What NFT Provenance Means For Music Rights
NFT provenance — the immutable, provable and traceable DNA of a token, showing its genesis and permanently recording creator rights, identities, and royalties — is a hugely powerful force that can reshape creative industries by re-centering artists as the driving force behind their work. This is especially true for music, where access to metadata tracking sales and royalties can be an essential bridge between traditionally cash-strapped artists and the organizations that seek to support them.
Whether it’s music or other forms of intellectual property (IP), we need to find new ways to protect it. NFTs are able to transform music, acting as a permanent record of sale, creator, and rights information tied together in one place.
NFTs are tokens that can record their own history, not just the balance of an account, so NFTs can represent anything with a unique identity — real-world objects, people, digital media rights, and royalties.
Rights management has been a complex beast, evolving and changing on foundations that are full of inefficiencies and inconsistencies. A number of third-party organizations have emerged over the years to help manage music rights, each with its own system for tracking ownership and royalty distribution. Unfortunately, these are not interoperable with one another, which means that many times artists will have to sign up with multiple agencies in order to be registered across all their songs. And ultimately, rights management, copyright, licensing, and royalties are all mostly dependent on human execution, legal documentation, and contracts; these are prone to errors and are slow and expensive to operate, with layers of technical debt that can quickly become insurmountable for artists, labels and managers.
One way to help secure creative work is blockchain technology, a distributed ledger that tracks the history of an object or file. By creating a permanent record of data linked together in one place, blockchain protocols have the potential to transform how creative rights are recorded and tracked — helping artists to retain rights over their original works and manage their IP efficiently.
NFTs are changing data management and asset ownership, allowing creators to own their work with cryptographic proofs of authenticity. When musicians distribute their music as NFTs, they can cut out the layers that act as gatekeepers to royalty payments, managing the entire process on-chain, in real-time; whether you’re an artist, a fan, or a music exec, a frictionless way to unlock and enable better rights management is a win. The NFT represents the identity of a song; it’s like its DNA. The beauty of having this is that there is nothing hidden about a song — what you see are complete truth and the complete picture.
In order for this to work, blockchain systems need both a strong business model and a way to incentivize users. Fortunately, NFT protocols provide an easy way of doing both by marrying the power of blockchain with the proven benefits of digital ownership of music. As they say — we are still early, but the work that we are doing to lay the foundations of a better approach to rights management will protect the IP of artists, reduce administration costs and contribute to more transparency for the music ecosystem as a whole.