 And we're live. Hi, I'm Daza Greenwood, a scientist at the MIT Media Lab, and this is one of our flipped classroom lectures for the upcoming Computational Law Workshop Course at MIT next week. And I'm joined by Mila, our teacher's assistant and practicing attorney and legal hacker in San Paolo. Hi, Mila. Hi, there, our pleasure to be here. I'm glad you could join us. And our lecturer is Vicky Nauman, who is the founder of her own consultancy and perhaps even more relevant for our course and our partnership with Open Music Initiative, a strategic advisor to the Open Music Initiative, which is a collaboration between Berkeley College of Music and MIT Media Lab. And we met actually at an Open Music Initiative through a strategic summit in New York City. And I was just so impressed by your fluency and the experience and the wisdom with which you described music licensing and the whole life cycle and context of that as a matter of practice that I thought it would be terrific if you'd be willing to share that with students in the course. And we're all very grateful that you've taken the time to prepare your remarks and that you have joined us. And so if you'd be willing to introduce yourself maybe to provide a little more context and dig right in, we're really looking forward to your talk. Excellent. Excellent. Well, I'm very happy to be here. And I feel like the music industry is going through one of its most exciting phases right now because we've kind of seen the dip from the digital upheaval. And now subscriptions are growing. Money is growing. Consumption is at its all-time high. And I'm all for greater efficiency in trying to improve the way the music industry works in a technological age. So just a little bit about my background. My name is Vicky Nauman. I started out in radio. And in the end of, probably at the end of 1999, when Napster was first around, I tried it out on my 14.4 modem. And it's like, OK, I want to figure that out. I want to figure out all of this. And I naively thought, all we have to do is license it and make it legal. And it'll be fine. It'll be great. Everybody will make so much more money. And I went to work at Real Networks at one of their first legally licensed services called MusicNet at the time. And I realized very quickly that it was going to be a lot longer than I anticipated. So now it's been an 18-year journey of all trying to learn all different aspects of this industry. And I want to tell you just a little bit about my background because I think it colors my perspective quite significantly because I see things from being both inside technological companies as well as working with music companies. So I started out and did the MusicNet and really tried to learn a lot about where. And I realized also very quickly that this wasn't just about music. This was about software development and technology. And I needed to learn a lot more. So I went back to KEXP, which was a radio station in Seattle that had gotten funding from Paul Allen and Bulkin. And we built out some of the first DMCA-compliant streaming services. We did live webcasts. I made music available on demand. I really got my feet wet there on reporting and requirements and licensing and contracting and how difficult and challenging that could all be. Then I did an MBA through the London School of Economics and NYU Stern and Oshisei in Paris. And I wanted to do more in the international landscape. So I was also in China doing licensing music back to iTunes and MSN at the time and learned a lot about how the international business structures work and think about US and technology and music licensing. And then I became really interested in devices. And I went to work at Sonos and started up and really ran their music partnerships program where we built APIs and integrated different services into the home. And that's where I really had a light bulb of once music is connected and running throughout your home, you just listen to so much more. And it's incredibly valuable. But I also learned a big lesson there about how little technology companies understand or even sometimes want to understand about the nuances of the music sector. And then I left Santa Barbara and moved to LA. And I started up and ran Seven Digitals US Business, which is a music platform based in London. And it's an API makes music available to third parties like Samsung and Microsoft and startups to create and innovate music applications. So it's very deep in the sausage factory of digital music where I learned everything about ingestion and metadata and all of the problems of identifying a song correctly in a sea of 30 million songs, the international landscape, and then just tons and tons of music licensing, all sorts of different models of downloads, tethered downloads, lockers, on-demand streaming, subscription streaming, ad base streaming, tethered to devices, hard bundles, soft bundles, DMCA. And I spent several years really trying to understand both the label and the publisher and the performing rights organization's sides as well as the companies that I was representing. And so music licensing is just this notoriously complex process. And so what I'm going to do in my talk today is to explain a little bit about why it's important and the value chain of music. And there's a lot that I'm going to tell you that I don't think necessarily we want to spend tons of time in because in music I have found that if you bite off too much, you can end up really regretting it because it's so complex. So we want to break it down to a couple of specific use cases that smart contracts and different ways of handling the key deal terms might be employed. And I'm excited about this because I feel like the Music Modernization Act that has passed is sort of a catalyst for a lot of modernization throughout the world in the music sector. And we need a lot of really good minds that are coming from inside and outside the music industry to modernize it and to take it to the next level so that the data that's being generated can be used. And I can't imagine a better place to do that than a group of people from MIT and the Open Music Initiative. Yeah, excellent. And so I'm really, really excited to be here. And we couldn't be more excited to have you, literally. It's time to set some context. And especially for people that, as you say, may be intelligent and well-trained and expert in technology or in entrepreneurship and startups, innovation, even law, many of us don't have any background in this industry or these types of legal use cases. And so this context is invaluable. And I've got my popcorn and I'm ready for the show. Excellent. All right. Well, I'm going to show some slides. And I'm going to walk you through a bit about the way the licensing process, the contracting, the business landscape, some of the business tensions. And then we'll drill down to a couple of use cases. And then when I'm in Boston next week, we'll be able to spend a little bit more time going through and discussing that in detail. So let's get going. Right. Can you see that? Yes. Music industry, value chain licensing and business landscape. Great. OK. So let's talk first about the value chain. And if you think about it as kind of two ends of the spectrum, on the one side, we have performing artists and songwriters. On the other side, they've created a song. And it needs both a composition as well as a performance for a music fan to be able to enjoy it. There's kind of a fantasy that is circulating that we all have experienced this, where we think, well, that's great. And in a digital world, the music fan hears a song. They pay for it. The music goes directly to the artists and songwriters. Everything is great. Lots and lots of love. And it doesn't quite work that way. That's the goal that many want to strive for. But we have to go a few layers deeper to understand the complexity of this, to understand why this idea of having something as simple as this is very, very difficult. So let's go into the recorded music. Dealing with recorded music. It's not with live music or anything else. So on the one side, we have performing artists and songwriters. They create a song. And there are music fans who want to listen to that song. On the master sound recording side, this is where there is a right for exploitation that has been created around the recording of a song. In the most traditional music industry, this would have been a relationship between an artist and a label. And the label would own the copyright and the artist would get in advance. The label would do a whole bundle of services. That still exists. But we also have an emerging trend where many artists are choosing to retain their own rights. And so they're just using an administration platform to release their music. And they aren't going through a label. This is a really big change that is causing a ripple effect throughout the industry. And it doesn't mean that labels are obsolete. In fact, I think that labels are probably more relevant than ever, especially those that evolve. But I think that the traditional deal structures are something that's probably going to be sunsetted over the course of time. On the other side of that song is a composition. And this is something that a songwriter or more often than not multiple songwriters have written. And traditionally they go to a publisher and the publishing relationship with the songwriter can be about exploitation. It can be about administering rights or also like artists, they can have their music just available in an administrative platform where they're retaining all of their own rights. There's also performing rights organization and that's part of the composition. And that is a performance right is essentially if you think of radio or music when you're getting your haircut. Performing rights organizations are really around the public performance of music. And so they collect a small royalty on behalf of the composers as well. Say Vicki, I suspect that you're advancing slides somewhere but on the screen share we're still on your title slide. Oh, really? Oh, let's see. So you can't see any of this. Well, we see your title slide on. Okay, now I see slide three. Oh, okay. Interesting. So it doesn't seem to be picking up the slideshow. Let me... Oh, maybe it did you go to full screen? Yeah, I did go to full screen. That's probably it. So I'm not sure why PowerPoint full screen and Google Hangout have some issue with each other but we'll work it out before next Thanksgiving. But in the meantime, could you maybe just keep it in this mode here? Let's see, try this. Does this work? Ah, yes, very good. I think, okay. I think I figured out what I did. Great, you're a peacemaker. Excellent. Okay, so here we go. So we have labels, publishers and PROs as key traditional stakeholders. We also have a new emergence of administrative platforms where artists and songwriters can house their rights and be able to control their own destinies in a slightly different way than they could before. There's also distributors and these are companies that sometimes also host house rights. Other times they are distributor within an entire major label and we have their own distribution system. And they make the music, the sound recordings available to the digital service provider which could be a brand, it could be a music service, it could be anyone who is digitally making music available to music fans. So this kind of shows the flow and a high level of all of the different stakeholders from the creation to consumption of music and all of the middlemen that we have in this industry that all serve some sort of important role. Now if we think about contracts in the music value chain this is, I've added all these other songwriters and publishers because it's very typical that a song will have multiple songwriters. It can sometimes, especially things like hip hop can have 20 different songwriters and contributors on each track. So it's incredibly fragmented. And when we start thinking about computational law and smart contracts it's important to look at the value chain and see well, where are the contracts that live in this industry? Well, let's go through that. First there's songwriters and they have to all decide among themselves who owns what. If someone has 5% and another person has 80% and there's a 15% that hasn't been allocated because they can't determine between two other writers who contributed more, then that's going to be a conflict and that needs to be resolved. But the songwriters themselves need to have agreement. And then each of the songwriters generally has a contract with a publisher or potentially an administrative platform. They also have each of the songwriters is signed with a PRO of some sort. So they have ASCAD, BMI, CSAC in the US, GMR. And so all of the songwriters can be signed to different PROs. So this means when there's a royalty that's due there's a split between all of the different stakeholders on the publishing side. On the performing side for the master the performing artist decides to either work with a label or work with an administrative platform for the song for the distribution exploitation of the song. So there's contracts there. In addition, the label and the publisher have to come to agreement in order to release a song commercially. So in the idyllic state that I presented at the beginning many artists are performing songwriters so they can create their own work and this is very simple. But this is much more typical of the way that musicians work now and the way that the industry works. So in addition to the label and the publisher having an agreement the label has to choose a distributor or decide to do their own distribution. And so then the digital service provider creates contracts for usage based on a business model between the label, distributor, publishers and performing rights organizations. And then last but not least the digital service provider, the DSP has to create a value proposition to the music fans. And the offering of what a jukebox in the sky the all you can eat Spotify like service it's very simple and very elegant for the music fan. They say, great, I pay one price and I get everything that's ever been created but you can see from this the complexity that goes into that as well as the user interface is incredibly difficult. And there's been a lot of discussion around smart contracts and blockchain and how can some things be simplified? And for the purposes of this exercise I wanted to give you all the background of what the value chain and the contracting looks like but there are certain, some of these contracts are 20 and 30 years old, they predate even the CD they may go back to vinyl. And so for the purposes of this discussion I wanted to give you this as background and roles but what we're really going to talk about is the DSPs and business models and how this licensing is done. We're not going to get into the granular details of the between songwriters and publishers and splits and all of that because that's just too deep in the weeds. So with that, we're going to move into what it looks like in the relationship between a DSP and rights holders. So licensing and rights ownership for commercial exploitation of music is absolutely core to the industry. I think of it as building blocks and who owns what and who wants to exploit that and what is a fair price. On the traditional music side of this, everyone wants money, they want fame and notoriety, they want fans to know who they are, they want their artists to break and increasingly they also want data. Data has become a really important leverage point because data is where we learn, where you're touring, where your fans live, where you should tour, how long a hit takes in order to reach its peak in a digital environment. It's about the value of play listing and so data, there's terabytes of data being transferred between all of these different stakeholders on an ongoing basis, but usability of that data I think is another really big opportunity is companies like Spotify have a huge data and analytics team and they make a lot of information available to artists and I think that a lot of different companies around the world have realized that they're under an avalanche of data and they can't use it and so, but they still want it because that's really how we know what works and what doesn't work. There is a natural tension in any industry between licensees and licensors. That happens because then you get the optimized price point and the optimized deal structure, but in music, the digital upheaval and when I became really excited about working in music, the digital upheaval just caused an absolute, falling apart of this industry for a good 10 years and just incredible chaos and a lot of what has emerged is this tech industry versus music industry power structure. And so there's enormous tensions. The tensions are not only around how and when to restrict and make available music in a technological environment and a digital landscape, but it's also really about music. Music. You know, on one end of the many people who might say, well, you know, the big tech companies, all they want is content to run through their pipes. They don't care what it is. They don't place a value on it. They just see themselves as platforms and presenting that out to the fans and so they're not there to determine value. The on the other side of that equation is traditional stakeholders belief that, you know, no one would be on your platform if you didn't have music and you didn't have entertainment and no one would be using your smartphone if they didn't have ways of entertaining themselves. But I think a really important nuance to the value, to the discussion about the value of music. And I'm just going to pause here for a second because I think it's, I want Mila to have a, to share a perfect example on her side, but the value of music is, it's really personal, you know, and there can be a song that I think is, you know, has brings memories back and has an incredible lifetime value to me and you may not like it. And so you may not have any value to it at all. And Mila, you had a really great example that I wanted you to share as well. The opportunity, Vicky, we were just discussing the other day, like how to measure the impact of music, how to measure emotions. They are all like a reason when you listen to your favorite song in a different context. And for instance, I was just walking down Oxford Street the past few months in London and there was this huge rock band. I mean, they could be anywhere playing, you know, in the world for like tickets and for money. And they were just having fun. And all of a sudden over like 50 people were around them and they were like playing for pennies, you know? And why is that so? Everybody was getting the chills and the goosebumps and everybody was stolen to music. And music has the power of like connecting people, setting a good vibe, making you like forget about everything that's going on in your life, either if it's bad and if it's good, it's even better when you have music on your background. So to make like, to get that right measurements out of music and what do they mean to people when they're listening to you? Like how to value, you know, music and plays and so on and so forth. Exactly. And I think if you think about that experience where happening upon a band, a really talented artist in the middle of your day, completely left an impression on you and that has tremendous value. And how do you do that in a digital environment? Is it about, you know, I mean, I talk to artists a lot and they say, you know, now, you know, they'll say, oh yeah, I downloaded your entire catalog on Limewire. You know, I really like your music. You know, the artists are like, oh, okay. Well, thanks, I guess. And so I think that there's, you know, as we start to create norms in a digital environment and we start to create payment structures, you know, we have a $9.99 per month, $120 a year that's kind of been placed as a price tag for consumers for the entire catalog of music that's ever been created. Now, some people might say, well, that's more money than I'm willing to pay because I listened, you know, I listened to radio and I would only buy like one album a year. So that's way too much money. And I spent all my money on concerts. Other people will say, wow, $120 a year, I used to spend $300 a month on music in my local CD store. So that's a bargain. And it's the same product and the same offering. But we're trying to come up with different constructs that enable consumers at a price point they're willing to pay that enable money to flow through this really complicated value chain and make it back to the people who created the music, the songwriters and the artists. So why don't I, I can jump back in here and just keep going and we can talk about these different business models because I think that is a really good and important transition because if we look at two different models, one is really about volume and the other is much more about kind of this premier exposure. So let's see, let's see. So I'll go back to my screen share. Okay, okay. So we have this, the debates about the value of music and how do we value music? So if we think about these digital service provider models this is really where there's an offer that's made to the consumer and that consumer is either enjoying music or they're paying for music, but there's some sort of digital experience that's being made available. So on the left side of the screen, we have licensors, we have labels, publishers, PROs, we have the licensee, which is the digital service provider and importantly they're the ones that own the relationship with the fans. So they're bringing to this negotiation a concept that they're available for the fans that they believe that they can reach. So if we talk about two specific models and there's a lot of them, but I just picked out these two for discussion purposes. The first is synchronization and this is when music is in a brand exercise. It's in video, it's in an ad, it's in a game and the concept behind it really came from advertising and movies where there's a synchronization between the sound recording and video. There's generally very few songs that are licensed and they have a very high profile position. So it could be a music that's in a film, music that's in an ad or a game. And generally the fee is high. It's a completely negotiated rate between the label and the publisher. There's no statute around this and this can range from kind of micro synchronization in a gaming environment to a multimillion dollar deal for a U2 song in a Super Bowl ad. On the other side of the spectrum is on-demand streaming and this is like Spotify or Deezer or Rhapsody, any of the other on-demand streaming services. And this is the opposite end of synchronization where it's a full catalog music. It's like the DSP has to license music from everyone from all of the labels, all of the publishers, all of the performing rights organizations in every country and you can do global deals to a certain extent, but there's local collection societies and there's all sorts of local labels and presence. So you end up if you're doing a global service like Spotify or Deezer, you're literally licensing tens of thousands of entities. And you're licensing from major labels, from independent labels, from publishers, publishing consortiums and digital service providers. So these are really two opposite ends of a spectrum of different use cases for music. And I think they're good contrasts because you see that the value here in a sync, if your song is chosen for a film, you might get a massive payment because that music is a core part of the film. That music is part of the mood, it's part of the scene, it is very high profile. And so in this environment, the norm of creating value and being able to have music extract the right value out of this media type, you generally have an agent and a manager and there's a very high rate and it's a one-time fee. And you get one of these and you're really, really happy. Everybody goes, everybody's trying to get their music in some sort of synchronization, but they're kind of few and far between. On the other side is on-demand streaming where essentially in the on-demand streaming model, you take all of the money from all the fans and you take all of the streams that everyone has streamed and you divide them and you come out with a 0.00456 cents per stream rate. And this calculation, it's a mix of statutory and negotiated rates. So the publishing under section 115 of US copyright law has, it's currently 10.5% and that is slated to go up over the next five years. So there may be some statutory rates, but on the label side, those are private negotiated agreements that are generally done around market share, but the value is really extracted out of the volume of usage. So people get really hung up on the per stream rate and partially I think because they see that their art and their music is worth more than 0.0045 cents, but over the course of time, unlike a download or even a sync that has a one-time payment, music can have life over decades and can continue to collect royalties over decades, but it's really, really small amount. And the difficulty with the old industry and this current industry is also that the volume of usage is what everyone wants. Everyone wants scale. Everyone wants volume of use because now the recording requirements, the data requirements have actually reached everyone far beyond their capabilities. Really makes sense out of the data and the reporting and these micro payments that are coming through digital service providers back to labels and publishers and rights administrators and then they have to parse it out and account on behalf of their artists and songwriters and then make a payment back out. It's really proven to be quite a challenge and one could argue that this industry has been building toward this for a long time, but I don't, as someone who's done a lot of licensing and having seen all of the different kinds of models over probably from 2005 to 2015, that it really wasn't until 2015 that the major stakeholders really believed that on-demand streaming was here to stay and it's largely because the handful of big services like Spotify and Apple and Google really started getting, taking hold. And so at that point, 2015 was kind of this aha moment, it's working, we finally have something that's working and then 2016 was a moment of, oh no, we're not prepared for this, we don't have systems in place. So some of this is being corrected by the Music Modernization Act, but essentially we have something that works and it's really complex on a macro level, but if we go down and we talk about, well, how could this be made simpler in that entire value chain, I believe that there are only really a handful of deal points that could be reflected in some sort of smart contract. You would very likely, because of indemnification and all sorts of other things, we need to have some sort of operating agreement that would be between different entities, but there could absolutely be a way to capture some of the core deal points in smart contracting. So let's look at that. So if we think about these key deal points and this I'm hoping we can dive into and spend more time next week, is again, we have licensors, licensees, and we have a couple of different models. In a sync world, what are those deal points there? What territory is this being used? What is the term? Is this a one year? Is this a perpetuity? What is the usage? What's the film? What's the ad? What's the game? How is it being used? There are always usage rules. There's also a fee structure. Much in synchronization can be on the front end where there's just a one-time fee that's paid out. Others can have a fee up front and then some sort of back end for usage or digital or other kinds of monetization, in-app purchasing, those kinds of things. And then there's always metadata and tracking. And so you might have a 200 page contract or a series of contracts between all the labels and publishers for sync. But in the end, most of your terms end up being on an MFN basis, a most favored nation basis. And so the contracts are actually quite similar with a short list of deal terms. And if we look at the on-demand streaming, which is again, the opposite end of the spectrum where this may be a sync maybe for five songs, this may be for 50 million songs where you have the full catalog of music licensed from everyone. And it's a mix of these statutory and negotiated rates. They're very similar in the sense that there's a territory. What territory is your music going to be exploited in? What is the term? Is this a one-year, two-year, three-year term? You know, another layer of complexity here is that ownership of music changes, labels by other labels, publishers sell to other publishers, individual songwriters, they, you know, they're splits. They may sell their splits and maybe may sell that to another entity. So keeping track of this level of a service between a licensee and a licensor, the underlying rights that any particular label or publisher may hold onto may change over the course of time. There's also functionality. How is the music being made available? Is it on-demand in the sense that a user can search and play a song on-demand? Is it a radio environment where there's a DMCA, Digital Millennium Copyright Act, Pandora-like experience where you can skip, but you can't necessarily search and play on a track-by-track basis? There's a business model, which is if you think about subscription services, Apple is subscription only, so they have a subscriber price and a trial. There's also, Apple has a radio-like experience, so that's slightly different. Spotify has a free layer for the interactive service, as well as a paid layer, so there's ad-supported. All of these are different kinds of business models that are baked into what that contract is enabling a licensee to do. And then there's a royalty calculation. So, you know, in the debate of the royalty pools, there's a lot of discussion around, you know, the fact that when we subscribe a music service, our money, all of our money gets aggregated and all of our usage gets aggregated, and then these things are divided up and paid out to all the writers. There's some discussion in some debate, well, should a longer song have a different royalty rate than a short song? Should the music that I listen to get my $9.99 every month? And because if I listen to one indie band nonstop for a month, that indie band does not get my $9.99, that indie band gets whatever this gross calculation is. So, there's lots of different models and lots of different ways to slice and dice this up and underneath all of that is metadata and tracking. And so, these are some things where I think that in a smart contract world, that you could start to look at this as business rules and usage rules and how could that be employed to take things to the next level and start using new technology. So, that's kind of what I've prepared. I have a quick summary which is, I think, food for thought for more discussion next week, but the first thing is really that licensing and rights ownership for commercial exploitation is core to this industry. However, the roles and the shifts and who does what for whom are undergoing massive change. So, it was unheard of to imagine even 10 years ago that there would be mechanisms for an artist to really release their own music and be able to get it to the top of a chart, but that's happening. But we also see things like, oh, look, Tyler, the creator, wow, he really blew up and he did it all on his own. Well, no, he got $600,000 from Apple. And so, instead of having a label, he had a company that he felt aligned with and that supported him to help break. And those are all different roles of what a management company does, what a label does, what a publisher does, what our own artist manages their career. Everyone wants money, fame, and data, but money and data flow are still very, very tangled and the transparency is starting to emerge. And all of this has really been the catalyst for the Music Modernization Act and that is addressing some very, very core issues around US mechanical licensing that are long overdue and I think that it's going to be the first of many changes that are being forced upon the industry to restructure so that there's a better understanding of who owns what and how to license. And the debates are going to continue about the value of music. I don't see any end to that really, but now that the streaming services are growing and money is flowing, there is more room for innovative new models and different payment structures and different approaches. And my last comment is really that the tanker in music turns very slowly and innovation around smart contracts and efficiency is best done in baby steps. So I think that you don't wanna look at the entire industry, the entire value chain and every nuance of it and try to flip a switch, start in areas that are more receptive and more open to innovation and where there's shared needs and shared interest around changing and focus on that and start in baby steps. So that's that. I'm going to submit all these slides so everything will be available. There's my information and thank you very much for doing this. You're welcome and really thank you for taking the time out of your busy day to share this experience with the class. So as it always happens when you're steeped in a topic as you are, a few acronyms kind of slipped in there and Mila and I have been trying to keep track of some of the more important ones. And Mila, if you don't mind stepping forward in your August role as teacher's assistants and organize, could you maybe ask Vicky to unblock some of the key ones? Yeah, would you please go back perhaps three slides? So we have also like a visual weight to discuss because besides explaining the acronyms, it could be good also to dwelling in a little bit more into why we're discussing that. Okay, do you want me to do the screen share? Yeah, let's see if we have it. So you mentioned a most favorite nation clause. Ah, yes, yes. And I think perhaps it would be good to explore a little bit of what NAMFM clause is and actually what it, whoops, look at this class. I can see myself. Oh my gosh. Infinite and beyond. Well, anyway, to discuss a little bit in further detail, most favorite nation clauses and why they're relevant in synchronization agreements. Exactly, okay. Yeah, oh my gosh, I don't know. I don't know why that's doing that. It's just an artifact of sharing the whole screen but you could either, there's a tab to just share the application. I'll share the application window. Okay, I'll do this. I don't know, I kind of enjoy the light show but. Oh, I feel like I'm in an infinity exhibit. Okay, can you see that? That looks good. Okay, yeah, so MFN. I remember when I was doing some of the earliest music licensing and I started getting, I started getting these clauses inserted at the late stage of contracting and what it basically is, is a most favored nation clause which essentially says that, okay DSP, I'm going to give you these terms and I'm going to have an MFN. So if anybody else, if you end up paying anybody else who has a comparable business to mine, then I get the best rates. I get the same rates. And I saw this in action because when companies would be trying to do their own licensing before they would come to me, they would say, well, I got this great deal from X label. And I said, okay, well, that's great, that's great. However, you probably are not going to be able to actually execute upon that deal because once you get the deals done with these other labels, they're MFNs. And so that means that the great deal that you just got will probably end up getting, you know, increased so that it's a way of ensuring parity on the rights holder side. And the impact on competition MFN causes cause is something that is still the area within competition law. I would say computational law, it was a mix of both because it is relevant, you know, when you're discussing deals and businesses and cases strategy. So this is actually a very important clause for people to be aware of. Great, was there anything else? I tried to not put too many acronyms in there, but is there anything else in this that you wanted to bring up? It might be worth just repeating and emphasizing DSP. There's a few references here, like we've got demand streaming and publisher. But the basic kind of canonical example nowadays would be Spotify, right? Or Apple Music, when we say DSP, is that right? Exactly, a DSP is really a digital service provider. And so it's any company that is licensing music to make available to consumers. So it could be Pepsi, it could be Pepsi if they're offering free songs, if you buy a bottle of their soda, it could be Spotify, it could be Apple, it could be any number of startups. So they're all considered a digital service provider in this environment of licensing. Oh, you're on mute. Sorry about that. Was there something else on the... Oh, no, MFN. Okay, yeah, I think those are the key ones. You did a great job of explaining what the acronyms were. So I think you pretty much kept pace with them as they came up, but MFN is worth saying. And I think the DSP is worth underlining as well. So just to contextualize this a little bit, looking at this as a spectrum, I think is going to be useful, especially for the when student projects start in earnest on day two and day three. And we start doing some hands-on exercises with smart contracting templates and services. Just having a clue of the difference in the environment between like this mass market licensing regimes that we see treated by the Music Modernization Act and in this sort of DSP context versus really, as you say, on the other end of the spectrum, the more bespoke, idiosyncratic synchrites is going to come up. And I think George Howard is going to be doing more of, I think he's going to use this anchor legal use case to in order to surface more of the kind of back and forth. And I think he believes some of the opportunities for exercising more creativity and maybe influence over in a place where innovation that students could come up with or others that are watching this could come up with, could take forward and maybe make an even greater impact. Although it is worth saying that the Music Modernization Act is still somewhat in play, as I understand it, I guess the RFP for the collective organization that will have a lot to say about how some of these standards and practices are actually deployed is in process now. And toward the middle of this year, I guess the Copyright Office will be making more selections and things like that. So I mean, that is very much in play as well. And that is a big part of how this impacts people on an everyday basis. I know for me anyway, my Spotify list is key. One other little just context center I wanted to mention is in the broader scheme of this course, although we've got an anchor focus on music, computational law is as broad and multifaceted as the law itself as this field and profession begins to adopt and transform to a digital footing. And digital assets are very much at the center of this. It's at once some changing the practice of law and the types of legal terms and traditional legal instruments that we need to evolve and adapt a little bit to deal with this new asset class. And it's also obviously changing the nature of law as legal services become digital services themselves and practices and legal instruments exist as code and behind a application programming interface. The law is also transforming even as the music industry and every other part of the economy and society is. And so valuation is just something I really want to underline that you touched on in the music context and valuation of digital assets. In this case, the example being a music in digital form which is an asset with value and property type that we can exchange rights to. It's a very good example. And my hope is that people can by dealing with and grappling with the business legal and technology context in the music scenario that we can start to extrapolate a little bit and deal with the different ways in which this is showing up in everyday life and across the economy. So, sorry, I know that was quite a few things in there and I think that you look like you might have been about to address one or more of them. No, I think it's really great because I feel like music should learn from other adjacent industries or completely different industries, shipping, what are other industries that have seen, music was definitely the canary in the digital coalmine of the first to really get disrupted from a distribution standpoint but how has technology been able to transform positively things like shipping lanes and other kinds of standards and mechanisms to create more efficiencies around the exchange of value. And I think that no one doubts that music to a music fan is a huge important part of their life. There's varying ranges of music fans but we're basically presenting them with constructs and saying this is how much we are saying music is worth. So that's what you pay and that's what you determine. That's what now we determine you, your value is of this music. And we have to start with some sort of commercial some sort of commercial mechanisms but I personally don't think that $120 a year reflects the value of music to me. Yeah, and Panos is so eloquent on this point from Berkeley and Open Music Initiative when he talks about music being so uniquely part of the human experience and being prehistoric and it's that word itself, experience. Like what is the value of experience that it's tantamount to life itself? Exactly, exactly. And I feel like now we have everything that we can possibly ever want and more here. And yet I think of innovation is going to be things that are experiences where we go out of our homes where we're experiencing something live but I think there's probably augmented things that our phones and our technology can do to enhance that. And we have to sort out all of these big tangles so that innovation can happen. Here we are. It's not possible if we're still in the weeds determining how to reflect a publishing split in a digital environment. Yes, here, here. So let me ask, is there anything that you might like the students that see this video and have time to reflect and digest between now and when you join us for your live session on the first day of class, Tuesday, January 15th? Any particular questions or thoughts that you might like them to be considering? I think a big part of this, I think they should think about the value of music and models and I also feel like there's a personal, I think everyone has a kind of a personal relationship to music and it may be that music is something that is superfluous to your life and that you just listen to it in the background and it isn't that important. But I think having an understanding and really trying to internalize that music is such a personal medium and we can't assume that our feelings and our emotions about it are the same as anyone else's who's in the same room. And but yet there is something that's really intrinsic there and what does that mean for, what does that mean for this very fast changing music landscape? What does it mean for fans? How do you express the value and express the worth of music in your life? How do you know to measure that can change the relationship about all these actors in China? How does it affect not only us as individuals listening to music, but if we could value like feelings or a better way of separating fees and revenues, how this would be important and impact artists, especially the independent ones. I think that's a very good point. I'm sorry to jump in. No, I think that's a great point and I think it's also like there's, I think on the spectrum, when people think about musicians and artists, they oftentimes think about the 1% or the half a percent and they say, they're making tons of money, but it's really that middle layer. I think of musicians as like there's a very, very top. They made money before they're still making lots of money. That's not where the problem exists. At the very, very bottom, there's a lot of hobbyists who might not care that much about making money, but they get exposure and they're able to have their music distributed and in the olden days, they probably didn't have that luxury of distributing their music and sharing it with anyone else, but there's a middle layer and that middle layer is independent artists and artists that have really, really strong followings, but their niche appeal. So it may not, you know, maybe someone who's a, you know, a cellist and experimental music where the people that listen to it are, they love it and the streams that they would create in the streaming model don't reflect at all the value between the fans. The tools that these kind of artists can use nowadays, they're totally inadequate and inappropriate for what they need because of how like revenues are split, you know, and what they're subject to when they're doing all these contracts we discussed. Exactly, exactly. And I also feel like, you know, we're, we've created a lot of tools for artists, but in the end, most artists, they, you know, they want to create art and they want to create music, you know, they don't want to spend all their time on so, you know, updating their social media. And so I do feel like, I do feel like there's a lot of really big brains in the industry right now trying to figure out how to best reflect the value of the relationship between the fan and the artist. And I just don't, I don't think we're there yet, but I think we're figuring out all the plumbing and then I see that layers of innovation can be built on top of that. Yeah, so to that end or in that context, maybe one aspect of the question of valuation of this music digital asset that people could reflect upon, students can reflect on and everyone, all of us, could be the, you mentioned the relationship, but basically the whole class of technologies now that are emerging, and I know we're certainly working on at MIT, you know, hard in the effective computing group and many other parts of the institute where we can basically provide deeper avenues of connection and feedback so that it's possible to get a better sense and even some data to indicate what's happening at the other end of what can feel like an abyss as opposed to a connection. You put your music, I mean, tools like Ableton and music production and DAWs and streaming services are terrific, but they're not complete in terms of, and perhaps this is part of what Mila was getting at in terms of completing the circuit with the listener who's in a sense who's essential for questions of valuation but also perhaps essential to the act of music making. When the tree falls in the forest and no one hears it, was it a valuable song at all? It's a little philosophical, but to the extent people can think about more ways to discover and invoke connections and then to maintain and be able to harness from them the type of data that would give us a better view into the experience that people are having, these types of solutions and capabilities may give us more opportunities and more options to come up with creative valuation frameworks and business models. Yeah, yeah, I think that's great. And I think that most art is not, when we look back in history, most art is not valued over the course of time by how popular it was. It's mostly about how groundbreaking and what that contributed to society and much of the art that now we think of as ordinary was heresy. And I definitely saw that in the music sector when the electronic music, which it was so great because the traditional sector was over here tangled up in all the rights and digital and the electronic music industry just kept going and going and going and festivals, everything just kept building and that really became an example of how to monetize and how to create these direct relationships with fans and it was mostly in a live environment and making some of the music available for free. And so I think a lot of the rules and a lot of the things that we've built so far are on scale. And so that means that those with the most popular music get the most money because it's about scale and volume-based royalties. But is there a different way to exchange value and express value? I think there probably is. And I've done some work looking at different models if you take a subscriber fee based instead of a big pool like the streaming services do if we said, okay, well, what if my 999 always went to all the artists that I only listened to? And we've looked at that and kind of done some modeling and the cost of administrating that and the cost of actually kind of having each individual individual person as a little business model. Like it's pretty bonkers how complex that layer that that adds to an administration process but maybe there's different technology that could be used that would reduce that complexity. This is a very, very, sorry. Please go on Mila. This is a very, very far reach but it seems to me Daza and going back on my memories from the last course let's hear that this could be a challenge that could be called by a merit order algorithm. As long as we have like the safe harbors and zones for like setting estimates and how the fee should be and then if you have a good merit order algorithm you could allocate data and just drive within this whole like network of artists and so on and so forth. Yeah, I take your point. Yeah. I think what Mila's referring to is a lecture we've had the past two years now Chris Barron from Drinker Biddle who does very complex, basically computational contracts in the energy industry for kind of distributed co-generated energy and you're figuring out what the price is going to be and the even like the order from which these plants will be like drawing and distributing energy is the result of a complex set of conditions and what I would consider prioritization and weighting and optimization and they call it merit order algorithm but it comes out about the same and yeah, so thinking algorithmically could be good if we could synthesize the data and imagine and then as Vicki mentions there's then the next several big steps of what would it take to actually collect, identify the right data and see what is realistic to be able to collect and preserve through the whole life cycle and the whole kind of date, the whole network so that we could apply the algorithm and then connect it back to things like royalties and playlist and everything like that but of course we are at MIT and we want to be thinking a little bit over the horizon coming up with ideas and sometimes on the merit of an innovation or a very good idea that can be a way to catalyze capital and to incentivize new action and innovation so go ahead everybody, think big thoughts keep grounded in reality as Vicki and our other speakers have shared it with you and let's see if we can't be a little bit creative and a little bit innovative in our projects. Great, I love it. Okay then, so I just want to thank you both for taking the time to make this an engaging conversation and thank you so much Vicki for being such a star contributor and for your willingness to come here in person and share your experience and your wisdom with us. We're looking forward to hosting you at MIT next week. That's great and on camera I'm getting a tour of the Media Lab, right? Correct, yep, I'll bring my little phone and I'll show you all around. Excellent, sounds good. Okay, so thanks, we'll see you all online, bye now. Bye.