Interview with Phil Barry of Ujo at DEVCON1 in London

Transcript

so right now I met Phil who is the founder at Joe music I found her music yeah there's been about five of us focused mainly on this project okay so we got a founder you're one of the founders at you Joe music first can we have an introduction from you yes so I started out the music industry almost exactly ten years ago so in the whole time I've been involved in music it has been a period of extreme disruption digital transformation from the iTunes and MySpace all the way through to streaming now I started out working in record companies and then I had a career as an artist for several years before

starting my own independent record company and basically over that time I had achieved lots of things that I wanted to do in music from a creative perspective and you know in terms of the kind of concerts that I was playing that being on TV all of these kind of things but it was amazing how little money it was possible to make doing all of these things and so I started to refocus on what the problems were in the music industry and how they might be might be fixed and so I spent a long time thinking about this I worked with Radiohead and Thom Yorke with Thom Yorke on a project called tomorrow's modern boxes which was the first record commercially released through BitTorrent

and then subsequently on really strategies for the new Radiohead album coming up next year then after all that I heard a crack block chain and we've been working on this specific project lujo since a spring of this year so what does what is what does your music hope to accomplish well it is fundamentally shared infrastructure for creative industries built on the theorem blockchain by which I mean that it is essentially the pipes the fundamental pipes through which royalties licenses rights can flow and then the idea is that this core infrastructure can be used to support any application

your service that wishes to use music and this solves a number of problems to do with incomplete and conflicting information because we can have a single decentralized database to which everyone contributes and everyone ever needs information we can reduce the number of intermediate intermediaries quite radically between artists and their audience by using smart contracts to automate the way that licenses licenses are done and we can just generally just give more freedom more access to artists to have control of their careers and keep more of the value that is generated by their work now in order to understand why what you're doing is valuable

perhaps we need to go into what is the current state by which you know royalties or funds flow in the music industry could you give an example assuming assuming that you are the content creator of a song what what what is your current experience like and who are the intermediaries between you and the final listener so we think in terms of a song because the music we have songs and recordings and they're totally separate that's one of the many complexities if you think just if you're a songwriter and your song is gonna get played on the radio in a country outside of your home country daresay it's Japan so then an organization in Japan is going to collect the royalties the local performing rights organization that

maybe they have a deal with one of the American so you're an American songwriters when the American forming rights organizations and then your publisher will have a deal with one of those and then you have a deal with the publisher in each of those cases they take a different percentage and performing write societies it's normally in the region of sort of it's an average of about 13 percent and a publisher is a bit different because it's not purely just taking money and passing it on it's sort of theoretically at least adds value to your career but you can have use at least three intermediaries just in that very simple example not including the recording in the performer and the fact that you have multiple songwriters in different countries none of these things but that sort of net outcome is that of the sort of hundred

dollars that you your meat work generates between fifty and sixty percent of it ends up coming to you after two or three years after the event so it's quite a substantial what cost both in time and you know and dollars that goes bad for this process why did it dig two or three years I think a lot of the processes are not particular ficient and they are you know they're not automated and some of them aren't even digital most there are there's a lot of there's some some of any stones are just a standard reporting period of a you know of a quarter by the time each person has accounted a quarter after the next person you know it starts to turn into years there's a lot of

complications with reconciling uses of music with the people that need to be paid this is sort of the fundamental thing that all these organizations are doing and that's where having incomplete data or having conflicting data or having data as if though they'll only in some database that I don't have access to you know there's a lot of working out that needs to go between knowing that this song has been paid and identifying who's who has got to be paid for it and that's what we hope to be able to automate essentially so in theory you're saying that if if I'm a songwriter and let's say my song is popular in 15 different countries or locations then in each country I might have three

intermediaries between me and the listener and then there are 15 of these markets so the number of intermediaries in total for my song might be 40 or 45 yeah this is absolutely possible because every country has a an organization that is responsible this kind of collection and they have reciprocal arrangements and things they work together to some extent but just fundamentally you have this sister you have a system of really quite distinct markets you know some countries have more than one right society and they're just collecting the braudys Belgium all the royalties are sweet and all the royalties for the Netherlands and so it is extremely complex when you think

about the whole world I think about 150 countries worth of of these institutions it's it's really extreme and it's especially extreme when you think that I can send emails to people in any country in the world directly I can send money to people anywhere in the world directly not even using Bitcoin a cryptocurrency but even using PayPal or some some existing technology so these kind of principles of just like an online digital marketplace also apply in music rights but they don't really just know ok so now let's say let's stop war how you're going to reform this system using smart contracts and your first prototype what does it exactly do so the prototype so the single song test case it's based

on a stand by Imogen Heap called tiny human and basically it demonstrates how you can start by recording information in this decentralized database blockchain but database which says who owns what under what terms music can be used and who needs to be paid when the music is used and so first of all you have a permanent definitive and single you know database of this information that is written into the smart contracts such that when you use the music when a payment payment comes in the right people get paid you know so there's a policy attached to a stream when music gets streamed you know we know what

needs to happen when a stream takes place the right to give to broadcast a stream goes one way and the money goes to the relevant people in the in the other direction and because on blockchain it's transparent so you can see on our prototype you can go and see that image and had a policy for downloads in which she has X percent of the income because she wrote the song and it's the record company and everything else and then you as a participant in that in that work can confer oh the thread all the way through so that you can look at the what we call in our prototype distributions and see that you were paid what you in paid so it's transparent you can trust it and by having this mr. the whole point decentralized trust system Bob chain

you don't need intermediaries to do it for you so so in this case imagine as the as the content creator uploads a file at maybe a simple location and goes to each idiom creates a smart contract feeds in the information about who should be paid what and what what kind of rights a user can buy puts that in the smart contract now a user when he wants to either listen to the recording or wants to broadcast that recording can check out what the different prices for all of these schemes yeah select one of them transfer money to the smart contract and get the file yeah and then this smart contract takes that money figures out who should be paid how much

you're automatically routes their this to their etherium accounts yeah that's exactly it and I can't really expand on it it's very well described yeah thank you so that seems to be honest that seems like a really really great system because you know you it's a global system and it's completely completely transparent but kind of I have have two to two fundamental questions about the first is this is not supposed to combat the problem of piracy right it is supposed to be a system which people who are actually willing to pay the artists can

use to pay the artists well it doesn't come back piracy in the sense that it's not a kind of strict DRM system it's not really to envisage as that but if you create a permanent link between the content and the terms of use associated with the content and the people in to be paid from the content through by using a hash of the content you know stored in the blockchain then it makes it much easier to know whenever your content is used what the terms are the go with that content the two things are linked together and beyond that if we imagine a sort of totally automated future then it also possible for audio recognition fingerprint software to pick up that

song is used and trigger something in the smart contract that makes something happen and it's also worth bearing in mind that this platform is not just sort of facing individuals or maybe it's rarely facing individuals but it's sort of things like big blanket licenses for radio broadcast around the world or for streaming and all these kinds of things so it's not necessarily addressing the question of piracy on a sort of the scale of an individual it's not really its focus and since etherium is a very niche token that very few people use how will you bring how will you bring this technology to all these people in the

world that are using dollars there are still in the world of dollars and pounds and whatnot yeah that's a good question and I think people gen generally you see around this conference have differing views on it some people just believe that cryptocurrency is the future and we should commit fully to it and expect everybody to adopt it my view is that if technology like this is going to be adopted widely then it's got to be easy for people to use it and we should not put any barrier into the way in the way of people using it and so we're gonna have to find ways of you know invisible conversion of these these tokens such that the ether is used in the oil in the machine but but the artists don't

necessarily need to have hold either for any substantial amount of time these are sort of questions that I guess do we as a community are having to to answer and there are lots of different ideas being put forward more generally about adoption I think people adopt it if it is easy to use and if they get value from using it and so that applies not just in the case of the currency aspect but just in terms of the whole system in the whole system has to add value to people's careers how to make more money from it or find more customers through it or whatever it is and if that is proven to be the case for the first users of this platform then more users will join it and and there's obviously a switching cost

with any new technology but basically the benefits have to outweigh the switching cost that's the fundamental challenge now the advantage to the artist in this case is pretty clear that they get a they get a higher share of the of the revenues of the content content they create what what what is the advantage to the listener when they has compared to any other service like a streaming service like Spotify or happy music or whatever well I think that we are probably not going to presume to be experts at the experience side of it to be left up to other people who develop their own applications and services based on the core functionality of you

Joe so a future Spotify or or Spotify can plug into one end and and use that for the consumer the consumer should still have a broad choice of experiences and yeah that's important what will they get out of it either they get nothing out of it because but they're there they are unconcerned with these questions but the artist does better or the prices might be cheaper because basically we're creating value by reducing the cost and then that can be distributed to people at either end of the chain so you can say if it currently costs $1 to buy this song maybe and of that an artist gets let's say 25 cents was no reason why you

can't set the price that's the artist gets more than 25 cents but the customer pays less than $1 you know so the value can be shared around the system between the creators and their customers it's intermediation yeah could make it cheaper for the consumer as well that's that's that's a really interesting that's a really interesting point so what has been the feedback to what has a feedback have you received regarding your first release of imagine heap song so it's been really extraordinary it's the project suddenly it existed since the spring of this year and more broadly in the music industry it has only been spoken about this has been spoken about for about a year but it generally in very hypothetical theoretical way but in the last I would say three or

four months they've been a number of events that have resulted in a big uptake in interest one of which was a report by Berkeley College of Music which was very widely reported which had recommendations a bit for blockchain and this means that it is at least a topic of discussion amongst all of the big music companies all of the big performing right societies a lot of artists and specifically in our case having produces prototype we have had discussions with some pretty big artists about the possible possibilities for them had been approached by a number of big rights holders so companies and publishers to explore it for them

manages a big artists and also some institutions pulmonary societies that are only controlled by some writers and publishers so their natural incentives to do to do anything that supports some rights and publishers so they are all interested in it it's very difficult to know what the exact precise path forward will be but what I can say is it's just an extraordinary amount of interest you know interest and awareness now an excitement and or fear in some cases of what blockchain can bring about and I think we're gonna see certainly in our case various experiments prototypes collaborations while we find out you know what the definitive model is for

this technology Indian music so do you have some complete steps after your first prototype improvements that you know you're gonna make yeah in terms of functionality my ramas uses a single artists prototype it didn't really have any artists facing capability to upload things we would like to add Bitcoin payments in the future all these kind of things we'd like to do more work on where the content is stored because that's sort of separate to the blockchain layer just now all of those things but in terms of specific next steps we have specific projects that we're working towards which will be sort of more advanced releases of this based on the content of a particular

artist or a particular rights holder and we expect to do two or three or four of those in the first six months of next year so look you might be if this goes well you might be creating tremendous value not only for artists but listeners of music around the world and you deserve to have a platform that you can monetize for the for the service you did but what what strategy do you have monitor is a platform in which the logic is an open is on an open system like this helium that is a very very good question a very difficult question to answer I mean I think they're fundamentally for this platform to create the value as you say it's going

to have to be open it's gonna have to be decentralized that's the whole point there's no point in us creating the system and owning it and then charging rent on it and then I just does not the same stock the same idea to basically we just believe that by craziness as you say I said amount of value is going to be created and we are going to have to build additional application service around the edges and around the edge in order to monetize it you know in order for our own self greedy interest and that may be that we are helping big organizations migrate their you know their services onto onto this kind of platform it may be that we build customer facing things that are separate to the core infrastructure it could be a whole range of different things which

we're working on which I can tell you in great detail but which we're working on just now do you know great talking to you I hope you're having a good conference and yeah thanks very much yeah thanks for being on the show