Keynote talk about the challenges facing Music and Blockchain

1. A Strong Wind
Could Blow It Over
The Fragile State State of
Music Blockchain Development
George Howard,
Berklee College of Music

2. Outline of Talk
General understanding of Fragility v Antifragility
Examples of Blockchain tech’s increased Antifragility
Reasons why Music and Blockchain are Fragile
Best Practices for Forward Momentum

3. Fragile v
Antifragile
Lindy Effect: The future life expectancy of some non-
perishable things like a technology or an idea is
proportional to their current age, so that every
additional period of survival implies a longer
remaining life expectancy. (Cite: Wikipedia)
Fragility: Things that are 'fragile' suffer from spouts of
disorder, volatility, and uncertainty. An antique glass
on a flimsy corner table. It looks pretty and holds up
nicely, until a small disturbance nudges the table and
knocks the vase off. Shattering it. (Cite: Zerohedge)
Antifragility: Hydra, the greek mythological creature
that has numerous heads. When one is cut off, two
grow back in its place. (Cite: Farnam St)

4. (Non music)
Blockchain
Anti Fragility
IBM Food Trust: Supply Chain Management: Food Safety
Plastic Bank: Turning ocean plastic waste into currency
World Wire: Cross border payments
Land title registry
Etc
(You even hear the word in ads)

5. And yet...Music - a
PERFECT use case for
Blockchain….Not so
much to show for it.
Deeply FRAGILE
The music industry has - since inception - existed as
a set of non-interoperable verticals
This state was a result of both intentional
information arbitrage and lack of technical solutions
(modeling rather than measuring)
The byproducts of this fractured ecosystem include:
lack of artistic autonomy, information asymmetries
(benefiting incumbents), massive barriers of entry to
music adjacent/orthogonal firms, confusion (and thus
transaction costs); vastly sub-optimized licensing
practices

6. Historic
“Solutions”
GRD
Various Representative Organizations
APIs
Matching of ISRC to ISWC
Mergers of necessity (HFA/SESAC)
Now the MLC...we shall see
-You don’t cut off the branch of the tree upon which
you sit

7. Points of Failure With Respect to
Blockchain and Music

8. Fundamental
lack of
understanding
of Music
Copyright
Attempting to license non-Controlled composition
works is essentially a non-starter.
Most people IN the industry don’t understand the
complexities around sound recording and composition
compositions; those from outside the industry….oy!
Stir in derivatives, co-writes, etc….doesn’t work.

9. Over-
estimation of
Smart
Contracts’
efficacy
So called “Smart Contracts” are neither “smart” or, prima facie, a
contract.
They are binary, if-this-then-that, rules.
While Moore’s law acceleration will likely lead to much more
robust usages, participants in the music industry who attempt
utilize smart contracts to dis-intermediate/automate complex
transactions will fail.

10. Lack of
”network
effect”
generative
products
Too many startups think that by simply adding the
word “blockchain” to their product, people will care.
They will not.
In fact, we will know blockchain-based music startups
have arrived when people stop saying the word
Blockchain.
We need product/market fit and a robust two-sided
market that is enhanced, but not defined, by
blockchain

11. Failure to
assume evil
with respect
to Incumbents
Sandbagging - creating projects intentionally doomed to fail in
order to provide PR cover/artist relations - is a very real thing.
Startups whose business model/success requires buy-in from an
incumbent will die of both a thousand cuts AND a high-profile
flame out.

12. Approach
Begin with controlled compositions
Coordinate and incent artists and “caretakers” via issuance of tokens
Overcome network effect issues via coordinating and incenting the other
(buy) side of the market via both clean rights and token issuance (ala tax
credits for films); majors arrive via Innovator’s Dilemma

13. Precedent exists
The SABRE database that has powered and massively grown the travel industry since
the 1950s is a precise analog to what the music industry could/should be.
Think of it this way:
1. In 1984 if you wanted to book a trip, you either spent all day on the phone or
utilized some costly intermediary (travel agent) to book your trip.
2. We license music today, the same way we booked travel in 1984
It doesn’t have to be this way, and the suggestions above would increase benefit for
both incumbents AND startups/artists.

14. Outcome
● Large database of machine-readable works that are licensable with no
intermediary and little-to-no transaction costs
● Numerous top of stack UIs constantly pulling from/adding to the substrate layer
● Firms heretofore barred from utilizing music enter and energize the entire space
● As the tech grows, add complications
● Standards/Metadata is set via efficient market use rather than top-down mandates
● Innovator’s dilemma tug eventually draws in more established catalog
● Vast new revenue streams emerge
● Free market / non compulsory / non governmental

16. Thank you
George Howard,
Berklee College of Music
Ghoward@berklee.edu
@gah650
Shameless plug for my new book