Business

Using Blockchain, Russian Music Orgs Creating Single Database for Intellectual Property

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Collecting societies are teaming up with innovation agencies in Russia to create an intellectual property platform based on blockchain technology. Music publishers, such as Warner, are reportedly interested in joining it.

Named IPChain, the platform is being developed by the government-sponsored innovation fund Skolkovo in collaboration with collecting societies RAO, RSP and VOIS and several research institutions.

"Today, just working transparently and efficiently isn't enough [for a collecting society]," Andrei Krichevesky, general director of collecting society VOIS, told Billboard. "Collecting societies need to be more than just intermediaries between rights holders and users, they need to become unified digital platforms providing the entire range of services related to authors' and neighboring rights."

According to Krichevsky, IPChain is a versatile instrument for creating a new market-oriented business model in the field of intellectual property. "This project is expected to become a driver for the industry's development and an instrument for players that want development, growth and -- in a good sense -- expansion to international intellectual property markets," he concluded.

"The prototype for IPChain is expected to be ready by September, then it will be tested to be launched early next year," Maxim Proksh, an intellectual property advisor to Skolkovo chairman of the board, told Billboard.

At the initial stage, it will incorporate rights data bases for music and audiovisual content and records, maintained by state-accredited collecting societies -- RAO (authors’ rights collecting society), VOIS (neighboring rights collecting society), and RSP, which collects a one-percent tax on imports of electronic devices that can be used for copying content.

In the future, IPChain could change the existing intellectual property system in Russia, becoming a basis for the creation of online exchanges for intellectual property, as the blockchain technology allows tracking copyrighted items and registering deals with them.

Some local labels have reportedly expressed interest in adding their catalogues to IPChain.

Alexander Blinov, head of Warner Music Russia was quoted by business daily Vedomosti as saying that IPChain is an interesting project for the music publishing sector.

Meanwhile, the project is being launched at a time when the Russian collecting industry is coming out a difficult period. Last year's controversy around RAO, whose former general director Sergei Fedotov was arrested on embezzlement charges, sent a shock wave across the entire sector.

However, as RAO's new management is trying to shed the org's reputation for lack of transparency, other players are also aiming at more efficient and transparent operation.