A Dynamic IP Model for the Music Industry

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April 29, 2024

The digital landscape is constantly evolving, and so is how we create and consume music. However, the music industry’s foundations were not built for this. Therefore, artists struggle to grow and fully capture the value of their intellectual property, and IP ends up being a static asset that cannot be used across the Internet.

The music industry is blocked by the legacy of static IP management systems that no longer align with the dynamic and interactive digital landscape, or the expectations of Gen Z. Traditional music IP and licensing frameworks were designed to be a one-to-one transaction model. This model needs to be upgraded in a world where music is listened to and interacted with across various platforms, allowing it to be remixed, shared, and integrated into digital experiences.

From an analogue one-to-one era to a digital many-to-many era

Traditionally, licensing IP in the music industry was characterised by one-to-one relationships, where specific licences were negotiated individually between two parties. For example, a record label might deal directly with a single broadcaster or video game studio to allow the use of a particular piece of music. These agreements are tailored to both parties’ specific needs and expectations, including the terms related to duration, geographic scope, and financial arrangements. 

However, with advancements in digital technology and global music consumption, there’s a growing need to shift towards more universal and accessible licensing models. A single piece of music requires multiple licenses for different uses or users, moving from a one-to-one to a one-to-many relationship. 

This is further complicated by generative AI and user-generated content in digital spaces like the metaverse, which creates new, derivative works from various IP sources without clear consent or usage rights. This evolution pushes traditional IP management from a one-to-many model to a more complex many-to-many dynamic.

The Need for Dynamic IP

“Licensing needs to be made easier and more scalable for games so that it’s not only huge franchises that can do it.” – Meng Ru Kuok, BandLab CEO

The current static intellectual property management model limits creativity’s potential in our digital age. With the availability of tools and technologies for music creation, a massive volume of music is being put out worldwide. Despite this surge, creators are constrained in expanding their music’s value due to the complex licensing processes that require legal expertise and extensive paperwork. Furthermore, with the continuous expansion of social media and a booming creator economy, music creation is transitioning from being the exclusive domain of traditional musicians to becoming a widely accessible form of entertainment for the general public. This evolution underscores the need for licensing frameworks that are accessible to everyone and designed to support the extensive and varied use of music across the Internet.

What is Dynamic Music IP?

Dynamic IP represents a digitally adaptable, programmable, and expandable form of traditional intellectual property. It incorporates software modules that can be seen as “APIs” that automatically enforce pre-set terms and conditions for its use on the Internet. Embedding the rights and licensing agreements directly within the digital IP asset enables the creation of IP derivatives that build upon the IP base. This allows for the widespread use and further distribution of the IP across various applications, platforms, and media.

Imagine a system where music IP is not static but fluid, adapting in real-time to different uses across the Internet. This means that a song could seamlessly transition from being played on a metaverse radio in the morning to being used for AI model training in the afternoon and then sampled in a user-generated video on TikTok by evening—all supported with an auditable trace of use, without the manual licensing negotiations currently required and ensuring that royalties are paid out in real-time. 

A Robust Technology Grid for Dynamic Music IP

Blockchain networks have emerged as essential infrastructure for managing the complex relationships between creators, users, and IP in these new contexts. They serve as the foundational layer that mirrors the interconnected world upon which dynamic IP is built on – offering transparent and verifiable means of establishing the authenticity and ownership of tokenised IP assets. This grid supports the transparent provenance of all transactions and usage associated with the tokenised IP, thereby enhancing the efficiency of distribution and revenue-generating processes. This transforms music into a more accessible asset class, empowering rightsholders and opening up new opportunities for the industry.

Contributor

Web3 Music Association Executive VP of Token Economies and Blockchain Strategy

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