Tokens For Smart Royalties and Freelancers

Digital Citizenship
March 10, 2020

Tokens For Smart Royalties and Freelancers

Blockchain networks like Ethereum offer new ways to track ownership and licensing for content through smart contracts.

Key Insight

Blockchain networks like Ethereum offer new ways to track ownership and licensing for content through smart contracts.

Why It Matters

Smart contracts are self-executing agreements in which the terms of the agreement are directly written into lines of code. In the music industry, for example, a smart contract could entail that every time a song is streamed, a small amount of money would be automatically sent to the artist from the listener.


Blockchains like Ethereum form the foundational infrastructure layer for new, low-friction ways to automate royalty payments for digital intellectual property. The Open Music Initiative (OMI) is a nonprofit consortium with members such as Facebook, IBM, IDEO, IHEARTRADIO, Netflix, Pandora, Sony, and Spotify. Based out of the Berklee School of Music, this initiative is focused on developing standardized open-source protocols and APIs for the music industry. Blockchain is a key part of the strategy.

Meanwhile, the KODAKOne platform helps photographers manage the digital rights of images using blockchain technology. The platform works by recording ownership and creation of the images on a blockchain ledger, and then a web crawling service scans websites to see if a copyrighted image is being used.

News and media organizations may also have new opportunities to use smart contracts, digital intellectual property rights structures, and micro payments—and potentially revisit an economic model adopted by the news services on CompuServe in the 1980s. In that news structure, readers paid per view for articles, including paying extra for images. At the time, CompuServe offered high quality journalism that was easier to access and navigate. Ultimately the service failed because of the arrival of free, high quality journalism and free search services such as Google and AOL.

What’s Next

Ownership of digital assets is evolving, with a growing movement in favor of content creators holding the rights to their content. In Europe, for example, GDPR legislation gives people greater ownership rights over the data they create, no matter what platform it is created on.

We expect an increased demand for platforms that honor this ownership model, and also those that compensate creators for the engagement they drive on the platform—a shift that would affect creatives like musicians, photographers, videographers, writers, and others.

The change in ownership rights would be the equivalent of Instagram directly paying popular content creators to host them on their platform—it’s a departure from the current model, in which Instagram does not need to pay content creators, ostensibly because of the free service the platform provides. Instead, content creators are paid by brands that want access to the creators’ followers.

The Impact

Musicians may well be the first to publish content on platforms with smart contracts that remove intermediaries such as management and distribution companies. This could prove successful because of enduring consumer demand for music and the promise of more revenue for artists.

News platforms will be fast followers, specifically for video and photo libraries—but they may struggle,because journalists tend to have more elastic followings than musicians or other artists. Regardless, there will likely be changes in methods of digital ownership and licensing playing out across all creative industries.


Associated Press, Ethereum, Getty, KodakOne, Mycelia, Open Music Initiative, Reuters, Facebook, IBM, IDEO, IHEARTRADIO, Netflix, Pandora, Sony, Spotify, the Berklee School of Music.