In 2017, I wrote an article about why musicians need blockchain that laid out the problems that the music industry has faced for decades and how distributed ledger technology can make them better. Since then there has been a plethora of tokenized music blockchain projects that have entered the ecosystem, which is a wonderful thing.
Recently, the Corona Virus has exposed a new reason why the industry needs further adoption of blockchain. The American Society of Composers Authors and Publishers (ASCAP) let its members know that it would be experiencing delays in payments in response to the pandemic. Highlighted in a recent article in Billboard.com, ASCAP president and chairman Paul Williams sent an April 3, 2020 email stating, “As COVID-19 has continued to escalate and more and more of our licensee businesses have shut down, we have had to carefully review our cash forecasts and plan for more disruption to our revenue collections and member distributions […] As I mentioned in my last letter, the pandemic will have a material and negative impact financially on almost every category of licensing, so it is important to ensure that we are prepared for a decline in both revenues and distributions…”
Image: ASCAP
Pursuant to Mr. Williams’ email, ASCAP CEO Elizabeth Matthews sent another message to members informing them that ASCAP has, “already been contacted by numerous licensees who are attempting to pay less, pay late or not pay at all […] the April 28 writer distribution will be fully funded as we had originally anticipated…” she added. In addition, Ms. Matthews said payment processors “have also been materially impacted by COVID-19, so there is a domino impact that we are constantly navigating in terms of ensuring business continuity.”
Image: BMI
Although Broadcast Music, Inc. (BMI) will not immediately feel the effects of COVID-19 as a result of how its payments are structured, at some point this disease will manifest itself in its payments to artists. BMI president and CEO Mike O’Neill sent an email on March 16th to its members where he explained, “”I’m pleased to share with you that our distributions for the next six months will remain strong, and we do not anticipate any impact to BMI’s fiscal year 2020, which ends June 30 […] “However, given the current environment, we do anticipate that BMI’s fiscal year 2021 will be impacted, perhaps not in the first six months, but likely in the second half. It’s too early for us to tell the extent of the impact, but we are paying close attention as the situation evolves.”
Since Performance-Rights Organizations (PROs) have valid concerns and justifications for not paying artists during this difficult time an extra layer of transparency would be reassure all parties involved. This way, artists can identify who paid, who paid less, and who didn’t pay at all. Additionally, the PROs have the ability to also pinpoint where payments are lagging and provide evidence to artists as to why payments are not being made in the customary fashion. In conclusion, as the Novel Corona virus has done so much to change things for everyone in every industry, specifically, this pandemic has identified another reason why music industry needs blockchain solutions to keep the industry accountable.
Kamal Hubbard is a lawyer by training who is certified in Fraud Examination, Cybersecurity, and Decentralized Finance.