Can cities use blockchain to promote transparency in music?

The LinkNYC wifi hubs in action. Image: Getty.

Back in December 2014, without much fanfare, hundreds of standalone machines appeared on the streets of New York City, offering a number of free services for residents and tourists. These included accessing free WiFi, making a phone call, looking up directions and finding out important numbers, all accessed through a touchscreen that looks like a cross between a light post and a bikeshare-scheme stand.

The objective behind the LinkNYC screens was to provide free information to all New Yorkers and visitors, regardless of where one was or how much money they had. Accessible, available to everyone, transparent and helpful, the machines have assisted with mobility, access to information, communication and, importantly, civic engagement.

Last year, Estonia launched an e-residency business programme, aimed at recruiting entrepreneurs to register their company in the country and subsequently pay Estonian taxes on their profits. The program does not require business owners to move to Estonia: all filing and requisite paperwork is done online. The residency offer does, however, come with a number of tax incentives across R&D and recruitment to entice those lured digitally to explore opening up a bricks and mortar office.

The program has been especially popular with British businesses worried about Brexit and access to the EU. Using new technologies and methods, another often painstaking process – setting up a business – has been simplified for ease of access, much like finding a free and fast WiFi signal in NYC.

Both these examples use what the sector calls ‘smart’ technologies to improve people’s engagement with civic society. A smart city is one that develops an infrastructure of communication technology to give people access to information and resources in a way that’s almost effortless for the user.

In New York, it is the simple pain of getting around or finding WiFi. In Estonia, it is competing in the global market for entrepreneurs, their ideas and money. Across our cities and towns, more of these new technologies are being beta-tested, incubated and refined. This should engender improvements, especially in one of the most challenging issues in civics and cities today: making everything available to everyone in as fair and transparent a way as possible.

Both examples of successful, smart city technologies are built to foster transparency in a continuously moving organism in an even more complex ecosystem. There are other sectors that can benefit from this way of thinking. Take, for example, our sector and obsession: music. If we open up ideas, solutions and data for everyone, then – hopefully – everyone benefits. For music, transparency is in the eye of the beholder. The way that music is bought, sold and transferred could be rethought if we explore its challenges as a smart cities problem.

With music, the problem is not one with which the majority of the public is concerned: it is negotiated and debated behind closed doors. On the streets, the war against piracy in the mid-2000s is now assuaged. Most people have migrated to streaming services, such as Spotify and YouTube. The problem is, there’s no standard rate in which each song is paid per stream. Each service is different, and within each service, the rate depends on how much one’s track is being streamed at one given time, in one given place.

Behind this, there’s a century-old industry of collection societies, publishers and royalty administrators, moving bits and bytes across the globe in an effort to capture each penny, take a small percentage and then pass the remainder on to the creators.

The system is creaking under the requirement, in the streaming era, to keep track not only of each purchase but of every single listen. While listeners access tracks at the swipe of a touchscreen, payments to creators are slow – and in some areas opaque. Licensing information is not always easily accessible. Most problematically of all, there is not one single database of music copyright: there are several, none of them complete, and occasionally they actually disagree.


In NYC, before LinkNYC appeared, WiFi was more difficult to access in public. To those British businesspeople and entrepreneurs concerned with Brexit, access to the single market was more difficult without Estonia’s e-residency program. With music, the snags lie beneath the surface and that is where transparent systems can create change. Customers may not care or know how much each stream or download provides an artist, but artists and their representatives do. While solutions exist, the organism is not yet benefitting as a whole. The music sector, if treated as a city, is not as open as it should be. Smart cities technologies, ones adapted to impact traffic, banking, housing and healthcare, could be part of the solution, helping to provide a pathway to transparency.

Let’s build a roadmap of a song, from earbud to artist’s bank account. Once streamed, there could very well be five middlemen or women in the process. There can even be more if the chain crosses national borders, for instance if your song is played in Indonesia and you live and work in Boston. These intermediaries include publishing companies, rights administrators, royalty companies, collection societies, record labels, management companies and other entities.

Liken this to the process one goes through to open a bar in New York or stage a music festival in Poland. Both require multiple permissions and permits from different departments, each with their own schedules, objectives and requirements. Navigating the process requires as much work as realizing the art that initiated the process.

Lower barriers to entry, sometimes seen as empowering artists, have also resulted in an increasing number of musicians having to do it all – the flipside of being able to ‘do it yourself’. Without a label or manager, business decisions, from the day-to-day to the strategic, jostle for time with writing and recording. This is the city equivalent of having to grow, tend to and harvest all of one’s vegetables just to be able to eat. It’s having to build the bus before you drive yourself to work.

Looked at as a Smart Cities problem, new solutions present themselves. If a music value chain considered itself 100 per cent transparent, the song roadmap would be available for all to see at the start and end of the road. This could be done through blockchain technology, the notion of a distributed ledger, recording ‘blocks’ of transactions in an immutable ‘chain’.

First conceived to support the digital currency bitcoin, the underlying technology is increasingly being seen as having the potential to disrupt not only financial services but a whole range of sectors from healthcare to the diamond trade – part of the so-called Fourth Industrial Revolution. The potential for transforming the music industries is considerable. If income for each track, and for all parties, was to be recorded on a distributed ledger, for instance, then everyone in New York City could stream music from a LinkNYC machine, and rest assured those behind the content were being paid fairly for their work.

The solution here, however, is not only with the music industry. What if a city declared a goal to declare itself 100 per cent music transparent? Let’s unpack this.

Using blockchain technology within a national server, a file could be tagged with a blockchain marker. Once uploaded, this would trigger an instantaneous recognition of the song’s performance and, consequently, a payment into that artist’s wallet, as determined by a predetermined ‘smart contract’ – or programmable transaction, executed automatically, via the blockchain, when certain conditions are met. If the country or city would prohibit the uploading of songs without the relevant file marker, new songs would be tracked and payments would be deposited and allocated in real time, dramatically simplifying what is often a four or five step process.

The music industry is already doing this, albeit slowly. But cities aren’t along for the ride. We need a LinkNYC for music, or an e-residency for copyright. A number of collection societies – the ‘music police’ that license restaurants, cafes, shops and other establishments to play music while monitoring TV and radio – have invested in blockchain technology, working with global players including IBM on developing new architecture. Meanwhile, Spotify recently acquired the blockchain start-up Mediachain.

The LinkNYC program and the Estonian e-business residency removed barriers, created transparency and opened up their product, or service, to everyone. We can do the same with music. Maybe Tallinn and New York City can be the first ever music transparent cities, where every nanosecond of music that makes all our lives better in the places we live was paid for in real time to the rightful owners of each track. It’s just smart.

Dr. Shain Shapiro is founder & CEO of Sound Diplomacy. Marcus O’Dair is a programme Leader at Middlesex University.

 
 
 
 

A growing number of voters will never own their own home. Why is the government ignoring them?

A lettings agent window. Image: Getty.

The dream of a property-owning democracy continues to define British housing policy. From Right-to-Buy to Help-to-Buy, policies are framed around the model of the ‘first-time buyer’ and her quest for property acquisition. The goal of Philip Hammond’s upcoming budget – hailed as a major “intervention” in the “broken” housing market – is to ensure that “the next generation will have the same opportunities as their parents to own a home.”

These policies are designed for an alternative reality. Over the last two decades, the dream of the property-owning democracy has come completely undone. While government schemes used to churn out more home owners, today it moves in reverse.

Generation Rent’s new report, “Life in the Rental Sector”, suggests that more Britons are living longer in the private rental sector. We predict the number of ‘silver renters’ – pensioners in the private rental sector – will rise to one million by 2035, a three-fold increase from today.

These renters have drifted way beyond the dream of home ownership: only 11 per cent of renters over 65 expect to own a home. Our survey results show that these renters are twice as likely than renters in their 20s to prefer affordable rental tenure over homeownership.

Lowering stamp duty or providing mortgage relief completely miss the point. These are renters – life-long renters – and they want rental relief: guaranteed tenancies, protection from eviction, rent inflation regulation.

The assumption of a British ‘obsession’ with homeownership – which has informed so much housing policy over the years – stands on flimsy ground. Most of the time, it is based on a single survey question: Would you like to rent a home or own a home? It’s a preposterous question, of course, because, well, who wouldn’t like to own a home at a time when the chief economist of the Bank of England has made the case for homes as a ‘better bet’ for retirement than pensions?


Here we arrive at the real toxicity of the property-owning dream. It promotes a vicious cycle: support for first-time buyers increases demand for home ownership, fresh demand raises house prices, house price inflation turns housing into a profitable investment, and investment incentives stoke preferences for home ownership all over again.

The cycle is now, finally, breaking. Not without pain, Britons are waking up to the madness of a housing policy organised around home ownership. And they are demanding reforms that respect renting as a life-time tenure.

At the 1946 Conservative Party conference, Anthony Eden extolled the virtues of a property-owning democracy as a defence against socialist appeal. “The ownership of property is not a crime or a sin,” he said, “but a reward, a right and responsibility that must be shared as equitable as possible among all our citizens.”

The Tories are now sleeping in the bed they have made. Left out to dry, renters are beginning to turn against the Conservative vision. The election numbers tell the story of this left-ward drift of the rental sector: 29 per cent of private renters voted Labour in 2010, 39 in 2015, and 54 in June.

Philip Hammond’s budget – which, despite its radicalism, continues to ignore the welfare of this rental population – is unlikely to reverse this trend. Generation Rent is no longer simply a class in itself — it is becoming a class for itself, as well.

We appear, then, on the verge of a paradigm shift in housing policy. As the demographics of the housing market change, so must its politics. Wednesday’s budget signals that even the Conservatives – the “party of homeownership” – recognise the need for change. But it only goes halfway.

The gains for any political party willing to truly seize the day – to ditch the property-owning dream once and for all, to champion a property-renting one instead – are there for the taking. 

David Adler is a research association at the campaign group Generation Rent.

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