Apple-Dubset Deal Marks A Rights-Tech Milestone

DJ_2010Apple Music this week tapped rights-tech developer Dubset Media to manage clearances and royalty payments for DJ mixes and other mashups, opening the way for thousands of hours of user-generated content to be made available legally on the streaming service.

The deal, which relies on Dubset’s proprietary technology for identifying the individual tracks used in extended mixes and making payments to the appropriate rights owners, marks a milestone for electronic dance music (EDM) and other types of derivative work, such as DJ mixes and remixes, which have become hugely popular with music fans but until now have largely been kept off the major streaming services due to the difficulty and complexity of clearing the rights for the dozens of tracks they typically include.

Instead, most EDM and DJ mixes wound up on platforms like SoundCloud, which until recently had no licensing deals in place with music labels or publishers, or on underground streaming services that are less particular about copyrights.

“Our genre has grown hand in hand with the rapid growth of streaming and digital services yet, despite billions of online plays, most of our creators and rights-holders earn very little for their efforts compared to their ‘pop’ peers,” Association of Electronic Music CEO Mark Lawrence told Music Business Worldwide in response to the Dubset announcement. “This is the first move to correct the imbalance.”

But the deal also represents a milestone in a growing effort, both in the music business and in other media industries, to bring technology to bear on complex rights-management problems to try to open up new, more efficient and transparent channels for exploiting and monetizing media content rights.

Those rights-tech efforts could eventually prove as disruptive to the business of owning, using and licensing media rights as technology has already proved to the distribution side of the business.

According to Dubset CEO Stephan White, a typical DJ mix has 25 to 30 songs, requiring payments to 25 to 30 record labels, and anywhere from two to 10 publishers for each track. Altogether, a single mix could have upwards of 600 separate rights owners, White told Billboard.

Dubset managed to cut that Gordian knot through a combination of technology and painstaking negotiations with record labels and publishers.

The technology consists of two primary components. MixSCAN is a proprietary technology that automatically identifies the tracks included in a mix and then map that track list to the appropriate rights holders. According to the Dubset website:

Dubset’s MixSCAN® technology parses mixes & remixes into smaller micro audio segments and uses a combination of acoustic and textual fingerprinting technologies, along with proprietary heuristics and pattern analysis technology, to identify all the original master recordings used in the mix or remix. This information is then used to build a unique MixDNA track list and copyright structure that can be used to control usage and distribution of content by rights holders, and collection and administration of streaming royalties.

The result of five years of content analysis and algorithm design, MixSCAN® utilizes a library of over 100 million master recordings and dozens of additional authoritative databases to ensure accurate track identification and label/publisher rights holder association.

The other key component is MixBANK, is a digital marketplace for DJs, rights owners and music services that includes a library of millions of pre-cleared tracks. When a DJ uploads a mix it gets parsed and then checked against the pre-cleared library. If tracks included in the mix cannot be matched to their rights holders the DJ is notified and can make adjustments to the mix. Rights owners can also specify usage terms and conditions for individual tracks

Once a mix has been fully cleared it can be distributed to whatever music services the DJ wants and the rights permit. Payments to rights owners are then handled by Dubset.

Dubset is far from alone in trying to automate the process of music rights management, however. Last month, Tulln an der Donau, Austria-based Rebeat Digital launched its Music Enterprise Software platform to help record labels manage royalty accounting and artist contracts.

“Three years ago we released the Rebeat Business Edition, which was the world’s first integrated distribution and accounting-system. We developed that system because we saw that accounting-data was exploding and many labels were not able anymore to treat those data correctly in regard of accounting,” Rebeat CEO Guenter Loibl told Concurrent Media via email.

“Once you have all your digital-sales reports in one place it makes sense to add artist accounting, which we did. You can easily connect your products with artist contracts to your sales. And so artist accounting can be done in seconds. And once all sales-data in one place you can easily add the mechanicals-accounting as well, which we also did…We even went one step further, you can import any kind of revenues-stream (licenses, tickets, merch, etc.) create a contract for each revenue-stream and each artist. So with one single mouse-click you can do your accounting covering all the revenue-streams you need to share.”

Other entrepreneurs are exploring more radical approaches to overhauling how music rights are managed and monetized. PledgeMusic CEO Benji Rogers, who also sits on the Dubset advisory board, has been an outspoken proponent of adopting the blockchain open-ledger technology underlying Bitcoin and other cryptocurrencies as a model for the music business.

To put it simply, if we could put every song’s [essential metadata] into a global decentralized database owned by all who interact with it, then this would start to solve a multitude of the music and content industry’s problems regarding ownership, payments and transparency, Rogers wrote last year.

Blockchains also have another incredibly useful feature: the Smart Contract. Since this database is built on a trustless system, this allows for the creation of machine readable or “smart” contracts (like existing APIs) that can interact with the ledger and create and solve outcomes. For example, when a song is played “x” number of times, then “y” is payed to “z”. Or if a song is 25% owned by “a” and 75% owned by “b”, then a payment will be auto-split along this line and paid out once “c” uses have occurred.

If you were to add basic, Smart Contract-readable information to the MVD set, then you could allow third parties to interact with the entire database requiring less third-party slowdown of payments, and proof of work could be done instantaneously. Scenarios in which you could pay for only the amount of the song that you listen to could be created. Or payments in real time at a micro scale could exist (another great feature of Bitcoin).

Real-world experiments are getting close. Startup PeerTracks aims to launch its blockchain-based distribution platform MUSE later this year. Grammy Award-winning artist Imogen Heap released her latest song “Tiny Human” via Ujo Music, a blockchain-based e-commerce platform as a proof of concept, and has launched her own initiative, called Mycelia, to build an entire music ecosystem based on blockchain.

Blockchain technology is also attracting interest outside the music business. This week, NY-based startup Blockai announced it had raised $547,000 to launch a blockchain-based platform for authenticating works by graphic artists.

dubset-583x1024Blockai enables artists to register their works on the Bitcoin blockchain, generating a registration certificate providing cryptographic evidence of copyright ownership.

Works can then be distributed digitally without fear that rights information will get stripped from the asset, preventing the artist from rights to a use.

Similar blockchain-based applications for authenticating digital works have been developed by Monegraph, Ascribe, and Verisart.

The value-chain for most rights-based businesses has by now largely been remade by digital technology. Works are created digitally, distributed digitally, and consumed digitally.

Media organizations have become flatter and networks have become open and decentralized.

The one link in that chain that has so far resisted that tide, however, is in some ways the most important: the buying, selling and licensing of rights. That process has remained largely centralized, institutionalized, human-mediated, and opaque.

But from music to graphic arts, to publishing and photography, to film and video, movement has begun to remake the rights trade on the same machine-readable principles and terms as the rest of the value-chain.

This article first appeared in Concurrent Media.

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Author: Paul Sweeting

Paul Sweeting is the founder and principal of Concurrent Media Strategies, LLC and editor of RightsTech.com

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