This doesn’t really answer the question - I mean from a process perspective how does it work.
Like I write a song that has 10 different owners - is the idea then that I purchase rights via purchase of an NFT? Because that will need a lawyer-y real world contract attached to it anyway, so I’m not sure what it’s replacing. And how does that NFT determine the cost of rights, which will be different if I am using it as the theme song for my movie compared to a tiny sample in a song?
I understand the complexities from that post, I just don’t understand how NFTs and smart contracts are the solution to the complexity.
The first step is for RIAA to adopt a centralized database/block chain. This would be similar to how HomeDepot uses IBMs prop blockchain to handle their inventory. I will use DB, for short.
The DB would allow current, and previous, copywriter holders to opt-in to the system. Ownership stake would be written into the smart contract with trenches of rights. Once you have a "movie" contract, that attributes X percent to Y people, based on rights, the contract can be easily reused for another project.
In most cases, music royalties are a fixed income business and the profits are easy to model. This was the foundation of the WB/Pershing Sq deal. Their prospectus is quite interesting.
Using the WB case for simplicity, the idea would be to take the current licenses and create trenches of rights, which would be sold/minted (not sure of right work) with all the legal/operational stuff baked in. For a real world example:
- WB owns the rights to song X
- DMX (hospitality) licenses music from WB to play on their connected devices, which service the hospitality sector, primarily (restaurants/bars)
- DMX renews their license on annual basis.
- Copy write owners would receive royalties per non-exclusive, commercial, non-reproducible trench when their song is played.
With NFTs, the initial licensing and renewal could be performed from a user interface similar to Amazon vs the current paper process.
This is applicable to chains like Starbucks too, as they license songs, burn them on CDs that have specific DRM and play on a (what I would guess) is a specialized CD player. Those CDs cannot be played outside the store, from my understanding.
TL;DR - you encode different licenses in smart contracts and once you have a framework, it’s easy to grant similar rights without the overhead. Specialized licenses can be created quicker. This would be applicable to large copywrite holders and flow down to indie, with time.
Why couldn’t this just be done with a centralised online portal?
Seems there would be lots of issues on the artist side of things with NFTs - like what if one of the 10 artists that are part of a song doesn’t want to sign up or get paid in crypto? Do you still get the NFT and handle the 1 person manually and sit half in NFT world and half outside? Or do you need 100% adoption before it is at all useful?
What if the music company wanted to vet who they licenced music to? Or particular songs can only be licenced for particular use cases by particular companies?
I’m not sure NFTs actually solve the complexities here.
Why would crypto be involved? You are using the blockchain and smart contracts. The token aspect does not need to be included or can be abstracted away into internal reserve where tokens == $1. Artists paid in $ or w/e fiat currency.
The idea is to encapsulate the current contracts into smart contracts to downsize legal overhead.
Also, not sure why it HAS to be decentralized.
Look at IBMs implementation of HomeDepot’s inventory tracking. There is no decentralization (in a general sense), no tokens. They created a system that was easy to onboard vendors, vendors can process orders, and Home Depot can verify them with a lot less paper work and a trail.
Smart Contracts will not look how the space looks now and the ethos of crypto won’t survive most real-world use cases but some technologies will be adapted, if they fit well.
Like I write a song that has 10 different owners - is the idea then that I purchase rights via purchase of an NFT? Because that will need a lawyer-y real world contract attached to it anyway, so I’m not sure what it’s replacing. And how does that NFT determine the cost of rights, which will be different if I am using it as the theme song for my movie compared to a tiny sample in a song?
I understand the complexities from that post, I just don’t understand how NFTs and smart contracts are the solution to the complexity.