Ethereum Smart Contracts

NFT technology derived from Ethereum was chosen due to the relative ease by which license ownership could be tracked and content creators could be compensated when a Non-Fungible Token integrated Play on Demand license was transferred. Smart contract code already exists to provide a commission any time the NFT, in which it resides, is sold. This proof of principle demonstrates that the Fair Trade Music Distribution Group can create similar code specifically for Play on Demand NFTs. When a NFTiPoD is sold, its smart code will send a percentage of the sale, to its owner, to the selling entity as a commission, and to the content creator. When the NFTiPoD is validated, both the content creator and streaming provider can be sent a Play on Demand count notification and the content creator can be sent a stream play payment, if so desired, by the streaming provider.

The original intent, when NFTiPoDs were conceived, was that the content creator would be able to set all of the percentages for owner, commission and creator to create a competitive marketplace among creators. However, upon further consideration, it became clear that this mechanism could also be used as a vehicle by NFTiPoD retailers to pressure content creators into granting them a larger share than the commission. So, with regard to the NFT transaction, the current line of thought is that 89% will to the owner, 1% to the creator (remember that the creator is always the first owner) and 10% as a commission to the selling entity. As time goes on, discussions may modify these values, but the intent is to make sure that the content creator gets the largest share of the first transaction, that being 90%, and that the owner gets the largest share of any later transactions, with the content creator always getting 1% of all transactions.

Smart contracts are the business end of Play on Demand, handling the details, so that streaming providers and content creators don’t have to worry about it. Listeners can make purchases, confident that their favorite musicians are receiving fair compensation for their work.