The Dilemma: how to cooperate for the benefit of the Music Industry

Last Tuesday, February 1, the Verifi Rights Data Alliance (VRDA) was announced, the project led by Verify Media for the creation of a data exchange system for music rights ownership between different agents in the digital value chain. The alliance’s inaugural members are a rights holder (Warner Music Group), an independent copyright management operator (UNISON), a digital distributor (FUGA) and a music streaming platform (DEEZER). It is a pioneering metadata management project, which can contribute significantly  to a paradigm shift for the music industry and its future development for the benefit of creators. But, as we will see, not all companies and organizations in the value chain have always been predisposed to this type of initiative; history shows us that rather the opposite. And we believe that it is worth analyzing why and the reasons that we believe strongly justify a change of attitude and approach for the benefit of the entire industry and especially of rights holders, creators. 

To illustrate this idea, we find it useful to turn to the prisoner’s dilemma, perhaps the best-known game theory problem. We could summarize it in the dilemma that individuals or organizations face when making complex decisions in times of uncertainty, conflict or pressure; and the interactions of our decisions with those made by other individuals or organizations. The prisoner’s dilemma highlights the paradox that we often face -in our daily or professional life- believing that, by making decisions that obey selfish or individual interests, we will achieve better results. However, we do not take into account that, by abandoning individualistic positions and introducing cooperation in decision-making, we can achieve more optimal and efficient results, jointly or in the long term. 

This line of thinking is applicable to the music industry. An example of this would be the attempt promoted in 2008 by the European Commission to create the Global Repertoire Database (“GRD”). This initiative had the ambition to create a global database of authoritative, comprehensive and multi-territorial information on the ownership and control of the global repertoire of musical works, with the participation and contribution of authors, publishers, collecting societies, associations of copyright holders rights, DSPs, managers, artists, record labels, public authorities and service providers. After 7 years of work and a debt of 14 million euros, the project failed, allegedly  due to the individual interests of some of the players and due to the internal struggle for control of the database. This example illustrates the dilemma: various actors decide not to cooperate, even if it goes against the common interest. 

In the music industry, where rights management plays a central role, there is a structural, endemic and permanent problem that many complain about but that no one manages to solve definitively: the lack of efficiency and transparency in the management of rights and royalties that do not reach the legitimate rights holders. On the other hand, we have already commented on the colossal technological and information management challenge that the music industry is facing, with data volume growth rates greater than those of the market itself (20-30% vs. 5-10%). At UNISON, we believe that the solution to these problems will not come as a result of an individual or particular interest, but of a collective or consortium effort of individuals and organizations. That is why we have been working with Verify Media in this direction for years, on a project whose first steps were announced this week. 

The value proposal consists of having the technological mechanisms and solutions so that the necessary ownership data of a given musical work can be shared (obviously, respecting confidentiality and data protection legislation) among the different organizations in the value chain in the exploitation of copyrights. A sort of decentralized and distributed database that allows data to be shared in a transparent, efficient and secure way. The objective: to radically reduce data friction and, with it, the collection and payment times to rights holders, as well as the proportion of money that remains undistributed or is distributed erroneously, because the rightful owner of those rights is not known at a given moment in time. 

UNISON has decided to participate in VRDA since we believe that this initiative, based on Blockchain technology, can contribute to the solution of this problem, which involves taking a decided step forward beyond the individual good. That is to say: the solution can only go through coordination and cooperation between organizations or consortiums that contribute in a committed and determined way to try to solve a common problem, which seriously affects the creative sector.