There’s a very complicated problem with a rather simple solution in Kenya’s music industry.
Perhaps our biggest mistake is underestimating what the industry is worth. Take for instance, the Khali Cartel 3 cypher, which garnered 1 million views in less than a week. That’s between 300,000 to 700,000 shillings to be divided among the artists in royalties for that week alone from YouTube.
The problem is this:
Royalties in Kenya are collected by CMOs (Collecting Management Organisations) such as Performers Rights Society of Kenya (PRISK), Music Publishers Association of Kenya (MPAKE) etc. All these are granted licenses by the Kenya Copyright Board (Kecobo) to collect royalties on behalf of Kenyan content creators. Kecobo (the licensor) audits the books of accounts of these CMOs to ensure that they follow the guidelines set. One of the conditions is that all CMOs must distribute 70% of their collections to the content owners.
It gets more complicated upon the realization that all of our CMOs report monthly collections of about 4 million which brings about Ksh. 2500 to be distributed among the 15,000 members recognized by MCSK. Artists like Khaligraph who bring in millions weekly from their work will end up getting 2,500 shillings at the turn of the year from MCSK. That pocket change is not only insulting, but also highway robbery!
The solution? Blockchain technology governed by smart contracts.
A blockchain is a growing list of records that are linked using cryptography. Each block contains a cryptographic record of the previous block, a time stamp and transactional data. Kind of like a digital ledger that is used to record transactions across many computers so that any involved record cannot be altered retroactively, without the alteration of all subsequent blocks.
Blockchain, by nature, would enable transparency over who owns copyrights over a digital work through title rights of art or song and further promotes digital payments enforced by smart contracts. If our music industry adopted a blockchain-focused distribution model, artists might not need the help of CMOs to secure royalties. It would mean that artists could become entrepreneurs and handle their revenues from album sales or radio royalties themselves, activities traditionally performed by intermediaries who control revenue they had no part in creating.
The first area where blockchain technology could disrupt the music business is in content rights distribution through smart contracts and IP protection. When a song is put on a blockchain, it gets allocated to a unique number, and hence is protected from fraud. As blockchains further enable peer-to-peer transactions via a smart contract, content creators can get money directly from fans or businesses. Overall, since no data can be changed in the blockchain, there is real transparency which lets content creators control their work. For example, illegal downloads of a song would be impossible on a blockchain.
For this to work, we only need a bunch of IT experts, lawyers, drafts-people and willing artists to eliminate intermediaries and protect their intellectual property rights by using a transparent and secure system of revenue collection. And that’s how we disrupt the industry forever.
The only ones that would be out of a job are CMOs-And no one would miss them.
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