Bitfury Surround is Creating a Bespoke Ecosystem for the Music Industry
The music industry needs its own version of aviation’s black box flight recorders: something reliable and indestructible that records every move, something you can turn to when trouble strikes. That’s why leading emerging technologies company Bitfury Group is developing Surround, a new blockchain-based ecosystem for developers and music professionals.
“No one is looking for an accurate recording of what happened until there’s a problem,” says Stefan Schulz, major label veteran and Surround CEO. “Until now, going back and trying to figure out what’s correct, whether it is copyright infringement and a royalties issue, would have been extremely costly, or simply impossible. Blockchain changes that.”
Blockchain records transactions as they happen in immutable form. For music, that means every stream and every purchase is recorded and timestamped at the moment it occurs. This may not sound that revolutionary, but it is: the industry has been depending on digital service providers, for example, to generate the number of streams per track (a crucial metric in business decision making and royalty payouts). Yet these numbers are only available after significant delays and are rife with discrepancies. Blockchain can uncover these errors and inconsistencies. It can also form the basis for a wide range of data-intensive transactions and creative initiatives with the potential to empower artists and unleash new and faster revenue.
To unlock blockchain’s full potential for the industry, Surround is designing an ecosystem where APIs, software products, and new applications can flourish. “We’re building an API that delivers the functionality for companies and individuals in the music industry, including user authentication/know your customers, reporting engines, licensing, and metadata management,” explains Surround CTO Alexandr Shevchenko. “On top of this functionality, we’re creating sample products like an artist dashboard, where artists and their teams can see how copyrights are performing at the moment. Once Surround launches fully, there will eventually be lots of different APIs on the platform, and a lot of products on top of the APIs created by third-party developers.” “We’re looking first and foremost to connect and facilitate,” adds Schulz.
The possibilities for blockchain in the music industry are rich but potentially overwhelming. Surround can handle a whopping 100,000 transactions per second and then translate that data into human-readable interfaces, analysis, and predictive guidance. Using some basic content, such as an audio file, lyrics, and/or artwork, Surround will be able to document a track, connect to all contributing artists, and set up revenue splits for collaborators that are implemented only if all parties agree. Once an agreement is set, you can prove at any given time, in any given country, that a song was yours at this specific date. “Clearing all IP on a music track to prove ownership can take even major label teams months,” notes Schulz. “That’s months of views you can’t monetize.”
While these features promise to improve efficiency and transparency, the real excitement of blockchain comes from the yet undiscovered applications that can provide new revenues for artists, labels, and publishers. Surround’s non-fungible tokens (NFTs), for example, could inspire new, intriguing approaches to fan engagement and ticketing. “There’s a lot of room for creativity, to spark imagination and come up with new ideas,” says Shevchenko. “Surround NFTs can be used for crypto ticketing. They can let you create digital collectibles or non-transferrable super deluxe versions of albums issued to a named individual.” These collectibles can be used to create interactive connections with fans, as well as reward dedicated followers.
One key dynamic in Surround’s approach to transforming the music industry is incentivizing the hurdles music professionals face. That includes making it worthwhile for every stakeholder to deal effectively with metadata and other betes noires of the business. “Rights management isn’t the solution. You’re asking for people to do more work, with no clear or immediate payout,” reflects Schulz. “Instead, you have to solve this commercially, by giving people the business incentive to fix the problem.” Part of this incentive stems from Surround’s payment system, which will allow artists to receive payouts quickly from verified partners on Surround’s marketplace, directly into their secure wallets. All stakeholders will be able to receive payment in Bitcoin, US dollars, Euros, or their local currency of choice.
Transparency can be a market outcome, changing the game from one in which everyone is upset and disappointed, to a win-win for music users and music providers. This black box recorder-like transparency will be baked into every Surround block, letting artists see clearly what’s working, what they’re due, and what they should try next. “We’re creating the means,” Schulz says. “We’re letting people do business how they wish, but with full interoperability. That means more freedom and more opportunity.”