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12 march 2018 ã. MUSICAL MINING – DIGITAL EARNINGS WITHOUT INTERMEDIARIES


Author: Artemiy Reimich

12.03.2018

The digital revolution gave authors and performers more freedom, a lot of new opportunities, but did not solve the problem of monetizing music. Even with access to the giant market and the emergence of the technological and legal platform, the issue of "making money on creativity" remains relevant. However, the year 2018 may be life-changing: in Russia, it is expected to launch a fundamentally new service based on the blockchain technologies applied when working with cryptocurrency. 


In January, the Ministry of Culture of the Russian Federation and IPChain Association ("National Coordination Center for Processing Transactions with Rights and Intellectual Property Objects") have signed a cooperation agreement. Its goal is the protection of copyright and related rights in the digital environment, creating new forms of their management and simplifying the dispute resolution procedure. The system creation was initiated by the Skolkovo Foundation, the All-Russian Intellectual Property Organization, the leading Russian scientific universities and market makers from media and music industry. The blockchain technology, underlying it, is very reliable. It ensures 100% saving of data and prevents backdating it or changing the transaction history manually – the process is fully automated. 

In February 2017, Musicoin was launched (https://musicoin.org) - the first service for composers, performers and producers working on such a system. According to experts, it can become an alternative to the new digital monopolies that have replaced the musical majors.

Musicians complain about low payments from streaming services: an impressive part of the product cost is taken by trading platforms, content aggregators and telecom operators. Musicoin can solve this problem working without intermediaries. By using PPP (Pay Per Play) contracts, payment is sent directly to the right holder immediately after using the record. Musicoin ideologists promise to help musicians monetize their author's music content by creating an understandable and transparent system. They use two algorithms in their work: one for generating cryptocurrency named Musicoin (MUSIC), the other for supporting automated "smart contracts" in order for musicians and consumers to make payments. The system can also split the earnings between members of a musical band, if they signed a contract. A fund of rewards is formed as a result of digital calculations. Computers conduct transactions and simultaneously create new coins, this process is called "mining". Miners pay performers, and for the listener, the content remains free, beneficially distinguishing the service, for example, from Spotify. Musicoin cooperates only with qualified authors and performers who can prove their identity by contracts with record labels, presence in social networks, instant messengers, etc. Its entry into the market can radically change the approach to paid music streaming, creating new conditions for healthy competition

Users around the world have already been engaged in musical mining for about a year. A high-performance computer with a set of modern video cards is enough for this. The cost of cryptocurrency is constantly changing, as it is traded at the large public exchange Bittrex, located in New York. In Russia, they still look for approaches to legal regulation of cryptocurrency circulation. It will be known whether they will be allowed for use in our country following the adoption of the relevant draft laws. On behalf of the President, the Government of the Russian Federation and the Central Bank should amend the legislation by July 1, 2018 as part of the "Digital Economy of the Russian Federation" program. Their task is to determine the status of digital technologies in the financial field, the concepts of "cryptocurrency", "token", "smart contract", based on the ruble as the only legal means of payment in the territory of the state, to establish the basic requirements for mining, including the system for registration and taxation of entities engaged in this activity, the procedure for regulating public attraction of funds and cryptocurrencies. Until December 20, 2018, the Bank of Russia together with the Government of the Russian Federation should also submit proposals on the creation of a sandbox - a platform for testing new financial technologies, products, and services on the basis of the Bank of Russia.

While they develop a domestic version of Musicoin in Skolkovo, musicians can try themselves working with the Fonmix service. Since March 2016, this platform provides background music broadcasting in public places and at enterprises (parks, restaurants, shopping centers, etc.) in Russia. All content (the player already has several hundred thousand tracks) is licensed taking into account interests of both users and rightholders. New tracks are added to the database almost daily, while it remains  relevant

To start using the player, you must register on the Fonmix website, sign a remuneration payment agreement with the All-Russian Intellectual Property Organization, download the program to a device using Windows or Android operating system and activate the key. The user gets access to his personal account, where he can choose any of the many music collections sorted by themes and genres. You can create your own playlists, change the order of playing songs, while a permanent connection to the Internet is not required. The rights of musicians are reliably protected: the system regularly sends information about the songs played for remuneration accrual to the the All-Russian Intellectual Property Organization data processing center. Right holders gain access to these data in their personal account on the website of the All-Russian Intellectual Property Organization.

AuthorArtemiy Reimich 12.03.2018


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