Ri 01/2017: Wie alles begann

Ri-nova 01/2018: Navigation

Ri-nova 01/2018: Beitrag

Music for Everyone. Payment Too?

Remuneration of Authors and Performers for Music Streaming

Anna K. Bernzen*

I. Growing Revenues, Decreasing Incomes

 

2017 was a thoroughly successful year for the recorded music industry: for the third time in succession this market grew – by a total of 8.1 percent. Although sales in the past year did not reach the heights they had climbed to in the 1990s, the downward trend of the past two decades has apparently slowed for the time being. Streaming platforms such as Spotify, Apple Music and Deezer are a major factor in this development. The revenues generated on these platforms by selling subscriptions to 176 million music fans worldwide accounted for almost 40 percent of the industry’s total revenues in 2017 – and this figure is set to rise, with 64 million new subscribers added last year alone.[1]

___STEADY_PAYWALL___

Good news for composers, lyricists, musicians and singers (hereafter referred to as artists)? An exemplary look at the income of American cellist Zoë Keating raises doubts. In 2017, the third consecutive year of growth in the recording market, she listed all the revenues which she had generated by distributing her music on the Internet in a publicly accessible table. This table shows, for example, that she received an average of around $ 1.96 per download unit on iTunes. Each stream on Spotify, on the other hand, earned her only about 0.004 cents. Nearly 7,500 downloads therefore added up to about $ 14,600 in revenue, while nearly three million streams added up to only about $ 10,000.[2] Naturally, $ 0.00004 is more than $ 0 which Keating would have received if Spotify subscribers had instead downloaded their music via file sharing portals such as Napster, which has by now ceased operations, or in a similarly illegal way.[3] Nevertheless, the cellist’s example raises the question of whether the income currently generated on music streaming platforms is distributed fairly among all parties involved.

 

This article aims to answer this question in three steps: Firstly, it will examine the current legal situation with regard to streaming and the problems it causes in practice. Secondly, it will consider whether the blockchain technology can assist in creating equitable remuneration for artists. Thirdly and finally, it will analyse possible solutions which would require legislative intervention.

 

I. Streaming Today: Numerous Right Holders, Numerous Contracts, Great Dissatisfaction

 

Streaming currently requires the conclusion of a large number of contracts in which an equally sizeable number of parties are involved. In practice, it therefore follows that the distribution of the income generated by streaming music does not always reflect the economic interests of all parties involved.

 

1. Numerous Right Holders, Numerous Contracts

 

On the user side, the contractual relationship is described quickly: The listener as the user enters into a subscription contract with the operator of the streaming platform, allowing them to stream music to the extent specified therein. In technical terms, this means that individual parts of the music file selected by the user are successively transferred to his computer, temporarily stored there and can then be played back to the user. A permanent and complete copy of the music file is not created on the user’s computer – unlike when downloading the file.[4] In return, the user either pays a subscription fee or ought to listen regularly to the advertisements which the operator of the streaming platform sells to generate its income. Spotify, for example, offers both types of subscription models: If users register for ‘Spotify Free’, they pay no fees, but have to listen to advertisements regularly. If, however, they register for ‘Spotify Premium’, they pay € 9.99 per month, but are able to listen to the music without any advertising interruptions.[5]

 

The various contractual relationships on the provider side are more complex to describe than those on the user side. On the one hand, the operator of the streaming platform faces musicians and singers as performers within the meaning of s. 73 of the German Copyright Act (‘Gesetz über Urheberrecht und verwandte Schutzrechte’, abbreviated as ‘UrhG’). As a rule, however, these performers do not enter into contracts with the operator themselves. Rather, the operator’s contractual partner is usually a recording company (also known as a label) such as the Universal Music Group (UMG) or Sony Music Entertainment (SME) to whom the performers have previously transferred the exploitation rights to their performances pursuant to ss. 77, 78 para. 1 UrhG (cf. s. 79 para. 1 sentence 1 UrhG) or granted rights of use to their performances (cf. s. 79 para. 2 UrhG). The label enters into a licence agreement with the platform operator, as a result of which said operator may make the performances available to the public (cf. s. 78 para. 1 no. 1 in conjunction with s. 19a UrhG).[6] In return, the operator pays a licence fee to the recording company. The performers then receive a share of this fee from the label in return for the granting of the rights. The level of their remuneration depends on the contract between the respective performer and the recording company.

 

On the other hand, the operator of the streaming platform is often additionally confronted with the authors of the musical works (cf. s. 2 para. 1 no. 2 UrhG), i.e. the composers and lyricists (also known as the songwriters). After all, not all musicians and singers write their songs themselves. As a rule, however, music authors also do not enter into their own licence agreements with platform operators. Instead, many German music authors have signed a deed of assignment with the ‘Gesellschaft für musikalische Aufführungs- und mechanische Vervielfältigungsrechte’ (GEMA) as the competent collecting society. GEMA then exercises the authors’ rights to make their works available to the public (cf. s. 19a UrhG) on a fiduciary basis (cf. art. 1 lit. 4 para. 3 GEMA-BerV[7]). It enters into licence agreements with the operator of the streaming platform, as a result of which the latter may make the musical works available to the public.[8] The licence fees which GEMA receives in return are then distributed to all the music authors who have signed deeds of assignment with GEMA in accordance with a fixed distribution plan.[9]

 

Some of the music authors, however, have granted rights of use to a music publisher, which – similar to the recording companies for the performers –[10] enters into a licence agreement with the platform operator.[11] In return for granting the operator the right to make the musical works available to the public, the music publisher receives a licence fee. What proportion of said fee is then passed on to the music authors depends on the respective music publishing contract.

 

2. Great Dissatisfaction

 

In practice, the large number of (licence) contracts which have to be drawn up in order to operate a streaming platform in conformity with the law often means that the economic interests of artists are not taken into account to their desired extent when music is distributed digitally.

 

a) Low Level of Remuneration

 

The main grievance of many artists is that the remuneration which they receive for the use of their music on streaming platforms is too low. For example, American pop singer Taylor Swift made headlines in 2014 when she stopped distributing her songs via Spotify for this reason.[12] She was in good company at the time: a year earlier, for example, the British alternative rock band Radiohead had removed its music from the platform due to the low income generated this way.[13] According to a study conducted in France by the consulting firm Ernst & Young in 2014, out of the total € 9.99 per month paid, for example, to Spotify by each premium subscriber, only € 0.68 actually reaches the musicians and singers as the performers. The composers and lyricists as the music authors receive a whole € 1. However, € 4.56 are passed on to the labels and € 2.08 remain with the platform operators.[14]

 

This unequal distribution of the revenues might – at least in part – be due to the fact that not all contracts between labels or music publishers and artists have yet been adapted to the peculiarities of digital music distribution. As long as music was sold to the users on, for example, a CD or a vinyl record, it made sense to grant the recording companies a large share of the revenues from music distribution. After all, they used it to finance the production of the phonograms. However, such costs are no longer incurred when music files are distributed over the Internet. This is not yet reflected in all contracts.[15]

 

b) Long Waiting Periods for Remuneration

 

A further point of criticism which particularly concerns music authors who have signed a deed of assignment with GEMA is the timing with which revenues generated on streaming platforms are disbursed. The collecting society distributes its income quarterly to the authors.[16] They therefore usually wait several months to obtain their remuneration for each stream. Even the authors and performers whose rights are exploited by labels and music publishers usually do not receive their share of the revenues immediately. Where, for example, several versions of a song exist and it is therefore not immediately clear who must be paid for the stream and to what extent, their payment may be delayed.[17]

 

c) Complicated Distribution of the Remuneration

 

As with any licencing of musical works or performances, the question arises as to how the income is to be distributed among the various right holders involved. If the performer is not the stereotypical singer/songwriter who accompanies himself on the guitar, both the authors of the music and the musicians and singers involved in its performance must be paid for each stream. Oftentimes, these artists are represented by different recording companies and music publishers. It is due to this that an equitable distribution of the remuneration among the right holders is never easy to achieve. In the case of streaming, however, the income which has to be distributed among the artists additionally often amounts only to a few cents (or even fractions of a cent) per stream. Distributing such small amounts among a large number of right holders is complicated in practice –[18] leaving aside the economic sense of such a venture.

 

d) Uncertainty about the Ownership of Rights

 

According to art. 5 para. 2 sentence 1 half sentence 1 of the Revised Berne Convention (RBC), it is inadmissible to make the creation of a copyright dependent on the registration of the respective work. For this reason, a copyright register does not exist in many countries. Where such registers do exist, for example in the USA,[19] they are naturally not complete. Therefore, it is often difficult to identify all authors – especially in the case of musical works which often have several co-authors (cf. s. 8 para. 1 UrhG).[20] In their case, there is also uncertainty as to which performers were involved in the respective performances. After all, these performers are not registered either. If, however, it is not clear who holds which rights to the music and, as a result, not all the necessary licence agreements are entered into by the operators of the streaming platform, not all those entitled to it receive remuneration for the use of their work or performance.

 

3. Preliminary Conclusion

 

In practice, the complex contractual relationships in the case of music streaming often mean that the economic interests of the artists take a back seat to those of the platform operators and the exploiters. Therefore, fairness of remuneration is not currently achieved in music streaming.

 

III. Streaming Tomorrow: the Blockchain as the Panacea for the Music Industry?

 

Instead of calling on the legislator to act, a technical solution for the problems just described might be devised. As in many other areas,[21] the question of whether the blockchain technology can provide such a solution is currently being considered. The functionality of the blockchain will not be described in more detail at this point; in this respect, reference is made to older articles in Recht innovativ.[22] Instead, this article will go on to introduce some streaming platforms which (according to their operators) employ the blockchain technology for music streaming. Additionally, possible advantages, disadvantages, and challenges of this technical implementation will be discussed.

 

1. Possible Use Cases of the Streaming Blockchain

 

Before describing the individual platforms which claim to use the blockchain technology for music streaming, it should be said that the following descriptions of their functionality are taken from the promotional white papers and websites penned by the operators. The extent to which this information is correct cannot be assessed at this point due to the lack of a detailed description.

 

a) Musicoin

 

According to its operators, the first project to employ the blockchain technology for music streaming is Musicoin (www.musicoin.org). The main initiator of this platform is the Chinese online activist and entrepreneur Isaac Mao.[23] According to the Musicoin White Paper, which was released in its second version in 2017, artists ought to upload their music to the platform where users ought to be able to listen to it. However, according to the paper, the music files ought not to be stored on a central server, but decentrally on the blockchain. This technology ought to also become relevant for the payment of artists: every time a user listens to an artist’s music, a certain amount of $MUSIC, the platform’s own so-called cryptocurrency, ought to automatically be credited to the artist on the basis of a so-called Pay Per Play (PPP) Smart Contract.[24] The conditions of said PPP Smart Contract ought to be determined by the artists themselves when they upload their songs to the platform, the Musicoin website states.[25] In particular, artists ought to be able to determine that all income is automatically distributed to a certain extent to certain right holders.[26] In this way, it ought to be possible to determine in advance exactly what proportion of the remuneration the various music authors and performers involved ought to receive for each stream.

 

The platform operators also claim that the Musicoin users ought to be able to listen to their music free of charge and without advertising. The artists ought to earn their income through the so-called Universal Basic Income (UBI).[27] In order to be able to distribute this UBI, a fixed proportion of all coins earned through mining ought to be transferred to a corresponding pool.[28] 78 percent of this pool ought to be distributed among all artists whose music the users listen to; the remaining part ought to be invested in the development of the platform.[29] In addition, the operators suggest that users ought to be able to directly tip artists with $MUSIC – an additional source of income that might be more lucrative than the income which is paid out under the PPP Smart Contracts, the white paper claims.[30] A further source of income ought soon to be the sale of additional goods and services, such as concert tickets, by individual artists in exchange for $MUSIC.[31] In this respect, the platform operators are apparently still in the beginning of development.

 

b) Choon

 

A relatively new streaming platform which (according to its operators) is based on the blockchain technology and which operates in a similar manner as Musicoin is Choon (www.choon.co). The platform is run, inter alia, by the British trance DJ Gareth Emery.[32] As can be seen from the white paper that he and his co-founders published, artists ought to be able to upload their music to this platform and users ought then to be able to listen to it. As with Apple Music and similar portals – and thus differing from Musicoin –, the operators claim that subscribers ought to be able to pay for the music with fiat money, currently with US dollars. Although Choon’s own so-called cryptocurrency NOTES ought also to be used for this purpose, this should not be a must, according to the operators. By providing the opportunity to use its platform without any knowledge of so-called cryptocurrencies, Choon’s operators argue that the barriers to entry for potential users ought to be lowered.[33]

 

According to the platform’s white paper, four different sources of income for artists ought to exist at Choon: In the first ten years of its existence, 50 percent of all NOTES (more precisely: one billion of these tokens[34]) ought to be distributed among all the artists present on the platform. The more often an artist’s music is streamed, the greater his share of the NOTES distributed ought to be (so-called streaming as mining).[35] In addition, artists ought to share 80 percent of the advertising revenues and the revenues from subscriptions, which ought to be sold as soon as Choon has established itself on the market. The fourth possible source of income ought to be direct payments to the artists which users ought to make, for example, for the download of music or the purchase of merchandise.[36]

 

According to the information provided by Choon, all income ought to automatically be distributed to the right holders involved in accordance with a pre-defined Smart Record Contract and to the extent which was determined in advance.[37] The operators argue that it is particularly attractive for the artists that the NOTES earned ought to be credited to their digital wallet at the end of each day.[38] This ought to enable them, for example, to pay for advertising for their music on the platform or to pay to be included in curated playlists.[39]

 

c) SounDAC

 

The third platform presented here is SounDAC (soundac.io). It is not a streaming platform. According to its operators, it is intended to support the music consumption on those platforms by means of the blockchain technology. The SounDAC blockchain ought to provide a database in which right holders ought to be able to register their musical works via the so-called Rights Management Portal. Artists ought not only to be able to register their authorship, but also to determine to whom and to what extent the revenues from streaming will be distributed. As a result, interested streaming platforms ought to be able to include songs registered on the SounDAC blockchain in their repertoire more easily. A platform which should already be working with this technology is PeerTracks (peertracks.com). When a user listens to a song on this platform which its right holder has previously registered on the SounDAC blockchain, the remuneration for the stream ought to be automatically distributed to the right holders by means of a smart contract. Said distribution ought to take place to the exact extent which was determined when the song was entered into the database.[40] The right holders ought to be paid in RYLT, the platform’s own so-called cryptocurrency.[41] Both the SounDAC database and the PeerTracks platform were founded by the entrepreneurs Cédric Cobban and Eddie Corral.[42]

 

2. Possible Advantages of the Streaming Blockchain

 

Platforms such as Musicoin, Choon and SoundDAC might eliminate some of the practical problems arising from the numerous contractual relationships when it comes to streaming, provided they work as the operators of the platforms promise.

 

a) Direct Contact Between Users and Artists

 

Assuming the promised functionality, the biggest advantage of the streaming blockchain would be that it could make some of the parties traditionally involved in music streaming obsolete. Naturally, the operator of the respective streaming platform would still stand between users and artists, providing the necessary infrastructure. However, the labels, music publishers and collecting societies which are currently the contractual partners of platform operators would no longer be involved if a blockchain-based solution were to be implemented. This could have two positive consequences.

 

Firstly, as a result, artists may come into direct contact with the users, who are then no longer just the consumers of the music, but who become a part of the musical process.[43] By, for example, giving the artists tips or buying tickets for their concerts directly from them, they might establish a relationship with them.[44] Notwithstanding the contribution which this relationship might make to the artistic creation, this direct connection might be monetised, as the two examples mentioned above show. Models such as that of the alternative rock musician J. R. Richards indicate that users are indeed interested in a relationship of this kind. For $ 8 per month, fans who book the ‘Green Room VIP’ package on his website can listen to ‘Supporter Only’ music, for example, and receive a discount on merchandise.[45] If the streaming blockchain opened up additional revenue streams like this, it might contribute to a better remuneration of the artists.

 

Secondly, streaming on blockchain-based platforms might mean that a larger share of the revenue could be distributed to the artists, as the exploiters would no longer be involved in licencing.[46] Admittedly, the operators of streaming platforms which are, according to their own information, blockchain-based do not operate free of charge. Musicoin intends to keep about 22 percent of the $MUSIC pool from which the UBI is generated. Choon wants to retain 20 percent of its revenues from advertising and subscriptions. Their share of the revenue from streaming therefore does not differ much from that which, according to the study by Ernst & Young which was cited above, is currently retained by traditional streaming providers. On the other hand, the considerable sums which are currently paid to the exploiters as the contracting parties of platform operators are omitted. Compared to the approximately 17 percent of revenues currently obtained by the artists for the streaming of their music on Spotify and the like, according to the study by Ernst & Young,[47] 78 and 80 percent respectively of the revenues supposedly distributed by Musicoin and Choon would amount to a significant increase in the artists’ income.

 

b) Less Costly Distribution of the Remuneration

 

Financially, the blockchain solution, if it works as the providers of the platforms described above promise, might also be attractive because it reduces the costs associated with collecting and distributing the remuneration. If users were to pay with a so-called cryptocurrency, as is currently mandatory at Musicoin, for example, and if the right holders were then also to be paid in this cryptocurrency, the exchange rates between currencies that are conceivable when paying with fiat money might be omitted.[48] In addition, there would be no bank or similar administration fees which would have to be deducted from the payout amount.[49] If smart contracts[50] actually executed all of the payments automatically, the administrative burden of the payment would also be reduced. In this case, cost-intensive bookkeeping units, for example, would no longer have to be maintained. On the one hand, all the developments described above would lead to larger profit margins for the artists. On the other hand, the reduced expenses would mean that even the distribution of very small revenues to the artists could be financially worthwhile which otherwise might not have been the case due to the excessively high costs of handling the payments.[51] In this respect too, the blockchain-based streaming platforms could increase the artists’ incomes.

 

c) Precise Distribution of the Remuneration

 

Another advantage of using smart contracts in particular could be that they might enable the numerous right holders to determine in advance exactly how the income from streaming should be distributed.[52] For example, it might be possible for a band consisting of three musicians and one singer to determine that 40 percent of the revenues should go to the singer and 20 percent to each of the three musicians. By using a smart contract, even the fraction of a cent which is usually paid per stream could be distributed precisely between all these rights owners.

 

d) No Waiting Period for Remuneration

 

For music authors in particular, smart contracts might offer the advantage that they could be paid for streaming at the same time, or at least more promptly.[53] Where on traditional streaming platforms they usually receive their share of GEMA’s revenues at intervals of a few months, they could get paid in (nearly) real time on blockchain-based streaming platforms. Their share of the income could thus be passed on considerably earlier than is currently the case when their music is streamed.

 

e) Global Database of Ownership of Rights

 

Lastly, Blockchain-based platforms for rights management in streaming, which, according to its operators, includes SounDAC, could create a global database of rights to musical works and their performances.[54] This database might be used to break down exactly who owns which rights to the music.[55] This could make it easier for platform operators to obtain all the licences required for the legal use of music for streaming purposes. As a result, all right holders who are entitled to remuneration for the use of ‘their’ music would be paid for it.

 

3. Disadvantages and Challenges of the Streaming Blockchain

 

As appealing as the listed potentials of a blockchain-based streaming platform may sound with a view to the equitable remuneration of artists, their intended advantages over traditional streaming platforms are not necessarily fully realised in practice. From a technical point of view, it is unclear when the streaming blockchain will reach its limits. In particular, it is doubtful whether an extensive music collection such as, for example, Spotify’s could be stored using the blockchain technology, as it is known to be scalable only to a limited extent.[56] Furthermore, the streaming blockchain might bring with it some disadvantages and challenges for the equitable remuneration of artists which do not exist in the digital distribution of music via Deezer and Co.

 

a) Additional Costs for Artists

 

Bypassing labels, publishers and collecting societies as exploiters may lead to a situation in which a larger share of the income from streaming is distributed to the artists. However, a distinction must be made between revenue and profit. The income from streaming on traditional platforms which is currently retained by the exploiters is not entirely at their disposal either. The recording companies, for example, pay for the advertisements for their artists’ music. Artists would have to bear the costs for these advertisements themselves on blockchain-based platforms. At Choon, for example, the operators suggest that they use the NOTES which they earned to buy adverts.[57] These expenses reduce the artists’ profits from streaming. The labels also usually take on management tasks for the artists. For example, they organise the production of music and the concert tours.[58] All of these tasks would have to be undertaken by the artists themselves on blockchain-based platforms – or at least actively outsourced to third parties. These parties’ compensation would then have to be deducted from the income from streaming as well. It is therefore entirely unclear how much greater the artists’ profits would be on blockchain-based platforms when compared to the profits made distributing music on traditional streaming platforms.

 

Even if the fact that the exploiters were no longer involved meant that a higher profit could be realised, not all artists might be interested in taking over the manifold tasks currently carried out by the labels, or in searching for third parties to carry them out. After all, the time invested in these tasks could not be used to make music. It is therefore quite conceivable that some of the artists would agree to forgo a part of the possible remuneration if, in return, the exploiters were to take care of them. However, this would not be a possibility on a blockchain-based streaming platform.

 

b) Worse Negotiating Position for Artists

 

Furthermore, the labels, music publishers and collecting societies represent a large number of performers or music authors and therefore have a better negotiating position vis-à-vis the streaming platforms than the individual artists. They, who are to face the providers individually on the blockchain-based platforms, would generally hardly be in a position to negotiate a higher share of the revenues. The shares that Musicoin and Choon, for example, claim to currently distribute to the artists, are certainly so attractive at first glance that there is as of now no need for such a negotiation. In their white papers, the operators of these platforms repeatedly emphasize their desire to democratize the music industry[59] and to promote ‘sharism’[60], i.e. to share fairly with all parties involved. However, it is hard to imagine that all operators of blockchain-based streaming platforms will pursue such noble goals. As a rule, they too will want to make a profit from operating the platforms and accordingly will retain portions of the subscription fees, demand payments for advertising on their platforms and generate income in other ways. Should they decide to make the conditions for the use of their platforms less attractive for the artists than they are claimed to be today, smaller, less well-known artists in particular would hardly be in a position to negotiate with them.

 

c) Volatility of the Platforms’ Own So-called Cryptocurrencies

 

On all three of the platforms presented above, artists are paid in the so-called cryptocurrencies which are inherent to the platforms – in $MUSIC, NOTES or RYLT. At first glance, this may simplify the payment process. However, it goes hand in hand with the risks that every so-called cryptocurrency entails: These ‘currencies’, if they are in demand at all, are subject to potentially high exchange rate fluctuations and in extreme cases can become completely worthless for their ‘owners’. The artists might therefore, for example, be able to use them on the platforms to pay for advertisements. However, if they wanted to use their income from streaming to pay for the production of their music or to place advertising outside the streaming platform, for instance, they would first have to exchange the so-called cryptocurrencies for fiat money. If the tokens have lost value in the meantime, this would have an effect on their profits.

 

d) Low Commercial Importance of the Streaming Blockchain

 

Blockchain-based streaming providers such as Choon who intend to generate profits (among other things) through advertising and subscriptions must be attractive to a large group of users in order to generate relevant revenues. This presupposes that they attract a large number of interesting artists who wish to distribute their music via their platform. The operators of Choon have apparently recognized this and made the use of their platform free of charge in the first year of its existence, thus until an appealing collection of music has been built up.[61] At the same time, however, they considerably restrict the circle of artists who are eligible for distributing their music on the platform: they state that it is only permitted if the artists in questions still hold all the rights to their works.[62]

 

From a legal point of view, this approach is sensible: making music available for streaming if the platform operators have not previously entered into the required licence agreement with the artists, since they themselves cannot dispose of the rights, would expose the operators to a high risk of a claim for damages. In consequence, however, this means that the distribution of music via the blockchain-based platform is out of the question for those artists who have signed a contract with a label as well as for those music authors who are represented by a music publisher or who have signed a deed of assignment with GEMA. Especially small, unknown artists are therefore most likely to be attracted to Choon and similar platforms. Artists who are popular in the mainstream and who have already transfered their rights to a recording company, for example, are unlikely to rely on the blockchain.[63] The disadvantages described above – from the volatility of the ‘currency’ in which the artists ought to be paid, to the additional (financial) costs incurred for tasks which the labels in particular had previously assumed – ultimately create no incentive for artists to terminate their contractual relationships with the exploiters and to instead rely on the streaming blockchain. This stands in the way of the commercial success of platforms based on the blockchain technology.

 

e) No Monitoring of Entries into the Blockchain Database

 

On Musicoin, artists who intend to upload their music to the platform have to verify themselves as such, according to the information on its website. This may be done, for instance, by specifying their social media accounts which a Musicoin employee ought to then check.[64] However, it is hardly possible to reliably identify oneself as the right holder to the uploaded music due to the lack of registration of the copyright and the ancillary copyright of the performers. As far as can be seen, it is not currently required on any of the three platforms presented either. Whether blockchain-based rights management offers for streaming such as SounDAC could actually create a global database for music rights is therefore highly questionable. One platform of this kind – Copytrack, which claims to offer a blockchain-based database for the copyrights in photographs – is currently under considerable criticism in this respect: Experts doubt that the operator can conclusively check whether the person uploading a photograph is in fact its author. For example, even the submission of the unedited original version of a photograph might not allow a certain conclusion to be drawn about authorship, they argue.[65]

 

The most detailed knowledge about the ownership of rights to music is currently held by the different exploiters. However, labels, publishers and collecting societies are not likely to be interested in entering the accurate data in a blockchain-based database provided by third parties.[66] This would ultimately mean that they would lose their role as intermediaries between artists and platform operators – a loss that would result in a smaller profit for them. In this context, the failure of the Global Repertoire Database working group at the European Union (EU) level should serve as a warning: Even this initiative, which included not only iTunes, Apple, Amazon and Co. but also various recording companies and collecting societies, failed to create a comprehensive database of music rights. Not all of the group’s participants were interested in contributing their knowledge at that time.[67] Taking all this into account, it is hard to imagine how a decentralised blockchain solution can achieve this goal without the participation of the exploiters.

 

Should the attempt of creating a global database based on the blockchain technology nevertheless be made, it is quite possible that this database would not reflect the real ownership of rights to the music registered on it. After all, a blockchain stores what is consistent with the technical requirements for storage. That the stored information is true, however, is not a prerequisite.[68] If the original entries in the blockchain database are inaccurate, all the advantages described above cannot be realized for the true right holders. Worse still: they will be granted to persons who do not hold any or at least not the claimed rights to the music. The question then arises how incorrect entries in the database can be corrected. Even if the blockchain is not absolutely unchangeable, it can only be modified under exceptional conditions.[69] Once the ownership of rights has been stored incorrectly on the blockchain, a correction is therefore extremely difficult and cost-intensive.

In this respect, the streaming blockchain therefore does not offer any advantages over traditional streaming.

 

4. Preliminary Conclusion

 

For performers who have not signed a contract with a label or for music authors who have not entered into a music publishing contract and have not signed a deed of assignment with GEMA, blockchain-based streaming platforms are, in theory, one way of disseminating their music. However, the extent to which these platforms can actually be technically implemented on as large a scale as their operators currently promise is still completely unclear. Even if it were technically possible to implement a streaming blockchain, there is no guarantee that it would actually offer any advantages over traditional streaming platforms. However, it would clearly be associated with various disadvantages. The streaming blockchain therefore does not offer a solution to the problem of the lack of equitable remuneration on streaming platforms.

 

IV. Streaming Tomorrow: a Task for the Legislator

 

If the problems arising in the distribution of the revenues from streaming music on platforms cannot be solved by a technical means, they must be addressed at the legal level. So far, there have been only a few isolated proposals in the German scholarly literature as to how legislators could contribute to greater fairness of remuneration on streaming platforms. These ideas will be examined below in order to determine to what extent they can achieve their goal.

 

1. Establishment of a Public Streaming Platform

 

Köster and Grabowsky, writing in relation to the cultural sector as a whole, are of the opinion that the market alone can no longer guarantee equitable remuneration for the artists. They therefore propose the establishment of a public streaming platform – a sort of public Spotify. In their opinion, a fair balance may be achieved between the interests of the artists and those of the users on such a platform.[70]

  

However, a public platform would – as already mentioned for blockchain-based streaming platforms – only be an attractive offer for a large number of users if they were able to listen to the music of well-known and popular artists on it. As a rule, however, these artists have already signed contracts with a label or a music publisher who will have no interest in entering into a licence agreement with the operator of a public streaming platform. After all, the artists’ desire for a larger share of the revenues on the one hand and the users’ interest in low subscription costs on the other hand could probably only be met at the same time if the exploiters were to participate to a lesser extent in the revenues from streaming. Why they should voluntarily accept such an economic loss is unclear. Therefore, a public platform – much like a blockchain-based model – would probably attract above all small and unknown artists who still hold all the rights to their music. A ‘state Spotify’ is therefore unlikely to achieve commercial success.

 

This might be remedied by introducing a statutory obligation for exploiters to enter into licence agreements with the operator of the public platform. When entering into such licence agreements, however, freedom of contract applies, i.e. it is entirely up to the right holders to enter into the licence agreement or not.[71] This contractual freedom would be severely encroached upon by a compulsion for licensure.

 

In addition, a statutory licence obligation would not remedy the unfair distribution of remuneration which may take place between the artists and the exploiters: how the licence revenues would be distributed between these two parties would remain entirely up to them even if a licence agreement were entered into with the operator of a public streaming platform. If the revenues which labels and publishers are able to generate through music streaming were lower on this public platform, it is likely that they would pass on their losses to the artists. It therefore remains to be seen whether a public platform could actually contribute to a higher remuneration of the artists.

For all these reasons, such a platform offers no solution to the problem of the lack of equitable remuneration on streaming platforms – leaving aside the question of whether such a strong influence of the state on the music industry is desirable at all.

 

2. Introduction of a Statutory Transparency Obligation

 

As the operators of the streaming platforms are already passing on a large part of their revenues to the right holders, it would be conceivable to address regulations not to them but to the labels and music publishers.[72] The latter two, after all, usually retain a large share of the revenues from streaming and distribute only a small fraction to the artists.[73] The problem of the unfair distribution of remuneration might therefore have to be solved at the level of the licence agreement between the artists and the exploiters.

 

Against this background, Grünberger argues that a transparency obligation to which the exploiters could be subject might be a possible solution. He points to art. 14 of the Proposal for a Directive on copyright in the Digital Single Market[74], which is currently under discussion at the EU level.[75] The first paragraph of this article requires EU member states to guarantee the authors and performers a right to regular, ‘timely, adequate and sufficient information on the exploitation of their works and performances’ vis-à-vis those to whom they have granted rights of use or transferred exploitation rights. This information is intended to enable them to assess how the economic value of their rights has developed. This should put them into a position to determine whether the remuneration originally agreed upon is still appropriate.[76] If their rights are worth more than they thought when the licence agreement was originally entered into, they ought to be able to demand higher remuneration from the exploiters.

 

However, as Grünberger correctly points out: the rights to information and accountability which in Germany were already laid down in ss. 32d, 32e UrhG for authors in the beginning of 2017, and which apply to performers pursuant to s. 79 para. 2a UrhG, go far beyond the transparency obligation provided for in the proposed directive.[77] Nevertheless, it is not evident that the remuneration situation of artists has changed significantly since the described rights have been enshrined in law in Germany. If an artist asserts his right to information and, as a result, learns of particularly high revenues from music streaming, this does not mean that he is in such a strong negotiating position that he can demand a greater share of the income than originally agreed upon after all. Well-known artists may succeed in negotiating for a larger share; less popular artists, on the other hand, will probably only rarely be in a position to renegotiate a licence agreement once it has been signed.

 

For some of them, the German legislator has provided a way out: if it turns out that an artist receives licence fees which are considerably too low due to the great success of his music, he can assert his claim to a modification of the contract pursuant to s. 32a para. 1 UrhG, for performers in conjunction with s. 78 para. 2a UrhG. According to these provisions, the author or performer who has granted someone a right of use to his work or performance or who has transferred his exploitation rights to the performance to someone may demand that the latter agree to a modification of the licence agreement by which a higher remuneration is agreed upon. On this basis, the artists could, in extreme cases, obtain judicial assurances that the exploiters contractually guarantee them a higher remuneration for the streaming of their music. However, they are only entitled to a modification if the agreed remuneration on the one hand and the proceeds and benefits derived from the use of the work or performance on the other are conspicuously disproportionate (cf. s. 32a para. 1 sentence 1 UrhG). Such an imbalance is only assumed if the agreed remuneration amounts to only half of the remuneration regarded as appropriate.[78] In practice, this will only rarely be the case when it comes to music streaming.

 

In conclusion, the problem of the lack of fair remuneration will not be solved by the introduction of a statutory duty of transparency for exploiters. Although the corresponding right may provide the artists with interesting insights into the exploiters’ revenues, it will probably only rarely give them a real opportunity to work towards a higher remuneration for the streaming of their music.

 

3. Introduction of a Statutory Right to Remuneration

 

If the remuneration from music streaming cannot be fairly distributed at the licencing level even if the legislator intervenes, the only remaining option is to provide for a statutory right to remuneration directed against the platform operator.

 

a) Statutory Right to Remuneration as Compensation for a Limitation on Copyright

 

One possible solution is to introduce a statutory right to remuneration as compensation for a new limitation on copyright which allows streaming. Limitations on copyright are statutory provisions which, as an exception, make it impossible for right holders to prohibit certain uses of a copyrighted work or of the object of an ancillary copyright.[79] Conversely, this means that users may use the work or the object without having to negotiate a licence agreement with the right holder in each individual case. Probably the best-known limitation on copyright is the possibility of making reproductions of a work for private use (cf. s. 53 UrhG). In order to compensate for the fact that the author can no longer fully determine the use of his work on the basis of a limitation on copyright such as this, many of these limitations contain a statutory right of the author or holder of an ancilliary right to an equitable remuneration.[80] In the case of the limitation on copyright for private reproductions of a work, such remuneration is demanded, for example, from the manufacturers, traders, and importers of technical equipment with which copies may be made (cf. ss. 54 ff. UrhG). This remuneration provided for by law presumably falls short of what the right holder would have received if he had entered into a licence agreement.

 

Leistner proposes a limitation on copyright for streaming which would go hand in hand with a statutory right to remuneration for artists in order to preserve cultural diversity on the Internet. Individual artists and smaller labels which provide for such diversity cannot afford to leave the traditional streaming platforms at the moment, he claims. Well-known artists and big labels might be in a position to do so, but as a result might be cementing their monopoly.[81] Every limitation on copyright must, however, pass the so-called three-step test: It may only apply in special cases (step 1). In addition, it must not conflict with the normal exploitation of the work (step 2). Finally, it must not unreasonably prejudice the legitimate interests of the right holder (step 3).[82] A limitation on copyright which allows platform operators to stream music without further ado and, in return, grants authors and performers only a statutory right to remuneration does not fulfil these three conditions.

 

At the first stage of the three-step test, a limitation on copyright for streaming would fail because it would not only come into play in special cases. Streaming is, as the revenues of the recorded music industry from 2017 show,[83] a particularly relevant way of exploiting the rights to music. It is therefore the rule, not the exception.

For this reason, a limitation on copyright for streaming could not climb to the second level of the three-step test either: the normal exploitation of a musical work or its performance would be considerably impaired by the statutory authorisation of streaming. Scheufele believes that, against this background, a limitation on copyright for streaming could only be considered in the event of a market failure. At any rate, he claims, such a failure does not exist on streaming platforms which generate their revenues from subscriptions.[84] Admittedly, the high revenues generated in the recorded music industry last year on Spotify and Co. which continue to increase[85] speak against a market failure. Additionally, the revenues from streaming are distributed to a relevant extent to the right holders, as the study by Ernst & Young cited above shows.[86] Although the remuneration for music streaming should be distributed more fairly between exploiters and artists, a complete market failure cannot be assessed. Referring the artists to a statutory right to remuneration as a result of which they would probably receive a significantly lower remuneration for streaming than on the basis of individual licence agreements would therefore seriously impair the normal exploitation of the rights to their music.

 

Finally, the streaming barrier would not do justice to the requirements at the third level of the three-step rest, according to which the legitimate interests of the right holder may not be unreasonably prejudiced. Gerlach rightly points out that a statutory right to remuneration might secure equitable remuneration for the artists. At the same time, however, the corresponding limitation on copyright would deprive them of the control over the use of their music:[87] if and by whom their works or performances would be disseminated via streaming, they would ultimately no longer be able to determine if a corresponding barrier regulation was introduced. However, this is a legitimate interest of the artists. In view of the growing importance of streaming for music distribution, this legitimate interest would be violated to such an extent by a limitation on copyright for streaming that its introduction would be unreasonable for the artists.

 

Therefore, a limitation on copyright according to which streaming of music is permissible without the conclusion of individual licence agreements and the artists in return receive only a statutory right to an equitable remuneration cannot be considered.

 

b) Independent Statutory Right to Remuneration

 

Lastly, the introduction of an independent statutory right to remuneration in addition to the contractual right to compensation must therefore be considered.

 

aa) Extension of the Existing, Independent Right to Remuneration

 

Usually, music authors or performers receive remuneration for the use of their music in one of two ways: On the one hand, they can grant rights of use to their musical works or performances to third parties or transfer the exploitation rights to their performances to them. In return, they receive a licence fee. On the other hand, they can receive a remuneration where this is provided for by law as compensation for a limitation on copyright. One such example was discussed above. The fact that these two types of remuneration claims – contractual and statutory – stand side by side is in principle not provided for in the UrhG.[88]

 

S. 27 para. 1 UrhG contains an exception to this rule. It provides that every lessor of a video or audio recording shall pay the author an equitable remuneration even if said author has previously granted his rental rights (cf. s. 17 para. 3 UrhG) to a producer of such recordings – thus, if he has already received remuneration for the granting of the rental rights within the framework of his licence agreement with said producer. In this case, two independent rights to remuneration stand side by side: the author’s contractual claim against the producer and the author’s statutory claim against the lessor. In the past, the statutory claim to remuneration was less relevant to the rental of audio recordings but primarily concerned the rental of video recordings from video stores.[89] It was and is asserted pursuant to s. 27 para. 3 UrhG by the competent collecting societies, in the case of the music authors thus by GEMA. Performing artists are also entitled to the remuneration described above under s. 77 para. 2 sentence 2 UrhG. Their right is enforced by the ‘Gesellschaft zur Verwertung von Leistungsschutzrechten’ (GVL).[90]

 

In the case of streaming, the artists cannot rely on the right to remuneration under s. 27 para. 1 UrhG because, from the point of view of German copyright law, streaming is a non-material act of exploitation, specifically making the work available to the public under s. 19a UrhG. S. 27 para. 1 UrhG, on the other hand, requires the rental of a work embodied on a picture or sound carrier.[91] Grünberger, however, suggests interpreting the right to remuneration broadly in accordance with modern users’ habits and extending it to the ‘renting’ of non-material objects. After all, he argues, streaming is the modern equivalent to the rental of CDs, DVDs and the like.[92] Scheufele rejects this, however, with reference to the intention of the legislator. When it first regulated the non-material exploitation of a work expressly in s. 19a UrhG, s. 27 para. 1 UrhG had already been in the UrhG for quite some time. The legislator could therefore have extended this statutory right to remuneration to the making available of the work to the public at that time. However, they decided against it.[93]

 

Whether s. 27 para. 1 UrhG can be interpreted in such a way that streaming is covered by it does not, however, have to be decided. For reasons of legal certainty with regard to this increasingly important type of use, it is advisable to create a separate statutory basis (if one decides to introduce a statutory right to remuneration at all).

 

bb) Introduction of a New, Independent Right to Remuneration

 

This is exactly what the FAIR INTERNET Coalition, which brought together over 500,000 performers, demanded from the European legislator in connection with the current reform of copyright law at the EU level: ‘an unwaivable right to receive remuneration directly from service providers making their performances available on demand’[94]. Such a statutory right to remuneration against the platform operator would stand side by side with the contractual claim for remuneration against the exploiters.

 

Scheufele, however, rejects the introduction of an independent right to remuneration against platform operators. To justify this, he refers to the genesis of the currently only such right pursuant to s. 27 para. 1 UrhG. That the authors receive a remuneration for the granting of their rental rights on a contractual basis and that they are, at the same time, entitled to statutory remuneration for the rental had only been introduced into German copyright law in the implementation of the Directive on Rental and Lending Rights[95]. Art. 4 of the Directive provided that authors and performers were to retain their right to equitable remuneration for the rental of their audio recordings even if they had previously granted a label the right to carry out the rental. Otherwise, the legislature feared, the artists might not be able to agree upon an equitable remuneration for the rental with the exploiters because of their disadvantageous negotiating position.[96] In Scheufele’s view, the fact that the Directive intended to regulate such a special situation precludes the introduction of a similar right to remuneration for streaming.[97]

 

However, the genesis of the right pursuant to s. 27 para. 1 UrhG also permits the exact opposite conclusion. The statutory right to remuneration was originally introduced in order to guarantee that the author – as is required by s. 11 sentence 2 UrhG – receives an equitable remuneration for the use of his work.[98] Since the rental of video and audio recordings resulted in fewer vinyl records, video cassettes and the like being sold and since the author consequently had a lower income from their sale, the legislator argued that he should receive an additional remuneration for the rental.[99] In Gerlach’s opinion, the artists whose music is distributed through streaming are in a similar situation today. In both cases – renting and streaming – the work or performance is ultimately made available for a fee for a limited period of time. The fact that the user does not have a physical carrier for the work when streaming the music makes no difference to him.[100] To not provide for a similar statutory right to remuneration for streaming as for renting would therefore lead to a large gap in the legal protection of the right holders.[101]

 

In fact, the distribution of revenues in the music industry shows that streaming music is becoming increasingly important compared to other distribution channels. While the revenues generated on streaming platforms continue to increase, it is not only the revenues from the sale of physical sound carriers that are declining. The income generated by its digital parallel, the download of music, is also declining noticeably.[102] Users are increasingly streaming music instead of buying it on iTunes, for example. The current situation of music authors and performers is therefore quite comparable with the situation that the legislature intended to regulate with the introduction of the statutory right to remuneration for renting audio recordings. In order to remunerate artists equitably for their work, it is therefore necessary to introduce a statutory right to remuneration against the operators of streaming platforms which applies in addition to the contractual remuneration claim against the exploiters. How this claim should be structured is a topic for a separate article. In any case, a regulation at the EU level is advisable, in parallel to the right to remuneration for rentals.

 

V. Conclusion

 

Streaming, as the current sales figures for the recording industry show, is fundamentally a positive development for the music industry. However, the income generated by streaming music is not yet fairly distributed between all parties involved. Blockchain-based streaming platforms cannot solve the distribution problem either – if they function at all in the way their providers describe. In order to guarantee authors and performers an equitable remuneration for the use of their musical works or performances through streaming, the legislator should therefore introduce an independent statutory right to remuneration against the platform operators.

 

Until this happens, however, performers in particular will have a number of options to digitally distribute their music without the help of a recording company, even outside the popular streaming platforms. One option, for example, is to make the music available for download on one’s own website, like the aforementioned alternative rock musician J. R. Richards.[103] The cellist Zoë Keating, who was introduced at the beginning of this article, sells her music via the independent distribution platform Bandcamp.[104] Keating’s revenues from 2017 show that such alternative forms of distribution can indeed be financially lucrative: for every download on Bandcamp, she received an average of about $ 6.66. For comparison: for every stream on Spotify, it was about 0.004 cents.[105]

A

A

* Dipl.-Jur. Anna K. Bernzen, LL.B. has been a PhD student at the Chair of Civil Law, Intellectual Property Law and German and European Civil Procedure Law of Prof. Dr. Mary-Rose McGuire, M. Jur. (Göttingen) at the University of Osnabrück since 2016; academic assistant at the Chair of Public Law and Philosophy of Law of Prof. Dr. Hans-Joachim Cremer at the University of Mannheim since 2017; focus areas: media law, intellectual property law, IT law. She thanks Roman F. Kehrberger, Mag. iur. (Heidelberg) for his valuable feedback during the writing of this article.


[1]  For all of the above, see: IFPI, Global Music Report 2018, http://www.ifpi.org/downloads/GMR2018.pdf (downloaded on 28.9.2018), p. 10.

[2]  For an overview over her income, see: https://docs.google.com/spreadsheets/d/1eJyp7AQ7Ye-MNdyD1pn0SulZZSlrxE3mr5rrXp20FXc/edit#gid=0 (downloaded on 28.9.2018).

[3]  For an assessment of the legality of file sharing on Napster and similar platforms under German copyright law, see: Kreutzer, Napster, Gnutella & Co.: Rechtsfragen zu Filesharing-Netzen aus der Sicht des deutschen Urheberrechts de lege lata und de lege ferenda – Teil 1, GRUR 2001, 193; Kreutzer, Napster, Gnutella & Co.: Rechtsfragen zu Filesharing-Netzen aus der Sicht des deutschen Urheberrechts de lege lata und de lege ferenda – Teil 2, GRUR 2001, 307 as well as Braun, ‘Filesharing’-Netze und deutsches Urheberrecht – Zugleich eine Entgegnung auf Kreutzer, GRUR 2001, 193 ff. und 307 ff., GRUR 2001, 1106.

[4]  Koch, Werknutzung durch Streaming, ITRB 2011, 266 (267).

[5]  Https://www.spotify.com/de/premium/ (downloaded on 28.9.2018).

[6]  Cf. Dustmann, in: Fromm/Nordemann (Ed.), UrhG, 11th ed. 2014, s. 19a para. 20.

[7]  Short for: ‘GEMA-Berechtigungsvertrag’, referring to the deed of assignment signed with GEMA.

[8]  For a more detailled explanation, see: Weberling/Kowalczyk, Zuständigkeit und Wahrnehmungsbefugnis der GEMA im Bereich der Onlinenutzung von Musikwerken, AfP 2018, 298 (299 f.).

[9]  For the current distribution plan, see: www.gema.de/fileadmin/user_upload/Gema/jahrbuch/16_Verteilungsplan.pdf (downloaded on 28.9.2018).

[10]  Many recording companies are affiliated with their own music publishers, for example Sony/ATV Music Publishing which is part of the Sony Corporation (cf. https://www.sonyatv.com/en/about [downloaded on 28.09.2018]).

[11]  Tschmuck, 20.4.2017, die musikstreaming-ökonomie – ein einblick, https://musikwirtschaftsforschung.wordpress.com/2017/04/20/die-musikstreaming-oekonomie-ein-einblick (downloaded on 28.9.2018) provides an overview over the complex contractual structures required for music streaming.

[12]  Kerkmann/Hegemann, 4.11.2014, Bye bye, Spotify!, https://www.handelsblatt.com/unternehmen/it-medien/taylor-swift-ausstieg-der-anfang-vom-ende-bye-bye-spotify/10929056.html?ticket=ST-8114600-o139ISuAXZNHA1qukrtU-ap4 (downloaded on 28.9.2018).

[13]  Leubecher, 16.7.2013, Radiohead-Frontmann rebelliert gegen Spotify, https://www.welt.de/wirtschaft/webwelt/article118114643/Radiohead-Frontmann-rebelliert-gegen-Spotify.html (downloaded on 28.9.2018). Both Swift and Radiohead’s music are available on Spotify again today.

[14]  SNEP/Ernst & Young, 3.2.2015, Bilan 2014 du Marché de la Musique Enregistrée, www.snepmusique.com/actualites-du-snep/bilan-de-lannee-2014 (downloaded on 28.9.2018), p. 17.

[15]  Rack, 9.3.2016, Streaming: Warum kommt so wenig bei Musikern an?, https://www.telemedicus.info/article/3059-Streaming-Warum-kommt-so-wenig-bei-Musikern-an.html (downloaded on 28.9.2018).

[16]  For the timing of the distribution, see: www.gema.de/musikurheber/mitgliedskonto/verteilungstermine (downloaded on 28.9.2018).

[17]  Gottfried, 26.10.2016, Kettenreaktion: Wie die Blockchain die Musikindustrie transformieren wird (Teil 1), https://www.digitale-exzellenz.de/kettenreaktion-wie-die-blockchain-die-musikindustrie-transformieren-wird (downloaded on 28.9.2018).

[18]  Gottfried, 26.10.2016, Kettenreaktion: Wie die Blockchain die Musikindustrie transformieren wird (Teil 1), https://www.digitale-exzellenz.de/kettenreaktion-wie-die-blockchain-die-musikindustrie-transformieren-wird (downloaded on 28.9.2018).

[19]  Www.copyright.gov/registration (downloaded on 28.9.2018).

[20]  Scheufele, Neue gesetzliche Vergütungsansprüche für Kreative?, ZUM 2017, 316 (319).

[21]  For an analysis of the suggestion of replacing the German land registry with a blockchain, for example, see: Otto, Die Vermessung des Blocksbergs, Ri 2018, 16.

[22]  See especially: Otto, Vom Anwalt, der auszog, das Fürchten zu lernen, Ri 2017, 5 (6 ff.).

[23]  Bevacqua, 11.7.2017, Are Cryptocurrencies Like Bitcoin the Solution to the Music Industry’s Woes? , https://www.laweekly.com/music/blockchain-to-the-rescue-how-bitcoin-technology-could-save-streaming-music-revenue-8383424 (downloaded on 28.9.2018).

[24]  Musicoin, October 2017, Musicoin White Paper, version 2.0.0, https://de.scribd.com/document/362834077/Musicoin-White-Paper-v2-0-0 (downloaded on 28.9.2018), p. 12.

[25]  Musicoin.org/musicians (downloaded on 28.9.2018).

[26]  Musicoin, October 2017, Musicoin White Paper, version 2.0.0, https://de.scribd.com/document/362834077/Musicoin-White-Paper-v2-0-0 (downloaded on 28.9.2018), p. 12.

[27]  Musicoin, October 2017, Musicoin White Paper, version 2.0.0, https://de.scribd.com/document/362834077/Musicoin-White-Paper-v2-0-0 (downloaded on 28.9.2018), p. 15.

[28]  Musicoin, October 2017, Musicoin White Paper, version 2.0.0, https://de.scribd.com/document/362834077/Musicoin-White-Paper-v2-0-0 (downloaded on 28.9.2018), p. 16.

[29]  Musicoin, October 2017, Musicoin White Paper, version 2.0.0, https://de.scribd.com/document/362834077/Musicoin-White-Paper-v2-0-0 (downloaded on 28.9.2018), p. 17.

[30]  Musicoin, October 2017, Musicoin White Paper, version 2.0.0, https://de.scribd.com/document/362834077/Musicoin-White-Paper-v2-0-0 (downloaded on 28.9.2018), p. 15 f., p. 19.

[31]Musicoin, October 2017, Musicoin White Paper, version 2.0.0, https://de.scribd.com/document/362834077/Musicoin-White-Paper-v2-0-0 (downloaded on 28.9.2018), p. 19.

[32]  Bein, 6.12.2017, Gareth Emery Wants to Disrupt Music Labels With Blockchain-Based Publication, Distribution & Discovery Company Choon, https://www.billboard.com/articles/news/dance/8061798/gareth-emery-blockchain-choon (downloaded on 28.9.2018).

[33]  Choon, The Blockchain’s Music Solution, Whitepaper, https://info.choon.co/public/pdf/choon_white_paper.pdf (downloaded on 28.9.2018), p. 7.

[34]  For a detailed analysis of the buzzword ‘token’, see: Otto, ‘Got a Token?’, Ri-nova 2018, 14.

[35]  Choon, The Blockchain’s Music Solution, Whitepaper, https://info.choon.co/public/pdf/choon_white_paper.pdf (downloaded on 28.9.2018), p. 6.

[36]  Choon, The Blockchain’s Music Solution, Whitepaper, https://info.choon.co/public/pdf/choon_white_paper.pdf (downloaded on 28.9.2018), p. 9.

[37]  Choon, The Blockchain’s Music Solution, Whitepaper, https://info.choon.co/public/pdf/choon_white_paper.pdf (downloaded on 28.9.2018), p. 11.

[38]  Choon, The Blockchain’s Music Solution, Whitepaper, https://info.choon.co/public/pdf/choon_white_paper.pdf (downloaded on 28.9.2018), p. 6.

[39]  Choon, The Blockchain’s Music Solution, Whitepaper, https://info.choon.co/public/pdf/choon_white_paper.pdf (downloaded on 28.9.2018), p. 7.

[40]  Https://soundac.io/how-it-works (downloaded on 28.9.2018).

[41]  Https://soundac.io/faq (downloaded on 28.9.2018).

[42]  PeerTracks, 13.9.2018, Message from the founders: Cédric Cobban and Eddie Corral, https://blog.peertracks.com/message-from-the-founders-cedric-cobban-and-eddie-corral/ (downloaded on 28.9.2018).

[43]  Wegerle, 1.1.2017, Wie die Blockchain-Technologie dabei helfen kann, die Zukunft der digitalen Musikindustrie zu gestalten, https://blog.landr.com/de/wie-die-blockchain-technologie-dabei-helfen-kann-die-zukunft-der-digitalen-musikindustrie-zu-gestalten (downloaded on 28.9.2018).

[44]  Gruber, 1.12.2015, Diese Technologie soll die Musikindustrie auf den Kopf stellen, https://www.sueddeutsche.de/digital/lieder-kaufen-im-internet-nach-bitcoin-blockchain-soll-musikindustrie-auf-den-kopf-stellen-1.2751548 (downloaded on 28.9.2018).

[45]  Https://jrrichards.bandcamp.com/green-room-vip (downloaded on 28.09.2018).

[46]  Wegerle, 1.1.2017, Wie die Blockchain-Technologie dabei helfen kann, die Zukunft der digitalen Musikindustrie zu gestalten, https://blog.landr.com/de/wie-die-blockchain-technologie-dabei-helfen-kann-die-zukunft-der-digitalen-musikindustrie-zu-gestalten (downloaded on 28.9.2018).

[47]  SNEP/Ernst & Young, 3.2.2015, Bilan 2014 du Marché de la Musique Enregistrée, www.snepmusique.com/actualites-du-snep/bilan-de-lannee-2014 (downloaded on 28.9.2018), p. 17.

[48]  Gottfried, Zu schön, um wahr zu sein – was die Blockchain für die Musikindustrie bedeutet, https://www.imusiciandigital.com/de/zu-schon-um-wahr-zu-sein-was-die-blockchain-fur-die-musikindustrie-bedeutet (downloaded on 28.9.2018).

[49]  Gottfried, 26.10.2016, Kettenreaktion: Wie die Blockchain die Musikindustrie transformieren wird (Teil 1), https://www.digitale-exzellenz.de/kettenreaktion-wie-die-blockchain-die-musikindustrie-transformieren-wird (downloaded on 28.9.2018).

[50]  For a technical and legal overview over smart (legal) contracts, see: Otto, Welcome to the Matrix, Ri 2017 24 (26 ff.).

[51]  Gottfried, 26.10.2016, Kettenreaktion: Wie die Blockchain die Musikindustrie transformieren wird (Teil 1), https://www.digitale-exzellenz.de/kettenreaktion-wie-die-blockchain-die-musikindustrie-transformieren-wird (downloaded on 28.9.2018); O’Dair, 27.7.2016, Wie Blockchain Musikern helfen könnte, von ihrer Musik zu leben, https://www.netzpiloten.de/blockchain-helfen-musik-leben (downloaded on 28.9.2018); Scheufele, Neue gesetzliche Vergütungsansprüche für Kreative?, ZUM 2017, 316 (319).

[52]  Gottfried, Zu schön, um wahr zu sein – was die Blockchain für die Musikindustrie bedeutet, https://www.imusiciandigital.com/de/zu-schon-um-wahr-zu-sein-was-die-blockchain-fur-die-musikindustrie-bedeutet (downloaded on 28.9.2018); O’Dair, 27.7.2016, Wie Blockchain Musikern helfen könnte, von ihrer Musik zu leben, https://www.netzpiloten.de/blockchain-helfen-musik-leben (downloaded on 28.9.2018); Scheufele, Neue gesetzliche Vergütungsansprüche für Kreative?, ZUM 2017, 316 (319).

[53]  Gottfried, Zu schön, um wahr zu sein – was die Blockchain für die Musikindustrie bedeutet, https://www.imusiciandigital.com/de/zu-schon-um-wahr-zu-sein-was-die-blockchain-fur-die-musikindustrie-bedeutet (downloaded on 28.9.2018); Gottfried, 2.11.2016, Kettenreaktion: Wie die Blockchain die Musikindustrie transformieren wird (Teil 2), https://www.digitale-exzellenz.de/kettenreaktion-wie-die-blockchain-die-musikindustrie-transformieren-wird-teil-2 (downloaded on 28.9.2018); O’Dair, 27.7.2016, Wie Blockchain Musikern helfen könnte, von ihrer Musik zu leben, https://www.netzpiloten.de/blockchain-helfen-musik-leben (downloaded on 28.9.2018); Scheufele, Neue gesetzliche Vergütungsansprüche für Kreative?, ZUM 2017, 316 (319).

[54]  O’Dair, 27.7.2016, Wie Blockchain Musikern helfen könnte, von ihrer Musik zu leben, https://www.netzpiloten.de/blockchain-helfen-musik-leben (downloaded on 28.9.2018).

[55]  Wegerle, 1.1.2017, Wie die Blockchain-Technologie dabei helfen kann, die Zukunft der digitalen Musikindustrie zu gestalten, https://blog.landr.com/de/wie-die-blockchain-technologie-dabei-helfen-kann-die-zukunft-der-digitalen-musikindustrie-zu-gestalten (downloaded on 28.9.2018).

[56]  Cf. Otto, ‘Die Vermessung des Blocksbergs’, Ri 2018, 16 (19).

[57]  Choon, The Blockchain’s Music Solution, Whitepaper, https://info.choon.co/public/pdf/choon_white_paper.pdf (downloaded on 28.9.2018), p. 7.

[58]  Rack, 9.3.2016, Streaming: Warum kommt so wenig bei Musikern an?, https://www.telemedicus.info/article/3059-Streaming-Warum-kommt-so-wenig-bei-Musikern-an.html (downloaded on 28.9.2018).

[59]  Choon, The Blockchain’s Music Solution, Whitepaper, https://info.choon.co/public/pdf/choon_white_paper.pdf (downloaded on 28.9.2018), p. 4.

[60]  Musicoin, Oktober 2017, Musicoin White Paper, Version 2.0.0, https://de.scribd.com/document/362834077/Musicoin-White-Paper-v2-0-0 (downloaded on 28.9.2018), p. 20 f.

[61]  Choon, The Blockchain’s Music Solution, Whitepaper, https://info.choon.co/public/pdf/choon_white_paper.pdf (downloaded on 28.9.2018), p. 9.

[62]  Choon, The Blockchain’s Music Solution, Whitepaper, https://info.choon.co/public/pdf/choon_white_paper.pdf (downloaded on 28.9.2018), p. 5.

[63]  Gruber, 1.12.2015, Diese Technologie soll die Musikindustrie auf den Kopf stellen, https://www.sueddeutsche.de/digital/lieder-kaufen-im-internet-nach-bitcoin-blockchain-soll-musikindustrie-auf-den-kopf-stellen-1.2751548 (downloaded on 28.9.2018).

[64]  Musicoin.org/musicians (downloaded on 28.9.2018).

[65]  Kerler, 13.9.2018, Strafanzeige nach Millionen-ICO: Ärger für Chef des Berliner Start-ups Copytrack, https://www.wired.de/article/strafanzeige-nach-millionen-ico-aerger-fuer-chef-des-berliner-start-ups-copytrack-concensum-blockchain (downloaded on 28.9.2018).

[66]  Gruber, 1.12.2015, Diese Technologie soll die Musikindustrie auf den Kopf stellen, https://www.sueddeutsche.de/digital/lieder-kaufen-im-internet-nach-bitcoin-blockchain-soll-musikindustrie-auf-den-kopf-stellen-1.2751548 (downloaded on 28.9.2018).

[67]  For more details on the initiative, see: Edwards, 15.2.2016, Who Will Build the Music Industry’s Global Rights Database?, https://www.musicbusinessworldwide.com/who-will-build-the-music-industrys-global-rights-database (downloaded on 28.9.2018).

[68]  Otto, Die Vermessung des Blocksbergs, Ri 2018, 16 (24).

[69]  Otto, Vom Anwalt der auszog, das Fürchten zu lernen, Ri 2017, 5 (8).

[70]  Köster/Grabowsky, Die Modernisierung des europäischen Urheberrechts – Sichtweisen aus dem EU-Parlament, ZUM 2016, 236 (237).

[71]  Groß, Der Lizenzvertrag, 11th ed. 2015, B) I) para. 43.

[72]  Scheufele, Neue gesetzliche Vergütungsansprüche für Kreative?, ZUM 2017, 316 (319).

[73]  Cf. SNEP/Ernst & Young, 3.2.2015, Bilan 2014 du Marché de la Musique Enregistrée, www.snepmusique.com/actualites-du-snep/bilan-de-lannee-2014 (downloaded on 28.9.2018), p. 17.

[74]  Proposal for a Directive of the European Parliament and of the Council on copyright in the Digital Single Market, 14.9.2016, COM(2016) 593 final.

[75]  Grünberger, Vergütungsgerechtigkeit auf Online-Plattformen, ZUM 2017, 265 (267 f.)

[76]  Recital 40 of the Proposal for a Directive of the European Parliament and of the Council on copyright in the Digital Single Market, 14.9.2016, COM(2016) 593 final.

[77]  Grünberger, Vergütungsgerechtigkeit auf Online-Plattformen, ZUM 2017, 265 (267 f.). See also Gerlach, Faire Beteiligung der ausübenden Künstler an Online-Erlösen nach dem Vorbild der Vermietrichtlinie, ZUM 2017, 312.

[78]  Schulze, in: Dreier/Schulze (Ed.), UrhG, 6th ed. 2018, s. 32a para. 37.

[79]  For the different legislative ways of achieving this, see: Dreier, in: Dreier/Schulze (fn. 78), introduction to s. 44a para. 11.

[80]  Dustmann, in: Fromm/Nordemann (fn. 6), introduction to s. 44a para. 9.

[81]  Leistner, in: Niederalt/Pech, Die Zukunft des Urheberrechts – 50 Jahre Urheberrecht in Deutschland, ZUM 2016, 239 (242). Agreeing with his idea: Dobusch, in: Niederalt/Pech, Die Zukunft des Urheberrechts – 50 Jahre Urheberrecht in Deutschland, ZUM 2016, 239 (246); Schneider, in: Niederalt/Pech, Die Zukunft des Urheberrechts – 50 Jahre Urheberrecht in Deutschland, ZUM 2016, 239 (242).

[82]  See art. 9 para. 2 RBC, art. 13 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and art. 5 para. 5 of the Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society [2001] OJ L167/10.

[83]  IFPI, Global Music Report 2018, http://www.ifpi.org/downloads/GMR2018.pdf (downloaded on 28.9.2018), p. 10.

[84]  Scheufele, Neue gesetzliche Vergütungsansprüche für Kreative?, ZUM 2017, 316 (319).

[85]  IFPI, Global Music Report 2018, http://www.ifpi.org/downloads/GMR2018.pdf (downloaded on 28.9.2018), p. 10.

[86]  SNEP/Ernst & Young, 3.2.2015, Bilan 2014 du Marché de la Musique Enregistrée, www.snepmusique.com/actualites-du-snep/bilan-de-lannee-2014 (downloaded on 28.9.2018), p. 17.

[87]  Gerlach, Faire Beteiligung der ausübenden Künstler an Online-Erlösen nach dem Vorbild der Vermietrichtlinie, ZUM 2017, 312 (313).

[88]  Scheufele, Neue gesetzliche Vergütungsansprüche für Kreative?, ZUM 2017, 316 (318).

[89]  See only OLG Düsseldorf, 30.7.1987 – 20 U 4/87, GRUR 1987, 907 – Videothek; OLG Köln, 3.4.1998 – 6 U 139/97, ZUM 1998, 659 – Vergütungsansprüche der GEMA gegen Videothek; LG Oldenburg, 14.2.1996 – 5 S 1148/95, GRUR 1996, 487 – Videothek-Treffpunkt.

[90]  Cf. § 1 (1) 1. g) ‘GVL-Wahrnehmungsvertrag’, i.e. the deed of assignment signed with the GVL.

[91]  Scheufele, Neue gesetzliche Vergütungsansprüche für Kreative?, ZUM 2017, 316.

[92]  Grünberger, Vergütungsgerechtigkeit auf Online-Plattformen, ZUM 2017, 265 (268).

[93]  Scheufele, Neue gesetzliche Vergütungsansprüche für Kreative?, ZUM 2017, 316.

[94]  Fair Internet for Performers, 13.9.2018, The European Parliament adopts the copyright directive, https://www.fair-internet.eu (downloaded on 28.9.2018).

[95]  Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright in the field of intellectual property [1992] OJ L346/61.

[96]  BT-Drs. 13/115, p. 7.

[97]  Scheufele, Neue gesetzliche Vergütungsansprüche für Kreative?, ZUM 2017, 316 (316 f.).

[98]  BT-Drs. 4/270, p. 54.

[99]  Schulze, in: Dreier/Schulze (Fn. 78), s. 27 para. 1.

[100]  Gerlach, Faire Beteiligung der ausübenden Künstler an Online-Erlösen nach dem Vorbild der Vermietrichtlinie ZUM 2017, 312 (314).

[101]  Gerlach, Faire Beteiligung der ausübenden Künstler an Online-Erlösen nach dem Vorbild der Vermietrichtlinie ZUM 2017, 312 (314).

[102]  IFPI, Global Music Report 2018, http://www.ifpi.org/downloads/GMR2018.pdf (downloaded on 28.9.2018), p. 11.

[103]  Https://jrrichards.bandcamp.com/music (downloaded on 28.9.2018).

[104]  Https://music.zoekeating.com (downloaded on 28.9.2018).

[105]  Https://docs.google.com/spreadsheets/d/1eJyp7AQ7Ye-MNdyD1pn0SulZZSlrxE3mr5rrXp20FXc/edit#gid=0 (downloaded on 28.9.2018).

 

Titelbild: © Jezper via Adobe Stock, #42874084