Web3 and music rights: Our community weighs in
2022 closed with a dynamic debate in the #web3 channel of the Water & Music Discord server about the role of aggregation and traditional IP law in the music NFT landscape.
As we covered in the last issue of Sidechain, several artists spoke out against music NFT aggregators like Ooh La La, Future Tape, and Spinamp in December 2022 for listing NFTs without the artists’ permission. While Web3 technologies have spurred a growing movement towards open, decentralized data, this is theoretically at odds with the more closed, ringfenced approach that traditional music rights holders take to enforcing copyrights online.
At the same time, copyright law is the de facto mechanism by which music creators earn income and are rewarded for the significant amount of time and effort that goes into the creative process. Against this historical backdrop, should we embrace or fight the integration of traditional copyright law into blockchain architecture? How can innovation continue to thrive, while at the same time protecting creative participants in the Web3 music community?
Creating a new digital music ecosystem that fully addresses the complex interplay among copyright law, open data access, and tech innovation is the great challenge facing the current generation of music/Web3 entrepreneurs. At Water & Music, we felt that a clear, accessible synthesis of the various perspectives at play was an important first step in enabling entrepreneurs to build this future in a thoughtful and efficient manner.
With the goal of gathering and clarifying different points of view, BlackDave (@blackdave) and Andrew Botero (@colombo) asked the following three questions to several Water & Music members who are actively engaging with tokenized music assets — including artists, software developers, lawyers, and artist team members:
- Do you think there is a tradeoff between honoring copyright law and pursuing innovation in Web3? Why or why not?
- What do you think are the biggest misconceptions that the Web3 music ecosystem has about copyright law — and/or vice versa?
- How has your personal experience in music and/or Web3 shaped your views on this topic?
You can read each member’s full takeaways below, organized in alphabetical order by last name. There are two common throughlines across our responses:
- There is no need for tech innovation and copyright law to be at odds. Established law serves as guidelines that can help music innovation thrive.
- Even though relevant legal frameworks often arrive on a delayed timeline, technological innovation is not outside the scope of governing law.
Ultimately, we hope that the plurality of perspectives described below, as well as patterns in concurring opinions across the board, help establish a shared frame of reference for artists and developer teams as they build into the future.
Hyug Bin Kwon: “This space is much more human-centered and cultural compared to any other field in crypto“
Hyug Bin Kwon is the founder of Ooh La La, a music NFT aggregator.
Q: Do you think there is a tradeoff between honoring copyright law and pursuing innovation in Web3? Why or why not?
I don’t think there needs to be a tradeoff and there shouldn’t be, but the current design of blockchains is far from addressing the legislation in the real world. While one may argue that “because every contract is cryptographically signed by the sender account owner and verified by thousands of nodes there is no need to trust,” what has been signed can still be debatable. And if we say that executing smart contracts with digital signatures does not authorize global access, immutability, interoperability between smart contracts, and building apps that do not rely on trust, then we would come full circle back to Web2: a permissioned, mutable, controlled by banks and regulators, siloed ecosystems.
It’s possible that regulation could break blockchain technology. It is unclear whether sending money overseas without KYC, looking up someone else’s account information & transaction history or building a marketplace & displaying music NFTs is legal. Especially those functions could be outlawed that allowed previously impossible things and therefore weren’t considered when today’s regulations were made. Automatic execution and signing smart contracts to create music NFTs could be declared against the law because some jurisdictions have no way to stop contracts violating the law. But I believe this would come at a huge cost for progress in the Web3 music space.
I think an ideal way to move forward is proactive regulation by hard-coding specific copyright rules as smart contracts, or creating additional layers in the blockchain protocols on top of what we have now. This way, it can be implemented and audited by regulators themselves as concrete interpretation before things are set in motion. If contracts go against regulations, they simply don’t execute. This might require additional work but it’s the best way I can think of to honor copyrights law while innovating in this space.
Q: What do you think are the biggest misconceptions that the Web3 music ecosystem has about copyright law — and/or vice versa?
The notion that regulators cannot shut down blockchain technology even though it infringes copyright law, because it is decentralized and programs are unstoppable, is not true. Regulators can always shut it down if existing regulation was applied straight as it is now. The state of uncertainty here is similar to those of the Internet itself, and there could be national initiatives to address them — similar to how China, one of the largest crypto markets, declared all crypto transactions illegal financial activities in 2021.
Another thing worth mentioning from a legal and Web3 standpoint is that minting on a public blockchain (versus uploading to a database) requires a digital signature with a timestamp to execute smart contracts. I have not seen a lot of people in the Web3 music space discuss the importance of digital signatures, but it’s the core of smart contract platforms. It’s what enables permissionlessness because all clients saw the signatures of every element involved and agreed upon the world state. Even if someone hijacked your node and attempted to delete the data stored, it does not alter the data because it was replicated massively many times.
Q: How has your personal experience in music and/or Web3 shaped your views on this topic?
Before Ooh La La, I was a co-founder of a validator & blockchain infrastructure provider at DSRV. We used to build many public infrastructures such as wallets, explorers, analytics, network monitoring, and dev tools. And even though public infrastructure makes almost no money (aside from foundation grants), we powered thousands of operators and developers to run distributed networks and build applications.
When I first saw how the fragmentation rate in the space of music NFTs was accelerating, naturally, I thought there was a need to fill in the missing infrastructure pieces beginning with an aggregator to discover music NFTs in one place. My pet theory was that music NFTs will also see a Web3 media stack being built as a set of composable lego blocks for this space to take off.
Over time I realized that this space is much more human-centered and cultural compared to any other field in crypto, such as PFP, P2E, or fungible tokens. Artists are putting their names and life works on the blockchain, so we have to see it through a different lens. Currently, we are rethinking our design and strategy to overcome the limitations of the blockchain to meet the needs and priorities of artists in this space.
Vérité: “Web3 builders need to understand the industries they’re trying to disrupt”
Vérité is an independent artist.
Q: Do you think there is a tradeoff between honoring copyright law and pursuing innovation in Web3? Why or why not?
No. Any quality innovation is going to consider all external factors and realities as they innovate and push boundaries. Innovation that doesn’t consider the reality of the business they are attempting to disrupt isn’t actually creating meaningful, lasting change.
Q: What do you think are the biggest misconceptions that the Web3 music ecosystem has about copyright law — and/or vice versa?
There seems to be a sense that the real-world IP protections don’t apply to Web3. I think there’s a feeling that Web2 and Web3 exist in these totally separate realms of existence, when they’re both just technologies and tooling that exist under the same governing umbrellas.
I think artists and industries stepping into Web3 need to accept that it’s a bit of the wild west where everyone is going to try anything, but I also think that Web3 builders need to understand the industries they’re trying to disrupt, the long-term implications of the precedents they’re trying to set and where their innovation rubs against existing precedents.
Q: How has your personal experience in music and/or Web3 shaped your views on this topic?
I’ve been a full-time artist for the last eight years, and have been experimenting with Web3 tooling since the end of 2020.
Dan Fowler: “The whole point of this thing is to build a better world for artists”
Dan Fowler leads open-source projects at Hifi Labs, particularly the neume project to index all Web3 music activity. He previously wrote for Water & Music about music NFT metadata standards and the case for a post-royalties music industry.
Q: Do you think there is a tradeoff between honoring copyright law and pursuing innovation in Web3? Why or why not?
The framing of there being friction between “Web3” and copyright laws is somewhat missing the point in my opinion. The law is the law and it provides guide-rails around which we can build. It is also very clear (and so claims like we’ve heard that there isn’t sufficient guidance are lacking integrity).
It is true that a lot of Silicon Valley-led innovation over the past decade has been quickest to market and scale where there has been a flagrant disregard for laws (e.g Uber). But the whole point of this thing is to build a better world for artists, and that isn’t going to come about by driving a truck through copyright protection.
So no, I don’t think there is specifically a tradeoff, but I do think that builders are acting foolishly by not understanding the environment in which they are building.
For clarity, anyone that is building something that will need a license at some point is, I would argue, sustaining the current status quo of market balance. As long as that is understood, and intentional, then there is of course a lot of interesting things that can be done around NFT experiences.
My personal interest is more in looking for an alternative approach, due to a belief that the current system is underserving the emerging generation of creators (as detailed in my post-royalties essay). This is not a case of ignoring copyright, but building an alternative for artists that want to engage in it. The beauty of crypto is that it can provide a choice for users, rather than the default system that we all currently engage in.
This is also not an either/or situation. Streaming is, and will continue to be, the primary environment for discovery. Where I get excited is in the types of productive assets that artists can create with their fans and collectors, alternative models of funding marketing and distribution, and, new models of artist-owned companies — ultimately a direction of disruption towards the practice of selling rights to a third party in return for services.
Q: What do you think are the biggest misconceptions that the Web3 music ecosystem has about copyright law — and/or vice versa?
Over the past 12 months we’ve seen an interesting whiplash from a position where The Narrative was extolling the virtues of creative commons licenses to a sudden realization that control is important. As ever, the debate has lacked nuance on both sides.
I think that what we’re seeing right now is a growing understanding of just how hard it is to innovate in the music industry. I’ve long said that this is the single greatest thing holding us all back.
But it’s hard because there’s no slam-dunk answer on how to change the status quo. Copyright is important and serves a vital role. Equally, it is extremely difficult to build with, in the traditional sense of developing a startup to find product-market fit.
So, I think that the biggest misconception is that copyright is some kind of beast to slay, and that Web3 is the sword in which to do it. A more nuanced position is that copyright exists for a reason, it’s our challenge to create an alternative that works better for the subset of artists that are underserved by it, and that the likely final state is a range of options for artists to engage in, depending on their need.
Q: How has your personal experience in music and/or Web3 shaped your views on this topic?
Working across the startup and incumbent divide over the past seven years as this industry has been developing has provided insight from a range of positions.
I’ve worked with rightsholders to try and engage with the earliest blockchain and music innovators, worked with one of those innovators to build a decentralized rights network, worked with a copyright and licensing hub to try and increase the opportunity for innovation, and am now working to push the boundaries on how artists can build deeper connections with their fans.
Throughout this time there has been a growing and evolving narrative about what blockchain can provide to the creative industries and what new things can be built.
In the early days our focus was predominantly on supply chain disruption, creating a new model that enabled copyright systems. In the time since, innovation has been more pointed towards simpler models of artist empowerment, analogous to developments in the “creator economy.”
It’s natural to think that further waves of development will bridge across these two distinct directions, though time will tell as to whether that is the focus of the next wave, further down the line, or something that never happens as crypto music has forged a parallel industry.
Jonathan Larr: “Lawyers should have a vision for where the law can and should be improved”
Jonathan Larr is an entertainment attorney at Icarus Law and teaches about the music business at UCLA. He is the project lead for our music NFT contract template.
Q: Do you think there is a tradeoff between honoring copyright law and pursuing innovation in Web3? Why or why not?
I don’t think the tension is between following the law and pursuing innovation but rather between following the law and the speed and extent of innovation. I sympathize with founders who feel that the law is holding them back, because by design it is. The law intentionally moves slowly. It’s much easier and less expensive not to screw something up in the beginning than to try and unscrew something up later.
This assumes, of course, that whatever the founder is trying to do is legal. If they are trying to build a company on something nebulous or clearly illegal, no amount of legal consultation will fix that. I think some founders feel like they can outrun the law or they can just ignore it. This might work for a while but in the end it will catch up to them.
Q: What do you think are the biggest misconceptions that the Web3 music ecosystem has about copyright law — and/or vice versa?
I think the biggest misconception that some people in Web3 have is thinking that they don’t need to learn how copyright works. I understand that it’s complicated and a founder is pulled in a million different directions. However, when it’s something like the law where doing it wrong can sink a whole company, it should be of the utmost importance.
I think that copyright lawyers can have a misconception that the law is the way it is and there’s nothing that should be changed. I think lawyers should have a vision for where the law can and should be improved, and should work towards making those systemic changes.
Q: How has your personal experience in music and/or Web3 shaped your views on this topic?
I have primarily represented artists, so I will always come from that point of view. I am mostly interested in the Web3 space because it represents a new revenue stream for musicians. I think artists can and have been hurt when founders don’t respect copyrights. I think founders need to remember that none of this exists without musicians. Treating them properly should be more important than anything.
Anthony Volodkin: “It’s worth continuously reevaluating who the existing systems benefit“
Anthony Volodkin is the founder of Future Tape, a music NFT aggregator.
Q: Do you think there is a tradeoff between honoring copyright law and pursuing innovation in Web3? Why or why not?
I don’t think it needs to be a tradeoff. Web3 offers an opportunity to reconsider how we value certain established rights, and possibly create new rights altogether. For instance, it’s difficult within the existing rights framework for the creator to profit from an image that is otherwise freely shared across various services like Instagram (the uploader typically grants a non-exclusive royalty-free license to the service), but NFTs offer a new pathway for capturing value beyond professional stock image-style uses.
That said, applying strict interpretation of copyright law to Web3 experiments is unlikely to get us anywhere interesting.
Q: What do you think are the biggest misconceptions that the Web3 music ecosystem has about copyright law — and/or vice versa?
From the Web3 side, everyone would benefit from learning more about existing copyright law. Understanding the history of, say, composer and songwriter rights, and simultaneously some parts of legislation like the US DMCA (for ex, section 512 focused on service providers), or notable court cases in the space (for ex. UMG v. Veoh), can really help think about how Web2 services were built and what’s possible. It’s a huge subject.
From the traditional industry side, I think it’s worth continuously reevaluating who the existing systems benefit, whether they provide value for a large percentage of the rights-owners involved (vs. a small top percentage), and whether there are alternative approaches that can benefit artists outside of the established systems. For instance, consider the value of transparency in fairly rewarding the work of everyone involved in creating a piece of music provided by blockchain approaches like 0xSplits, vs. the usual opaque approach to this important matter.
An informed, skeptical view of power for 2023.
Q: How has your personal experience in music and/or Web3 shaped your views on this topic?
I grew up during the peak of the CD era, the emergence of Napster (~1999-2002), and digital music more broadly — a moment when tech challenged the music industry’s overwhelming control of distribution — so these topics are of constant interest. During my work on Hype Machine, I witnessed the positive results of innovative, often-restricted uses of music (for ex, remix culture that grew during 2005-2010 with Girl Talk, and others, like The Chainsmokers, finding commercial success by remixing tracks by other artists, marketing by sending everyone mp3s to share, etc). Seeing and learning about the space during this time has made me question whether the existing copyright systems best serve the dynamic nature of creativity.
BlackDave: “Innovation requires a bit of flexibility and struggle with the existing structures”
BlackDave is an independent artist and the main writer/curator of the Sidechain newsletter.
Q: Do you think there is a tradeoff between honoring copyright law and pursuing innovation in Web3? Why or why not?
I think innovation requires a bit of flexibility and struggle with the existing structures. I think that sometimes if you play too closely to the rules, the innovation you come up with is so marginally incremental that it makes no difference. On the other side of this, I believe that we need to create some sort of scenario where the innovators aren’t given too much freedom with what they do. The largest innovation will come from tearing it down and rebuilding it, but the risk may be too large for the perceived reward for many.
Q: What do you think are the biggest misconceptions that the Web3 music ecosystem has about copyright law — and/or vice versa?
There’s a legal framework vs. cultural framework mismatch that I think is happening. I think the truth of this topic is that we’re living somewhere in the middle, while trying to use new technology to create potential new legal frameworks…where the law is the law, but the culture moves in a certain way without regard to it.
Understanding that NFTs don’t give anyone the right to make money from the token itself is important for building innovators to understand, and it’s important for creatives to understand that on the culture that Web3 and NFTs have been built upon is that the media is publicly accessible and the ownership is the unique/private part of it. I also think people are acting like it’s easy to topple the existing system just because a small percentage of music artists will be able to leverage NFTs in a way that sustains their lives.
Q: How has your personal experience in music and/or Web3 shaped your views on this topic?
I’m a Web3-native music artist, whose base is largely built through the Web3 ecosystem and NFT sales. I work full-time as a creative, primarily working in Web3, whether through the sales of my own work, participating on teams of projects, or other related work. I’ve been using Web3 since the end of 2020.
Colombo: “I see builders using innovation as a get-out-of-jail-free card … The law is the law”
Andres Botero (a.k.a. Colombo) is a music producer and artist manager (KASBEEL), actively working on the articulation of Web3 innovation technology, intellectual property, and artist development. He previously wrote for Water & Music about on-chain splits protocols, and served as a core contributor to Season 1, Season 1.5 and Spanish translations of W&M’s Web3 research.
Q: Do you think there is a tradeoff between honoring copyright law and pursuing innovation in Web3? Why or why not?
I don’t think there should be. Technological innovation is creative at its core, and multiple visions and integration of systems should be possible and incentivized.
I personally think that copyright enforcement has come a long way as far as efficiency, and I also feel that there are thoughtful and positive efforts trying to correct mistakes from the past so as to not repeat them. What can be done better? Transparency. As I see it, copyright law serves the creator, but the problem lies in the distribution of remuneration that comes from the enforcement of copyright law through collective management. Technology should therefore improve the relationship between authors and the organizations administering their rights.
The opportunity that lies ahead via tech innovation is for transparency and the use of open data in specific cases like nonprofit collective management organizations that are authorized by governments and theoretically run by and for creators. Systems that transcend collective rights management and empower individual admin of rights can also be part of the future disruption.
Q: What do you think are the biggest misconceptions that the Web3 music ecosystem has about copyright law — and/or vice versa?
My biggest concern right now is that I see builders using innovation as a get-out-of-jail-free card, which it is not. The law is the law.
It’s worrisome to me to see a lack of awareness of the consequences of disregarding the law because it will come knocking at your door. We have seen in the past how the copyright industries have patiently waited for innovation and tech to be knee-deep in the beat, to then show their cards and come collecting. I would hate to see the global network run into unnecessary friction led by wishful thoughts about law not applying to innovation.
Q: How has your personal experience in music and/or Web3 shaped your views on this topic?
Even though I have been a “victim” of bad royalty-based deals and a lack of organization of my catalog, it has been royalties earned from music that I have written and produced that have given me a steady income throughout the years. This reality made me understand the real value of copyright and royalties for the livelihood of musicians.
I feel that the Web3 value proposition of provenance is very similar to the intended value of copyright. Automated processes do free up mental space that can be put to better use in that sense. If we could use an on-chain digital asset registry to secure long-term revenue streams for creators, then I think we could help the development of a more productive creative industry.
Jesse Grushack: “There’s only a tradeoff if you go through the same channels and follow the traditional path”
Jesse Grushack is a partner at Six, an agency and investment firm focused on co-creating decentralized creator communities.
Q: Do you think there is a tradeoff between honoring copyright law and pursuing innovation in Web3? Why or why not?
There’s only a tradeoff if you go through the same channels and follow the traditional path. At the end of the day, unless we decide as a collective that we are moving into a post copyright world and we don’t actually care about who plays the music or what happens to it (i.e It finds its way into aggregators), then copyright doesn’t matter. That being said, the very basic concept of copyright is pretty flexible — i.e. just registering your music with the Library of Congress. Then there is not really much of a tradeoff with copyright law and innovation.
Q: What do you think are the biggest misconceptions that the Web3 music ecosystem has about copyright law — and/or vice versa?
Most people have no idea how music copyright or licensing even works even in the industry, and these are people who deal with this every day. I’ve asked publishers questions only to be bounced around between people because so-and-so “doesn’t really deal with that.”
All that being said, there is a pretty massive opportunity to help shift copyright, define new types of licenses, and innovate in the space. If we all work together, we can start to define new models that protect artists and put them in control of what happens to their music. If we ignore it? Well. We’re going to end up exactly where we started.
Q: How has your personal experience in music and/or Web3 shaped your views on this topic?
I have been involved in music/Web3 for eight years professionally, and spent time in the music industry for a couple of years before that. In 2015, we released a demo where you could purchase Imogen Heap’s track “Tiny Human” for 1ETH (~$0.50 at the time). The purchase automatically split the payments between Imogen and all of her contributors. We thought we had the winning product and we would change music, but throughout 2016, I got completely schooled in how music and copyright works. I spent months inside ASCAP, SESAC, labels, publishers — trying to find a way to make this technology improve the flow of royalties to help musicians get paid quicker.