IOTA’s Smart Contract Tackles Music Industry’s Payment Pain Points

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Veronika Rinecker

Editor

Veronika Rinecker

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Veronika Rinecker is based in Germany, studied international journalism and media management. She specializes in politics and regulation, energy, blockchain, and fintech. Since 2017, she has been…

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Last updated:

August 13, 2024 02:17 EDT

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The Berlin-based IOTA Foundation launched a new platform designed to streamline music intellectual property rights (IPR) management, simplifying the complex process of securing and distributing royalties.

A recent blog post (Aug. 12) announced IOTA’s partnership with Musika Peripherika, a Creative Europe Innovation Lab project. This collaboration yielded a prototype seeking to address the complexities of royalty distribution within the music sector.

This prototype utilizes DLT, smart contracts, and NFTs to ensure fair compensation reaches artists, songwriters, and rightsholders promptly.

Transparency and Efficiency: Addressing Industry Challenges

A Smarter Approach to Intellectual Property Rights is sorely needed. The music industry’s complex rights structures often involve numerous parties and diverse contractual terms. This complexity often leads to delays, errors, and disputes in royalty distribution.

Additionally, identifying and tracking musical work usage across various platforms and territories pose a challenge for rights holders. This lack of transparency erodes trust and hinders industry efficiency.

To tackle these issues, the IOTA Smart Contract system for managing IPRs was created as part of the European Blockchain Pre-Commercial Procurement.

This prototype uses IOTA Smart Contracts (“ISC Chains”), IOTA’s Digital Identity Wallet, and NFTs to manage rights more transparently and efficiently, automatically handling royalty payments and contracts.

Additionally, the system uses a technology called the InterPlanetary File System (IPFS) to securely store contract information in a decentralized way. This means that data is stored across multiple computers instead of just one place, making it harder to lose or tamper with.

To make sure only authorized people can access the system, IOTA uses decentralized digital identities (DIDs) that are verified and secure.

The Road Ahead for IOTA’s Smart Contract Technology

Looking ahead, IOTA plans to integrate with the Open Rights Data Exchange to enhance data management and streamline intellectual property tracking within its IPR marketplace.

This initiative aligns with the EU’s broader efforts to leverage blockchain technology for secure and transparent cross-border services.

The IOTA Foundation’s selection for Phase 2A of the European Blockchain Pre-Commercial Procurement, focusing on both Digital Product Passports and IPR management, underscores its commitment to developing practical blockchain solutions that meet stringent EU regulations and address real-world needs.