essentially created a system by which people are rewarded for bad behavior, and there are really no repercussions. I doubt even YouTube knows the full scale of rights violations on their platform, and possibly why after all these years, they still refuse to disclose how much money in revenue they generate. 
Because if artists only knew just how much money is made and yet missing…
However, the promise of YouTube being a phenomenal tool of promotion for selling music, has in fact had the opposite effect in that it actually created the most popular “free” music platform on earth. While I was busy buying music like a dumbass (plus a paid Rhapsody user since 2006), I failed to see that coming. But it turns out I may be stupidly paying Netflix as well, as YouTube is a great unmonetized free tv and movie platform as well. If the MPAA and others think they’ve got this under control… 
Many videos on YouTube today are simply the title of a popular piece of media, but to avoid a piracy takedown or to sidestep ContentID, are in fact several minutes of silence plus a link to an outside site where the pirated media sits, making it nearly impossible to find or remove. Due to the scale of postings to YouTube, managing this and other copyright issues is a near impossibility. Here’s an example of this on YouTube right now. Just search for a popular TV show.
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If you follow the link in the description you can get to the external site and even read their laughable DMCA notice which is as follows:
“It should be noted that is a simple search engine of videos available at a wide variety of third party websites.
Any videos shown on third party websites are the responsibility of those sites and not . We have no knowledge of whether content shown on third party websites is or is not authorized by the content owner as that is a matter between the host site and the content owner. does not host any content on its servers or network.”
Ah, Safe Harbor in action. Hey startups, here’s how to maximize its use:
1. We’re just simply a search engine/web platform. Check
2. We have no responsibility for infringing material of others. Check
3. Hosted in a foreign country. Bonus Check
Good luck suing us!
Half-assed English legalese, with most of its traffic coming from the US, no information on the domain registrant. Seems legit.
Am I Right? Am I Wrong?
Irony of ironies, now YouTube stars, who often found themselves at the other end of a music takedown (for improperly using music) and decried the heavy handed tactics used against them (we’re giving you free promotion!), have now found themselves in their own piracy hell. Via a practice known as “freebooting,” they are now finding their works essentially stolen and reposted on other platforms that either make the infringer money or simply are diluting the value of the views these stars need to keep their fledgling stars shining. One “victim” of this is Grant Thompson, of the YouTube channel, The King of Random. Grant sometimes repurposes ideas he finds around the web into videos which may include Creative Commons music, that he then monetizes. He’s understandably frustrated (careful not to drink any beverages while reading this):
“The worst thing is just the shock of how viral they go on Facebook compared to the ones I post on YouTube,” Thompson said of his videos. “Some of these videos I’ve been working on for years. It makes me wonder why I want to keep doing this.
Guys…can you imagine? What must that be like, I wonder, slaving on something for years, only to have it stolen and enjoyed for free again and again? Somebody should do something. Anyone?
Hank Green, a self-described Internetainerpreneur (seriously?), recently wrote a piece on the seriousness of freebooting and how Facebook is essentially a liar. Again, you might want to take precautions to avoid a spit take.
“I’m a professional YouTube creator. Some people think that this is some kind of joke but I have 30 employees. All of them work in the online video industry, about half of them work directly on producing videos for our educational YouTube channels. We’re a small, profitable business.
Re: Facebook “But there are a few things that make me wary, not of their ability to grow my business, but of whether they give a shit about creators, which is actually pretty important to me.
and my favorite:
“What to do? Well, the lack of searchability on Facebook makes it impossible for creators to discover when their content is being freebooted, so if you see suspect content, please reach out to the creator so they can take action. If you have any legal or technical solutions you think might work, please post those as responses to this. And above all, just know that this is an issue and share what you can with who you can. Facebook won’t hold itself accountable, but maybe they will if we make them.
Citizens, can you please help them? We need to make Facebook accountable for the seriousness that is freebooting. Theft of intellectual property is a big deal and….god I just can’t believe the fucking balls of these guys! Is this really happening, YouTubers complaining their content is being stolen after all the shit they gave music rights owners for trying to enforce the exact same rules? Don’t worry about these guys though, they’ve got over 6,000 patrons on Patreon paying a total of $31k a month. They’ll manage.
And yeah…it’s the same guy who said about using a Calvin Harris song illegally in his video:
“this was a blatant violation of copyright, I just stole it, but somehow, that’s okay”
Do you find this delivery charming or smug?
His explanation in August 2014 is essentially that it is okay to take something…wait, let me just use his word…it is okay to steal something, as long as there is some monetization engine in place in which the rights owner can get paid. Now things like asking permission or paying for an actual sync license or just using music that is in the Creative Commons, is for idiots, because stealing is okay when it is your stuff (music artists), but when it is my stuff (YouTube star):

But most creators have responded, thus far, the same way as me. By shrugging our shoulders and saying “What am I gonna do about it…it’s Facebook, they’re massive.”

But that’s exactly what makes it so awful.

This all sounds so very familiar. Where have I heard this argument before?
Regarding their freebooting issue…aren’t freebooters in fact just giving them free promotion?
This Is Not My Beautiful House
Paraphrasing the late great Bill Hicks who once said if you advertised a product you are off the artistic roll call forever, these days you don’t have the luxury anymore of not being a shill for a product. For example, if your music illegally appears on a Hank Green Internetainerpreneur Educational video about how artists can go fuck themselves, perhaps you have to accept that Nespresso will Awaken Your Senses. Yes, artists have simply become products, exploited to sell other products. I’m pretty sure when Bob Dylan was singing “If your time to you, is worth savin’” he clearly was speaking about the importance of keeping my Mac clean with CleanMyMac 3 (the current ad I see on YouTube). The times really are a changin. You know what’s blowin in the wind?  These nifty 3D T-Shirts by Clothing Monster. George Harrison’s Guitar may be gently weeping, but you don’t have to cry if you switch over to Gmail.
Sadly, YouTube has turned even Bill Hicks into a pitch man for a sugary food marketed towards children. If you know his work, this is the irony of ironies.
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I remember an age where we actually lost respect for any artist who was associated with a brand. Now I’m happy to see them able to make any money at all, even if it requires ads loading around their art or them pitching some product. However, I recently began employing ad blocking because my computer is often choking on the resources required to load even a single web page. Seriously, should it require 30+ calls to third party ad trackers and 3GB of RAM to read an article? And the tech industries answer to the upcoming ad blocking explosion of doom (you remember ads, the things musicians now make money from) is that they believe the problem is that they just aren’t creating enough ads people want to see.
Um…yeah…right, that’s the reason.
Should you worry about this?

PageFair, a company that works with publishers to measure the cost of ad blocking and to help them display less intrusive advertising that can be whitelisted by the ad blockers, estimates that Google lost out on $6.6 billion in global revenue to ad blockers last year.

To put that into context, that’s 10% of the total revenue Google reported in 2014.


Spending on digital video advertising increased almost 60 percent in 2014 from the previous year. During the same period, the number of Internet users using ad blockers rose from 54 million to 121 million. Today, almost 150 million people have downloaded ad-blocking software

I mean why should you worry, it is only $6B of what might also be your money that was “lost”. 
BTW, while listening to the entire Imogen Heap album, “Sparks,” on YouTube, how about cooking up a batch of Uncle Ben’s rice for dinner? Or how about buying a new Chromecast device from Google, for just £30? Courtesy of an unauthorized upload of Zoe Keating’s song Frozen Angels. Yes, Google is happy to promote its own products on infringing content, from a woman they tried to bully into accepting their “take it or leave it” terms. That’s some fucking hubris right there.
It is likely (judging by YouTube’s own released statistics) that the majority of infringing use on YouTube goes completely unmonetized (between low volume video views and ad blocking). And while music has found a way to carve out some form of payment through ad sharing, other rights owners have been caught with no options for monetization at all. If you are a professional photographer, illustrator, or digital artist, and any of your work is somewhere online, it could be found on some video on YouTube, yet how would you in fact know? Sorry, there’s no ContentID for you. I have easily found videos with upwards of a hundred copyright violations (in just 4 minutes of video), with no remuneration for visual artists. So while the music industry might have found a way to monetize improper use of music online (through audio fingerprinting), many other digital artist whose work appears in those videos, get nothing. Is this not a class action lawsuit waiting to happen? Hello, photographers? Deep pockets over there.
And while everyone knows what I’ve outlined above, all of that pales in comparison to what’s coming very soon, which we’ll explore in more detail in part two of this piece.
Where Does That Highway Go To? 
In a 2013 Billboard interview with Universal Music head Lucian Grainge, he was asked about power, and part of his response was:
“Power is the ability to stop new services. Power is the ability to create new services. That’s power.
While I get the larger point put forward by Mr. Grainge (and we certainly need a tough stance), the problem when it comes to the music industry is the belief that what you have is more valuable than what the other side has. While that might have seemed the case many years ago, if you were to ask people today if they had a choice to give up social media or music, would you really want to know their answer?
Snapchat alone has taught the coming generation that the ephemeral is more important than the past. So what’s the value of deep catalogue? What is more important than the “now”? Snapchat was even able to bypass negotiating with the music industry for music use by simply enabling music recording in snaps via using the speaker and microphone of a smartphone. I mean it is only 10 seconds of your song, so that has like…no value, right? No records, no auditing, no rights, no royalties, no evidence. Hey…it’s Safe Harbor…what are you gonna do about it? Plus, everything on their platform is deleted after 24 hours. How could Snapchat possibly know what people are doing on their platform, because um, privacy!
This idea of “power” is fleeting, because we have entered into a waiting game. Tech has the capital and resources to wait out creative industries, while they build alternate ways to create and deliver media. Tech is beginning to get heavily invested in not simply delivering media, but generating it, monetizing it, and even collecting royalties on it. So ask yourselves…in 5-10 years, what do they need any of you for?
They’ll build their own catalogues.
They will acquire new talent, and when you sign, you will fund your projects via their platforms, create media with their tools and in their studios, then release it with their tools. You will promote it with their tools, “sell/distribute” it with their tools, you’ll even tour using their tools – via their self driving cars, staying in their Air BnB’s. You’ll pay them at every turn for this process and then start all over again. Is this the vibrant creative class we really want to see? Is this freedom? Well look around you, it is happening….right now.
Once In A Lifetime
Are you angry yet? Frustrated? Motivated? You should be.
I wrote the above as a precursor to a second piece. This serves as a framework whereby I want to illustrate what has been happening so I could talk about what is about to happen. I want to delve deeper into actual technologies that will have a profound effect on the livelihood of creators. For the past two years I’ve been warning people in the creative industries of upcoming developments that make these issues of the past look like tinker toys. With all of the efforts put into strengthening copyright laws or protections for rights owners, none of what is currently proposed will do any good whatsoever, unless we find a way to strike a balance between creative and tech, and that means creative needs to start pulling together.
What is needed is a new approach that does not solely rely on solutions provided through legal means. No, what has to happen is that the creative industries need to start building their own technology that belongs to them and serves their greater good and that the tech industry has to use. The politics have got to stop. Majors vs indies, it’s a battle they want you to be fighting, because out of left field will come disruption. Yet working together to solve many of the issues and problems facing creators is no longer something we can just pay lip service to, it is a moral imperative.
Technology doesn’t care about borders, regions, laws, rules, or fairness. It cares about results…and it is time the creative industries started delivering some.
David Byrne once said about the song Once In A Lifetime:
“We’re largely unconscious,” Byrne says. “You know, we operate half awake or on autopilot and end up, whatever, with a house and family and job and everything else, and we haven’t really stopped to ask ourselves, ‘How did I get here?‘ “
More importantly, the question to answer now is, where are we going?
Alan Graham is the co-founder of OCL