IOTA’s Smart Contract Tool 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 03:08 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.

According to the foundation’s blog post from. Aug. 12, IOTA partnered with Musika Peripherika, a Creative Europe Innovation Lab project, to develop a prototype aimed at improving royalty distribution in the music industry. The prototype utilizes distributed ledger technology (DLT), smart contracts, and non-fungible tokens (NFTs) to track music usage, manage IPRs, and automate royalty payments.

Making Intellectual Property Rights Smarter

The music industry struggles with payment transparency and rights management. Complex rights structures, multiple parties, and diverse contracts hinder timely and accurate royalty distribution. Additionally, tracking music usage across platforms is challenging, leading to a lack of transparency and industry distrust.

To tackle these issues, IOTA’s prototype for managing IPRs was developed 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 prototype 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.

New Integrations Planned

In the coming months, IOTA plans to integrate with the Open Rights Data Exchange to improve data management on its IPR marketplace, which will improve the tracking and verification of intellectual property. According to the blog post, IOTA will also enhance smart contracts to dynamically respond to real-world events, increasing contract flexibility.

The foundation also aims to support a broader range of creative works and industries, as well as refine the user interface for a more intuitive experience.

EU Invests in Next-Gen Blockchain

Through the European Blockchain Pre-Commercial Procurement, the European Union is promoting and investing in research to develop new blockchain solutions that comply with strict EU regulations. This project builds on the existing European Blockchain Services Infrastructure (EBSI), which aims to “deliver EU-wide cross-border public services using blockchain technology with the highest standards of security and privacy”.

In 2023, the European Commission selected the IOTA Foundation to develop and test the first prototypes of two use cases on a larger scale: Digital Product Passports (DPP) for the recycling of electronic devices and plastics, and IPR cross-border management for creative works. Both solutions have been successfully tested and are now ready for deployment within the IOTA ecosystem and its partners.