This year we’ve seen a growing interest in blockchain technology from FinTech companies and governments. However, the power of this technology is also being harnessed for use in other industries. PeerTracks, for example, aims to create a music service that connects fans and artists like never before. Through the MUSE blockchain, artists receive 95% of sales income. Smart contracts ensure funds are delivered to the artist or other entity for copyright purposes. I contacted Cedric Cobban, co-founder of PeerTracks, to learn more about how this system aims to reshape the music industry.
How long have you been involved with cryptocurrencies and the blockchain?
I got into Bitcoin in 2011 for ideological reasons. I loved the idea of a currency that was independent from any government, bank or any other central entity. Only in 2013 did I realise it was a technological marvel that can and will be applied to many, if not all, sectors of the future economy.
What was the inspiration behind PeerTracks?
My partner Eddie Corral and I both have different reasons for founding PeerTracks. For me, I had been following the cryptocurrency space for a while when I noticed some artists were talking about creating their own cryptocurrency. This required them building their own blockchain, getting miners on board and getting their coin listed on exchanges. Quite the barrier but the main problem is that the value of their blockchain/coin would not necessarily track the popularity or success of the artist’s career. I knew there was tremendous potential for both talent discovery and fan engagement to be harnessed through artists having their own crypto-token. It was just a question of figuring out two things: first, how to make User Issued Assets simple to create and trade and second, having the value of those User Issued Assets track the career of the artist that created them. Thanks to Dan Larimer and the large community that follows him, we figured out a way to do all of that and then some!
PeerTracks never had any intentions of being simply another streaming or retail platform. Nor did we aim to become one of the hundreds of music discovery apps! No, we wanted to make a real splash and change the way fans and artists interact with each other in a fundamental way. For that we needed a blockchain – which is where MUSE comes in.
The artist shows up to PeerTracks, creates his profile and can start uploading content. In order to monetize his account, he must get verified, meaning PeerTracks will verify the user’s identity to ensure he is who he says he is. Very similar to how other streaming platforms work.
Having a verified account means you can:
- Get paid when users stream your content
- Put your music up for sale (retail/downloads) at the price of your choice
- Create your own limited edition cryptographic Token
- Create a smart contract for each one of your songs
- Start receiving tips and get patrons
Most of the heavy lifting is done by the MUSE blockchain. PeerTracks merely acts as an interface to MUSE and is the music app that actually stores the audio files to be delivered on request to its users.
So when an artist inputs the copyright related information of a specific song he is uploading on PeerTracks, that information is not stored on PeerTracks’ servers at all, but is actually written as a smart contract on MUSE. This smart contract has all the information as to who must get paid what amount or percentage on a song sale or stream and in different jurisdictions. It also contains machine-readable licensing information — removing a lot of the complexities preventing artists from monetizing their music by letting others use it. That information could be as simple as “To use this song for X, send 50$ to here. To use this song for Y, send 1000$ here.”
It’s important to specify that these smart contracts are written to an open network (the MUSE blockchain) allowing any competing service to read the information and make use of it.
Finally, when a PeerTracks user decides to purchase a song, the funds are sent through MUSE directly to that smart contract, which knows exactly what to do with the funds. PeerTracks sees this transfer of funds on the blockchain and allows the user to download the specific audio file related to that smart contract.
What can artists expect to be paid relative to other music services?
The artist retains 95% of the income from sales. The funds are paid instantly though the MUSE blockchain. Funds don’t go through PeerTracks at all, they go from fan to artist direct[ly]. PeerTracks gets paid its 5% fee at the same time as the artist – we hold no funds, we receive them just like the rights holders.
PeerTracks only uses BitUSD, and the digital currency is widely misunderstood outside of those within the bitcoin community. Do you think this will affect artists’ and/or listeners’ interest in PeerTracks?
No. This is all under the hood. Users don’t need to care that they are using a blockchain. When they fund their accounts, they are credited an amount in USD, whether that’s a VISA_USD, an APPLE_IOU_USD (like itunes gift cards) or a bitUSD will not have an effect on the user experience.
Using BitUSD means that our users get to experience all the benefits that come with crypto (in this case, instant global royalty payment splits) without the volatility associated with cryptocurrencies or the need to learn a new denomination (is 0.00017 BTC a bargain or a ripoff?)
We know that PeerTracks isn’t aiming to be a simple streaming or discovery app. Yet given the market dominance of music services like Spotify, Google Play and YouTube, how will you get the PeerTracks name out there?
Our added value is unique. Artists won’t come to PeerTracks just because we offer music streaming or retail. Aside from them keeping 95% of their sales income, they will come to PeerTracks because we can get them paid instantly. They can set up the smart contracts for each one of their songs from our platform and insure each party is properly and transparently paid his royalties. We are also the platform from which they can create their Tokens – a new tool for discovery and fan engagement –, which we will cover in greater detail below.
For the consumer, it’s the place to discover new music and potentially benefit from finding it early.
It’s also a place to purchase music that has less overhead than the competitors, meaning music will be either A. priced lower, or B. priced the same but with more money going to support the artists they love.
I am particularly excited about the Artist’s Tokens feature, and it seems this is the most apparent difference from other sites. Can you explain a bit more about those tokens? Why would artists, particularly established ones, utilize this rather than run their own separate fanclubs or exclusive deals (e.g. through their own website)?
Although it requires time, effort and money to do, an artist could create tokens on his own database and sell them from his own website. The value comes with gathering everyone at the same place. Analogous to a shopping mall, where multiple merchants attract various types of consumers, our users are here to browse through all the artists and all the tokens to see if anyone of these are of interest or undervalued.
On top of that, MUSE is a decentralized exchange. You don’t need to leave the trustless network and head to an external crypto exchange (or even ebay) to sell some of your tokens. You can place your sell order right there on MUSE from our interface.
When or how do you plan on releasing?
PeerTracks is launching in 2 phases. We’ve recently realized that we have a product within a product, which is a prerequisite for the full-blown PeerTracks music app, that can be a standalone platform. We are currently branding it and can only refer to it as “PeerTracks’ first product”, which is phase 1 and can be released in the first quarter of 2016.
This is a website that allows anyone – not just musicians – that has or wants to create and engage a loyal fan base and/or get discovered, to do so. It is a platform that allows the star to create and sell his own tokens as if he were selling fan club memberships. From the site he will be able to reward his biggest supporters with special perks and privileges – whether it’s in the form of simple attention to free stuff like advertiser giveaways.
Phase 2 is connecting the music centric app (PeerTracks) to the standalone not-yet branded token-centric website we just mentioned. PeerTracks will be a lightweight music-streaming app that focuses on its core functions: music streaming, playlist creation, music retail, music discovery through the tokens and royalty/smart contract related interfaces. It’s too early to say what the official launch date of PeerTracks will be since it depends on the successful release of PeerTracks’ first product.
Both products are nearing completion; PeerTracks requires the first product to be fully operational before we can integrate them. Having more moving parts it will require more time and user testing before we can launch it publically.
Images courtesy of PeerTracks