A conversation with Sergio Mottola

The music industry has seen massive transformations in the digital age, yet still faces numerous challenges, particularly in managing and monetising intellectual property (IP). The Web3 Music Association, the lead contributor to the Music Protocol, aims to address these challenges by introducing new infrastructure that leverages blockchain technology to create a more efficient and transparent ecosystem.

In this interview, Sergio Mottola, President and CEO of The Web3 Music Association, discusses the journey from his work in blockchain policy to developing this project. He explores how blockchain can streamline licensing, payments, and IP management and the potential to future-proof the music industry against disruptions such as generative AI. We also delve into the public good aspects of blockchain and how it aims to reshape the relationship between artists, labels, and the music ecosystem.

You previously worked in blockchain policy before building The Web3 Music Association. Was blockchain policy always your path? How did it all begin?

Sergio: No, not at all. People often suggested I'd go into diplomacy because I’m good at building narratives. I even pursued a PhD, but I left the program - I felt the need to be practical and hands-on rather than theoretical. A lot of my professional experience came from conversations and getting things done. I spent 22 years in London, which, like for many, is where I developed my progressive thinking. At the time, I was invited to join a political party to coordinate the digital agenda and strategy. Ministries weren’t sharing how they’d approach innovation, so that became my focus: integrating new frameworks for everyone to understand. It's like a self-driving car. If a car doesn't have a driver, who is responsible—the manufacturer? How do we ensure safety? We started iterating on blockchain by addressing these basic ideas. We deployed legislative power to attract business, and now the industry has grown from 20 companies to nearly 400. Yet, when I look at the website, it still has the same 2019 report, though companies build on what we initially defined. It's interesting how it all came together.

With this background, do you think working on a Web3 project that converts a traditional Web2 industry is more challenging?

Sergio: Yes, it is. If you sell a banana as a small business in a small country, you talk to farmers and the tax office. But for music technology, there are thousands of parties to deal with. You need to build a narrative, get buy-in, deploy resources, and participate, acknowledging everyone's perspective. My research focused on ecosystem dynamics, where innovations get stuck because people don't understand. It’s not just about buying in; it's about buying into a process.

With that in mind, do you approach people the way you did when you worked in policy and regulation, or has your approach changed?

Sergio: That's an interesting question. I started in insurance, which is a good analogy because you're selling a cover for a future risk. Take life insurance: you’re asking people to pay for protection against death, which they may argue isn’t necessary. Yet, they have families and responsibilities. It's difficult for people to conceptualise innovation, leading to the "Innovation Dilemma": disruption arises from people not recognising future trends. They stick to the old ways, proving over time that new methods are valid, becoming the new business model.

Music IP has historically been managed traditionally. What challenges does it face now?

Sergio: We need to restructure and redesign commercial models between the same counterparts. Licensing still involves paperwork, sitting down, negotiating terms, and signing. The one-to-many model is a classic Web2 approach, assuming platforms like TikTok and YouTube can license with major players, maintaining the status quo. But is this the future? Or will we unpack it, moving toward a more granular market? Automation is crucial to avoid lengthy negotiations and delays. We need to scale the industry, turning music IP into a blockchain-based system, allowing more efficient processing.

Can you tell me more about the critical components of the Music Protocol and how they impact artists and labels?

Sergio: The first component is IP identification, or "IP core," ensuring ownership registration. There's no global registry for music IP, making it hard to know who to contact. Blockchain can solve this, securely identifying owners and facilitating licensing. Attributes like legal exploitation can be attached, akin to Creative Commons licences. Blockchain provides a reliable framework, tracking every transaction and ensuring smooth execution. An IP licensing engine on the blockchain would manage licences, allowing users to understand and control them.

What about payments and other features?

Sergio: Payments must be automated, ensuring the business model pays everyone involved. We also include a multi-chain bridge, which addresses crypto industry segmentation.

How does this impact labels or artists not familiar with Web3?

Sergio: The Web3 Music Association is an intermediary, registering labels' catalogues on the blockchain and facilitating integration into digital spaces. They log in, see money flowing in, and needn’t understand the technology. User-friendly interfaces can simplify interactions, automatically registering transactions on the blockchain.

That sounds great. Can you elaborate on the comparison between the electrical grid and IP infrastructure so that our readers can understand the simplicity of the technology integration?

Sergio: The Internet is a general-purpose technology, much like electricity. It's an infrastructure, not a product. People plug in their devices and expect them to work, much like the internet's gradual global expansion. Blockchain, like electricity, is an infrastructure that faces resistance similar to early electricity adoption. Yet it fundamentally transforms industries, often with unexpected consequences.

Lastly, do you see Music Protocol as a technology for the public good?

Sergio: Yes, music is cultural, and culture should be public. Blockchain ensures IP's permanence, preventing loss and making it available forever. Even if an artist dies or a company folds, their IP remains, making it effectively public.

Learn more about Music Protocol here.