"If you want to start a company in music today and deliver an experience where music reaches fans and artists get paid, you’re almost entrusted to run your own royalty payment systems, run your own rights management systems and clear your rights globally," he states. "For a small start-up that could potentially provide a great content experience, you’re talking about something that’s almost impossible. The missed opportunity of having lots of different types of music experiences is the real cost."
McKenzie-Landell is confident that using blockchain tech is a big part of the solution. Earlier this week, the company -- co-founded with Fred Tibbles (applications lead) and Viktor Tron (architect) -- announced that it had successfully piloted its blockchain network, KORD with partners Warner Music Group, Warner/Chappell Music, BMG and Global Music Rights.
Other participants in the music-focused pilot include Beijing-based consultancy Outdustry, independent publisher Sentric and Phoenix Music International, who all provided product and rights data to JAAK, which were then fed into a private version of its blockchain network KORD.
From there, JAAK was able to identify any conflicts in the rights data, for example royalty splits, enabling rights owners to collaborate and hopefully come to a resolution. The company’s ultimate aim is to help build a comprehensive open source global rights database that can be utilised by both new and existing music services to ensure that artists and creators are fully paid for their works.
Although still early days, the pilot, which launched in September, has been hailed a success by its partner members. "Metadata is the lifeblood of today's music business. From studios to streaming sites, a clearer picture of recordings and copyrights could yield untapped benefits for artists and writers, and JAAK is pushing an exciting frontier," said Sebastian Hentzschel CTO and EVP recorded royalty processing, IT and Systems at BMG, in a statement.
His words were echoed by Steve Clark, EVP global operations at Warner/Chappell Music, who said that while the publisher has invested heavily in its own systems, "we’ve also worked with pioneering partners, such as JAAK, to help us keep at the cutting edge of technology in this area."
"Our focus is on making sure we are actually solving a real commercial problem," says McKenzie-Landell, who likens blockchain transformative potential for the music business to how Visa created a network to process near-instant card payments on a global scale.
"A decentralized blockchain solution allows you to create this shared workspace between every single company in the industry, who can share information without having one organization in the middle who controls it," he explains. "At the moment, the global supply chain is massively fragmented. We’re building the infrastructure, or pipes, on which loads of different types of music experiences can be built."
The large number of rival companies using blockchain tech to achieve the same goal can only be a good thing, says the CEO. Last year, JAAK was chosen by global start-up accelerator Techstars Music for its inaugural music program, receiving $120,000 investment and mentorship form a vast pool of professionals. Techstars Music is supported financially and strategically by a number of major music businesses, including: Bill Silva Entertainment, Concord Music, Harmonix, Silva Artist Management, Q Prime Management, RecoChoku, SONY Music, Warner Music Group and Royalty Exchange
"There are a number of companies trying to solve this [rights] problem, but it’s far better to have ten cracks of the whip, than just one," says McKenzie. "Ultimately, once it’s solved its solved for everybody and what makes blockchain such an incredible technology is that it encourages collaboration."
"We’re not talking about one solution to fit them all. We’re talking about a whole suite of solutions for different parts of the value chain, which ultimately I believe JAAK and KORD can really be a part of."