A Dynamic IP Model for the Music Industry

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April 29, 2024

The digital landscape is constantly evolving, and so is how we create and consume music. Unfortunately, the music industry’s foundations were not built for this. As a result, artists struggle to fully capture and grow the value of their intellectual property (IP). Static IP management infrastructure no longer aligns with the dynamic and interactive digital landscape, nor with the expectations of digitally-native consumers like Gen Z. Music IP licensing frameworks were traditionally designed as a one-to-one transaction model, but in a world where music is consumed and interacted with in various forms and shapes, music licensing needs an upgrade to a many-to-many dynamic.

From an analogue one-to-one era to a digital many-to-many era

Traditionally, licensing IP in the music industry was characterised by one-to-one relationships, where specific licences were negotiated individually between two parties. For instance, a record label might deal directly with a single broadcaster or video game studio to allow the use of a particular piece of music. These agreements are tailored to both parties’ specific needs and expectations, including the terms related to the duration, geographic scope, and financial arrangements. 

However, with advancements in digital technology and global music consumption, there’s a growing need to shift towards more universal and accessible licensing models. A single piece of music requires multiple licenses for different uses or users, moving from a one-to-one to a one-to-many relationship. 

Licensing in the digital era is further complicated by generative AI and user-generated content on social media or in digital spaces like the metaverse. While music IP is frequently utilised in these scenarios, there are no clearly enforced usage rights or licensing terms. This evolution pushes the need to transform traditional IP management from a one-to-many model to a more complex many-to-many dynamic.

The need for a flexible and dynamic IP framework

With the continuous expansion of social media, a thriving creator economy, and high-quality music creation tools, music creation is transitioning from being the exclusive domain of traditional musicians to becoming a widely accessible form of entertainment for the everyday consumer. With indistinguishable generative AI music at our doorstep, this development is accelerating in real-time. The shift towards mass consumer-driven music creation stretches the boundaries of our current understanding of music rights and necessitates the introduction of entirely new licensing mechanisms. The industry needs a flexible and dynamic IP framework that protects IP, supports the extensive and varied use of music across the Internet, and allows for mass licensing on a global scale.

What is dynamic music IP?

A dynamic IP asset represents a digitally adaptable, programmable, and expandable form of traditional intellectual property. It incorporates software modules that can be seen as “APIs” that automatically enforce pre-set terms and conditions for its use on the Internet. Embedding the rights and licensing agreements directly within the digital IP asset enables the creation of “IP derivatives” that build upon the IP base. This allows for the widespread use and further distribution of IP across various applications, platforms, and media – all supported with an auditable trace of use, without the manual licensing negotiations currently required, and ensuring that royalties are paid out in real-time. Imagine a system where music IP is not static but fluid, adapting in real-time to different uses across the Internet. This means that a song could seamlessly transition from being played on a metaverse radio in the morning to being used for AI model training in the afternoon and then sampled in a user-generated video on TikTok by evening.

A foundation for dynamic music IP

The vision of a dynamic IP future demands a rethinking of the industry’s traditional structures and principles. In this context, Music Protocol lays the foundation for dynamic IP to thrive, serving as infrastructure that manages the complex relationships between IP assets, its creators, and its users. By future-proofing the industry’s foundations, the music industry will unlock its full creative and economic potential, paving the way for growth.


Brought to you by the Web3 Music Association (“W3M”) – a non-profit entity with the goal of orchestrating innovation in the music industry. Its mission is to educate music industry professionals, support their digital transformation, and bring them together to collaboratively develop innovative use cases. Created from an extensive three-year collaboration, the association is a lead contributor to the Music Protocol – a dedicated blockchain for intellectual property registration, management and monetisation.

Contributor

Ivan Granito – Web3 Music Association Executive VP of Token Economies and Blockchain Strategy

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