THE IDEA OF ETHEREUM-POWERED “OPEN LABELs” P2P Royalty-sale for MUSIC RELEASES
#media #music #ethereum #crowdsale #tokeneconomy #dividends #OpenLabel #musicroyalties #fanbases #licensing #equitymarket #royaltytoken #EIP
Musicians represent the transformation process in the Music Industry.
They buy raw materials, in which we can include musical instruments and any kind of sound-processing hardware and software.
They outsource services to other operators (music lessons, rehearsal rooms, recording studios, mastering studios, graphic designers, videomakers) in order output quality content in digital format and promotional media for that content.
Then, they pay distributors like DistroKid and TuneCore to hand that finished content to streaming platforms like Spotify and Apple Music, who in their turn monetise again on listeners via premium subscriptions and data collecting. [For the moment, let’s forget the recent policy changes tests as described in this article]
Without independent musicians, companies like Fender, Korg, Vox, Waves, Native Instruments and retailers like Thomann would have to provide distributors and streaming platforms with original, emotional and “edgy” musical content, in constant flow and in large quantities. Possibly, provide an audience for it too, at a given point.
Independent musicians deal relentlessly with this economic endeavour in average once a year, in order to get their content out and mostly to maximise the chances of collateral work like gigs, tours, participation to festivals (which have their own break-even budgeting), with the hope of accessing some sync possibilities, revenues from publishing, or simply to have attract more students, if they teach. For sure, their business model does not rely on royalties from plays.
The digital format of music has thus become a capital intensive “utility” to attract other forms of work.
At the same time, listeners and fans create the buzz about new acts, share their material, organise it into playlists, but their social effort is not rewarded by the streaming platforms they subscribed to. An influencer, a famous blogger or journalist, or even the average facebook poster, contribute to funnel plays to songs, videos, album and playlists by “curating” it within their own narrative. See the 2009 UK Christmas №1 Campaign as a case study.
THE OPEN LABEL
The idea of Open Labels lay its foundations on a few basic assumptions:
- Independent musicians SHOULD monetise on their digital releases of recorded music.
- Every independent musician with a bit of dedication has a core-fanbase of people (10, 100, 1000) that follow him/her during live shows, share his/her content and from time to time provide opportunities or help with booking, logistics, videos, radio plays, and any sort of stuff.
- These core-fans often buy the musician’s CDs and merchandising, sometimes more in a supportive spirit than for actual use.
- Royalties are the ultimate valuable asset a musician has a certain degree of freedom to monetise on. They constitute a personal property of the creator, and any personal property can be sold via mediated or unmediated interpersonal agreements.
- Holding shares of a musician’s release (song or album) could be the ultimate incentive for fans to gather around him/her as contractualized participants in a “Open Label” scenario for a given song, album or catalog.
- As long as it is certified and built on a verifiable mechanism that satisfies the sale’s agreement, authorities cannot forbid musicians to privately sell (part of) the ownership over their creative work.
The right combination of traditional and up-to-date PRO Rights Ownership certifications (see Soundreef time-stamp service on the Bitcoin blockchain), the IPFS CIDs system, token crowd-sales or Uniswap, a dividend payable contract, and any basic html front end can easily allow that.
“3MILY” is the first single from my 10th album, written and recorded on a 4-tracks Tascam cassette recorder, during my staying at the Stone Oven House, a mountain retreat located in the Western Italian Alps, in August 2019.
release page: http://3mily.thisguy.io/
This time, I have decided not to go through the same TuneCore => Spotify cascade and test something new instead.
1000 “3MY” ERC20 non-mintable tokens were created, representing the song’s 100% royalty pool. The ERC20 Dividend Contract was made via Smatz.io and given a name followed by the IPFS CID where I had previously stored a signed Royalty Agreement featuring 1) the song’s Soundreef catalog 2) the Bitcoin blockchain time-stamp and 3) personal declaration. It costed me a little more in terms of gas, but it was worth it. I afterwards listed a first batch of 100 3MY on Uniswap and added some liquidity in Livepeer Tokens (LPT).
FUNNELING PAYMENTS INTO THE “3MILY” SMART CONTRACT
Despite the many issues in adopting contract templates offered by DApp/DAO providers which use previous versions of Solidity — or in alternative the challenge of writing up a dividend smart contract without having a `callDividends()´function looping through arrays of token holders — I believe what described above represents a pretty solid starting point to notarise and un-mediate music royalties split in a P2P way, from artists directly to fanbases.
Addressing the second part of the problem means finding ways to pay the contract (and the token holders) by exploiting the the piece of music associated to it.
I believe a fundamental step would now be asking ourselves what we want to monetise on: should we have people pay-to-stream to the song on demand? should we have them pay to access a 24/7 One Song Radio? should we leave it for free-listening and charge for commercial-use spot licenses?
As I’m approaching the practical side of this second part of my MVP, here’s some solutions I have found that could make sense
- Sablier.me protocol for temporary rental of the song or temporary Licensing (commercial syncs agreements)
- Matic.Network for pay-as-you-listen micro-payments. In this sense, I would recommend taking a look a what VideoDAC is putting together in terms of Ready App and UI.
- An ERC721 sale with a given numbers of NFTs representing life-time license to exploit the song for commercial use.
Feel free to get in contact with me via thisguy.io if you have further questions
Attali, J., “Noise: the political economy of Music” (1977)
“3MILY” Royalty Sale Agreement: https://drive.google.com/file/d/1Pghh2tsZ89xzH6cz7S1HHcmFm7gA2zOr/view?usp=sharing
Buterin, Vitalik (2018). A Next-Generation Smart Contract and Decentralized Application Platform. Ethereum Whitepaper. https://github.com/ethereum/wiki/wiki/White-Paper.