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Blockchain and a ‘Disastrous’ Music Biz Addressed at BIME Pro 2015 Conference in Spain

Blockchain, breakage and the "disastrous business" of music were discussed at the Bizkaia International Music Experience (BIME) late last week in Bilbao, Spain.

For the third time the Bizkaia International Music Experience (BIME) took place in Bilbao’s Exhibition Center (BEC). From October 28-30 industry professionals discussed the present and the future of a “disastrous business,” as Scott Cohen, founder and VP of The Orchard, described it, not being entirely serious. According to him, the fact that one never knew what was going to happen next, was what kept it exciting.

Cohen was joined on stage at this year’s BIME Pro — the conference part of the event — by Alex White (The Next Big Sound), Ruth Barlow (Beggars Group UK), Denis Ladegaillerie (Belive Digital) and Jeremy Silver (Media Clarity). Most panelists agreed that a sea change was taking place regarding the powers that be, even though Cohen pointed out that the most successful songs today are still almost exclusively major repertoire. Barlow insisted, however, that the majors’ influence was shrinking “because their business model isn’t sustainable,” referring, amongst other things, to a lack of long-term vision.


Ladegaillerie added that what had protected the majors thus far was the fact that it had been very difficult for independents to establish a supply network around the world. In the digital age, that disadvantage vanished. “10 years ago there were six majors. Now there are three,” said Silver, who doubted that this trend was going to go into reverse.

The discussion took a slightly “dystopian” (Barlow) turn, when the panelists drew up a future where humans would become chip-implanted cyborgs and algorithms would decide every aspect of music consumption. However, when asked if they thought that in ten years time the business would have evolved for the better or the worse, almost everybody answered with “better.” Only Barlow mused that it would probably get better in the next five years only to take a turn for the worse in the next 10.

A day before, Cohen sat on a panel with Merlin CEO Charles Caldas. Both men shared their thoughts on various buzz topics of 2015, such as freemium vs. premium, transparency and breakage. Caldas pointed out that one had to discern between the different forms of free. While there were forms that “took consumers up the music value chain” there were others that contributed nothing in that regard. He pointed out the absurdity of the largest music service in the world paying out the least in royalties to rights holders, and that services relying on user-generated content, protected by safe harbor regulations, rob artists of their freedom of choice, because they can no longer decide what to make publicly available and what not.

Caldas also explained the concept of breakage and how it represented lost value, because in many cases it was never allocated to the artists. Advances in general made it hard for streaming services to reach profitability — a practice that would only hurt the industry as a whole. “We should be focusing our business much more around consumers and less around right-holders”, Cohen said, citing the games sector as exemplary for an industry that has mastered this approach. In the streaming age, where every user has their own account, the options of catering directly to the consumer become endless. Both men welcomed more legitimate services entering the game, but weren’t mightily impressed with Apple’s and YouTube’s recent efforts. They pointed out that the music industry was doing well in terms of adapting to digital change, but that revolutions like the one currently taking place always took a long time. 

Merlin CEO Charles Caldas on a Two-Tier Statutory Rate: Op-Ed

Part of this revolution will most likely be “the blockchain.” Pledge Music founder Benji Rogers had organized a panel around this topic and was joined on stage by Cliff Fluet (Lewis Silkin LLP) and Allen Bargfrede (Berklee College of Music), all three agreeing that blockchain is one of the most exciting technologies ever, especially for the music business, as it could solve all of its main issues: the formation of a central rights database, slow payments, intermediaries that took arbitrary cuts, lengthy license negotiations and the lack of transparency.

The latter is addressed in the Berklee College’s Rethink Music report, for which the authors received “significant negative feedback,” as Bargfrede stated. It went as far as threats by certain companies, who proclaimed they wouldn’t accept Berklee students as interns anymore. After all, the “lack of transparency is very profitable for the music industry”, he said, referring to breakage and advances that couldn’t be allocated to individual artists and therefore often times just disappeared. “Not everyone should see everything, but artists should at least be able to understand their revenue streams. Everybody could benefit from this technology, also labels, publishers and PROs.”

What a Mess: New Report From Berklee College of Music Looks to Fix an Aging, Fractured Business

“The opportunity the industry is missing is the heartbreaking part of this”, said Fluet. According to him, “what thebBlockchain does to money alone is seismic. And that’s not even talking about content.” The way banks reacted to it reminded him of the way the music industry had reacted to the advent of the MP3. “I’m looking forward to this technology disrupting the business of lawyers,” said Fluet, a lawyer himself, referring to smart contracts which are a vital part of the blockchain revolution. 

The panel was scarcely visited though, either because it was the first panel that morning or because the industry doesn’t yet realize the Blockchain’s potential. And the industry was certainly in attendance: BIME’s project manager Christophe Cassan told Billboard that the number of delegates grew to 1,800 from 1,500 in 2014. 145 speakers from 18 different countries shaped this year’s conference program. 28 bands were selected to play showcases in Bilbao’s old town, up from 22 in 2014. 

How ‘the Blockchain’ Could Actually Change the Music Industry

Following the conference was BIME Live from October 30-31. While the number of bands decreased from 42 to 28, attendance figures increased from 21,000 to 22,000. While Chrystal Fighters headlined BIME Live on the Friday, Imagine Dragon played the top slot on the Saturday.

Speaking of live: for the second time the Spanish festival congress Congreso de Festivales de Musica was part of BIME Pro. More than 100 festivals took part which made Cassan especially happy: “All the agents told us they met every client they wanted to here,” he told Billboard.