Historic bar and music venue for sale in cryptocurrency
The owner of Stone Jug, a historic restaurant, bar and live music venue in Carbonear, Canada, is accepting buyers using the cryptocurrencies Bitcoin, XRP and Ethereum.
Stone Jug owner, Bruce Branan, is accepting the three leading cryptocurrencies as well as 28 fiat currencies for the purchase of the historic bar and restaurant, priced at CA$6.8 million.
The venue has a capacity of 370 people across three floors, including a conference room and multi-purpose theatre, used for musical performances. Stone Jug hosts local entertainers for traditional Irish and Newfoundland music sessions each weekend.
The live music industry is no stranger to cryptocurrencies, or the blockchain technology behind them
The live music industry is no stranger to cryptocurrencies, or the blockchain technology behind them.
Blockchain technology is currently used by Ethereum-based platforms Aventus and Crypto.tickets to regulate and standardise live event ticketing. The same technology is also used by Ethereum platform, Viberate, a decentralised talent ecosystem for live music events.
The potential uses of blockchain technology in the live music sector extend to licensing, live streaming, marketing and fan-to-artist interaction, among others.
Music coins weather the cryptopocalypse
The companies driving live music’s cryptocurrency revolution have insisted the future of blockchain technology in music remains bright, as the market struggles to recover from a dip that saw more than US$550bn in value wiped off between January and early February.
Representatives of blockchain ticketers Aventus and Crypto.tickets and live music marketplace Viberate – all of which have seen the price of their coins plummet since the start of the year – tell IQ they are unconcerned about the recent fluctuations in bitcoin and other ‘altcoins’, saying the underlying tech is more important than the price of their tokens and market cap.
“We were always expecting volatility,” says Vasja Veber, founder and COO of Viberate, whose VIB token has fallen in value from an all-time high of US$0.71 on 4 January to $0.26 as of today (14 February). “That’s the nature of the market: When it goes up everyone’s happy, and when it goes down… well, people aren’t!”
Veber says it “would have been a problem if it was only our token that fell [in value], but everything was in the red. The new investors who bought in in December bought into a bubble, which has deflated.”
Aventus director and co-founder Alan Vey says he hopes the crash will encourage investors to “think about other facets of the technology” behind the blockchain. “I think in this big ride, this crypto journey, people haven’t really appreciated the power of the blockchain technology,” he explains. “So far, it’s been mostly speculation on the price of coins.
“So, for us, the downturn isn’t too much of a concern, as there’s still value in what we’re doing. It’s all about the fundamental value for us.”
“There’s a lot of market manipulation out there”
“The price of bitcoin does not affect Crypto.tickets as a business and its tokens,” confirms Egor Egerev, CEO of the Russian company, whose TKTX coin has fallen from $0.14 to $0.04 on the Yobit exchange since 14 January. Egerev warns against conflating cryptocurrencies and the blockchain platform on which they’re based, which has applications in ticketing, licensing and music rights.
“We should divide the crypto space into two independent spheres: cryptocurrencies and blockchain-based start-ups,” he says. “We often merge the two: most of us understand ‘crypto’ and ‘blockchain’ as the same. But in the future, this will change, and we will consider cryptocurrencies as just a small part of the bigger blockchain world.”
Annika Monari, Aventus’s other director and co-founder, says her company has so far actively tried to avoid inflating (‘pumping’) the price of its AVT token, which will be used to power the company’s ticket sales platform. (One AVT coin is currently priced at $2.30, down from an all-time high of $6.76 on 8 January.)
“Right now, it’s just a game,” she explains. “There are lots of coins out there with no link between the volatile digital asset [the token] and the underlying technology.
“For us, it’s not about focusing on the tokens, or worrying about the speculation on their price, but about creating that fundamental value.”
“There’s a lot of market manipulation out there,” agrees Veber, alluding to the ‘pump and dump’ schemes in which traders conspire to artificially inflate the price of fundamentally useless coins before ‘dumping’ them for profit – something highly illegal in traditional, regulated stock market trading.
“There need to be clear rules of the game to get rid of scam projects”
“If you have shares in stock X it’s illegal for you to spread false news and take advantage of the increase in price,” he continues. “We follow the same rules as public companies, as we see our token as a publicly traded commodity.”
There are, however, as yet no laws in most of the world compelling such self-regulation on the part of blockchain/crypto companies, and new coins continue to con investors out of vast sums of money with alarming regularity (the most recent is LoopX, which pulled an ‘exit scam’ earlier this week after raising $4.5m in investment).
“The cryptocurrency market lacks regulation,” comments Egerev, who adds that there need to be “clear rules of the game to get rid of scam projects, and to strengthen start-ups that do create new markets and business models using blockchain”.
Monari says that while Aventus believes in free markets and doesn’t want to see “everything completely regulated” to within an inch of its life, “we’ve seen a lot of people hurt by fraudulent token sales, so there needs to be some degree of red tape.”
Ultimately, says Egerev, the success of Crypto.tickets and other companies applying blockchain tech to live music will depend less on their coin price and more – as it should – on the quality of their offering. “Industry expertise and experience is more important than positive positioning,” he says, “so those who can present ready-to-use systems in 2018–2019” – such as Crypto.tickets’ blockchain ticketing platform for Kraftwerk’s recent show in Moscow, and the recently launched BitTicket, which has already partnered with several festivals in the UK – “will be the ones changing the industry through blockchain very quickly”.
“Some people are focused on getting best price possible for their market caps,” concludes Monari. “But we’re focusing on building our product, and the market will ultimately reflect that.”
‘Chinese Google’ Baidu eyes ticketing with blockchain platform
Chinese search engine giant Baidu has launched BaaS, an open blockchain platform designed for the “safe, efficient and inexpensive” trade of various items, including cryptocurrencies and digital tickets.
Baidu – which has been described as “China’s Google” and is the country’s most-visited website, as well as fourth in the world – says BaaS (Blockchain as a Service) is the most “user-friendly” blockchain service for businesses, and can be also be used to manage bank loans, credit cards, insurance and more.
The company claims the technology has already been successfully used to exchange and securitise assets, according to Russian website CoinSpot.
BaaS isn’t Baidu’s first blockchain-related venture: it has accepted payment in bitcoin for its web services division, Jiasule, since 2013.
Rival Chinese web conglomerate Tencent already has a blockchain platform of its own, while Alibaba – which has been steadily buying into the live entertainment business with the acquisition of ticketing service Damai and the launch of a booking agency and management company – is ploughing money into blockchain technologies for the food and healthcare industries.
Blockchain: the key to protecting IP in the live business?
Blockchain first came to prominence as the technology behind online currencies such as bitcoin. However, as more businesses become aware of its uses and possibilities, it is gaining traction everywhere. But what are blockchain’s potential implications for the live music industry?
Blockchain is often described as a “distributed ledger” system, but what exactly does that mean? In a blockchain, transactions (blocks) are verified across a network of users before being stored with a time and date stamp that cannot be altered. Each user in the network stores their own copy of each block to maintain integrity and transparency of the data. Later, related blocks are likewise verified across the network and then linked to the previous block, creating a chain. The system is secure because a would-be hacker would need to access each user’s system separately to make any change – this would mean attempting to access hundreds of thousands, if not millions, of computers.
Blockchain is a useful tool in situations where maintaining the integrity of information is a key priority and where transparency is also high on the agenda. Although it started its life in online currencies, blockchain is now spreading its reach to other industries, including fashion, where it is being used in the fight against counterfeits, and in real estate, where recently, for the first time in the UK, a commercial property transaction took place completely online using blockchain.
In the music industry, the UK, French and American collection societies (PRS For Music, Sacem and Ascap, respectively) are already working together on a blockchain in relation to International Standard Recording Codes (for recorded music and music videos) and International Standard Codes (for musical works). The aim of this blockchain is to improve the management of links between the two standards and in turn reduce errors and costs. Licensing transactions should also speed up as a result.
Blockchain is a useful tool in situations where maintaining the integrity of information is a key priority and transparency is high on the agenda
However, there are other ways in which blockchain can assist the music industry. For example, a songwriter can use their original song as the first transaction in a blockchain to prove that they are the author. The blockchain can then be used to show the chain of ownership of the song, including any assignments or licensing arrangements, allowing the public to see clearly where a song has come from. This will also act as a deterrent to potential infringers whose use of the song would be recorded in the blockchain too.
For live music, blockchain has the potential to change things for the better too. With the majority of tickets now initially being sold online, blockchain can be used to track the movements of tickets and prove to the end purchaser that the ticket is valid. It can also help to control the ticket tout culture that can surround the secondary market. Some have already caught on to this fact, including services such as Lava, GUTS Tickets and Aventus. Lava, still in the start-up phase, uses the blockchain platform ethereum as its base and is a primary and secondary market ticket sales platform which keeps tickets at their face value.
Online streaming of live performances can also benefit from the use of blockchain, with only the official stream being connected to the blockchain. The use of the blockchain would mean that the live stream itself and any future use of a related recording of the live performance would be transparent, with royalties passing to the artists accordingly.
So, blockchain is coming and seems likely to become a part of our everyday lives, from our money to our clothes to the music we listen to. And while the average music fan may not see or fully understand what is going on behind the scenes, it is important that those working in the music industry are aware of its capabilities, its possibilities and are fully prepared for its arrival.
Joanna Morris is an assistant solicitor at Stevens & Bolton. She has more than seven years’ litigation experience and has since 2013 been part of the firm’s intellectual property team.
Viberate, live music cryptocurrency, prepping ICO
Viberate – a blockchain-based ‘live music marketplace’ that aims to “do for music what Airbnb did for tourism” – is gearing up for an initial coin offering (ICO) of US$12 million worth of Vibes, the first cryptocurrency aimed specifically at the live music industry.
The ‘crowdsale’ of 200m Vibe tokens, which have a base price of $0.10, runs from from 5 September to 4 October, and follows more than $1m worth of investment in the Ljubljana-based start-up since April 2016.
“The main difference” between Viberate and other music-focused cryptocurrencies, says co-founder and COO Vasja Veber, “is that those services operate in the recorded music segment, whereas Viberate focuses on the live segment.
“We are not interested in the world of recorded music, royalties and copyright. It’s an interesting field and in definite need for help, and we hope that our fellow founders in Musiconomi, Voise, Opus and others will give the massive recorded music market a much needed kick in the butt and let musicians make money again by producing good music.
“[But w]hat we are interested at is giving musicians an opportunity to charge for their gigs in cryptocurrencies. We want to do for music what Airbnb did for tourism.”
“There is a clear need for an entity that would effectively and safely represent all those who don’t have a privilege of an agent”
In addition to allowing touring musicians to be paid in Vibes, Viberate – as detailed in its white paper – aims to offer artists, promoters and agents a blockchain-based alternative to what it calls a “heavily centralised” industry dominated by “a few major talent agencies”.
“Musicians need agents in order to land enough gigs to make a living, and most of the musicians don’t stand a chance of getting spotted,” it reads. “Only a fraction of a percent of all the world’s musicians have proper representation and are lucky enough to have music as their primary source of income. The rest are left on their own, struggling with exposure in a heavily saturated market, dealing with marketing, sales, networking, legal, taxation and debt collection issues instead of focusing on the creative part of the music business. […]
“There is a clear need for an entity that would effectively and safely represent all those who don’t have a privilege of an agent. Blockchain technology offers the best tools for this task.”
For event organisers, the platform gives promoters a helping hand in staying “on top of trends in live music” and provides them with a constantly evolving roster – which may also be supplied by booking agencies – of “interesting musicians”.
“A good event organiser in a busy city can organise up to three or four events weekly with several musicians on the line-up. Such frequency soon leads to the organiser not knowing who to book next. An event organiser’s product is a ticket, and their primary goal is to sell as many tickets as possible. To do this they need a good programme and a good ticket sales channel.”
“80% of all musicians in the world are unsigned … We want to be their agent, and we’ll offer them the tools they need to become successful performers”
In both scenarios, says Viberate, the solution is a decentralised, blockchain-based database of artists, promoters, agencies and venues that allows each party to communicate with, and book, the others at will, “regardless of genre, country, fame level or gig history”.
Commenting on the upcoming ICO, Veber tells Cointelegraph: “We don’t expect the big guys to jump on the bandwagon right away. But they were never our target group anyway, and we don’t expect Justin Bieber or Coldplay to be ready to accept Bitcoins or Vibes in exchange for their services.
“Our main target group has always been the underdogs: Local musicians, low-profile garage bands, who need a place to offer their performances to promoters and clubs. And those are usually younger people, millennials, who are quite fond of cryptocurrencies. They are our true ambassadors and there’s a lot of them. We estimate that around 80% of all musicians in the world are unsigned, meaning they don’t have an agent to represent them.
“Now we want to be their agent, and we’ll offer them all the tools they need to become successful performers and make a living by doing what they love.”
Hackers demand Bitcoin ransom after Qnect attack
Australian ticketing start-up Qnect has fallen prey to a cyberattack, with hackers threatening to release users’ personal information online if the company fails to pay a ransom in Bitcoin.
The Sydney-based start-up is used by societies at a number of Australian universities, including the University of Technology Sydney, Curtin University, Monash University and the University of New South Wales, to organise social events.
One former client, Sydney University Law Society, yesterday shared a screenshot of a text message sent to Qnect customers threatening to publish “your data”, including email addresses and card details, if a ransom is not paid:
[QNECT SCAM ALERT]If you have received a text this evening containing a message to this effect, we strongly advise you…
However, Qnect CEO Daniel Liang has dismissed the threat as baseless, saying in a statement that ‘RavenCrew’ “does not hold financial information or physical addresses – at maximum, this person had your email, phone number to SMS on and your name. With this information, the person won’t be able to do anything harmful, other than spam you – so just ignore, and he will lose his fun. Let’s make it boring for them.”
Confirming the company has reported the breach to the Australian Federal Police, Liang (pictured) adds that it appears the attacker “has not hacked our systems, but rather used a phishing scam” – or posing as someone trustworthy, such as an employee of Qnect – “to get remote access of a key employee’s computer, and then going through systems thereafter.”
He encourages Qnect customers to simply “ignore this guy, and just be wary not to open links from SMSes or email you don’t know who they are from”.
The Qnect hack follows similar incidents involving Coachella.com, in which a hacker stole website usernames and other personal information, and United Talent Agency, which was last month hit by a malware incident widely reported as a cyberattack.
4 ways blockchain can disrupt the live industry
While much has been made of the potential for blockchain – the technology behind cryptocurrencies such as Bitcoin – to revolutionise the recorded music industry, the same isn’t true in the live sector.
Articles by the major tech and business publications (Forbes, Fortune, TechCrunch et al.) have largely focused on implications for the online streaming of recorded music, citing the benefits of ‘smart contracts’ wherein the owner(s) of songs will be paid automatically for their usage. However, while wider adoption of blockchain may, as Imogen Heap suggests, throw a much-needed lifeline to musicians struggling with paltry Spotify pay-outs, it could also radically transform the (comparatively more lucrative) live industry…
In the same way blockchain databases monitor where a music recording has been used, the technology can be used to track the ownership of a paperless concert ticket.
Chris Carey, founder of Media Insight Consulting and the recent FastForward conference (at which IQ news editor Jon Chapple chaired a ticketing panel), suggests blockchain can facilitate the “legitimate resale of tickets by having a clear chain”. Speaking to IQ’s Eamonn Forde, Carey says by tracking secondary sales, ticket agencies could provide artists and promoters with a cut of each resale: “Tracking the ticket through its journey could actually create revenue at different steps. There is an argument to say that if you can monitor transactions through technology, the artist could get a share of the upside at every step of the way.”
Several yet-to-launch start-ups, including Amsterdam-based GUTS and the UK’s Lava, are already using the technology to bolster the both the data-gathering and anti-touting capabilities of paperless tickets.
GUTS Tickets founder Maarten Bloemers echoes Carey’s suggestion that blockchain can be used by artists to track ownership of a ticket, saying the technology “makes it possible to follow the lifecycle of a ticket from A to Z”. He tells Dutch paper De Telegraaf he had the idea for the company after hearing a discussion about black-market tickets on a radio programme. “Someone [on the show] said no one can guarantee the authenticity of tickets,” he explains, “and I immediately thought of blockchain.”
“We’re looking at a world where knowing the complete provenance of the ticket is a good thing,” adds Benji Rogers, co-founder and CEO of dotBlockchain Music (dotBC). “Unless, of course, you’re trying to hide something…”
Levelling the PROing field
Perhaps the most important live application of blockchain could be to give PROs a shot in the arm at a time when an increasing number of rightsholders are choosing to bypass collective licensing altogether in favour of collecting public performance royalties directly.
Rogers – unlike, for example, Mark Knopfler – believes there is “still a place for PROs to make large deals on behalf of artists”, but says they face the challenge of “not [being] competitive today”. (Little surprise, perhaps, when many are more than a century old: the UK’s Performing Right Society was founded in 1914.)
“They’re using tech not built for the size and scale of what’s coming at them,” he explains.
The Society of Composers, Authors and Music Publishers of Canada (Socan) recently became the first PRO to partner with dotBC. Eric Baptiste, the CEO of Socan – which represents more than 135,000 rightsholders and recently saw collections from live performances grow to a record high – said last month: “We are convinced that it is possible to address payment and rights inefficiencies […] that have been a drag on the entire ecosystem for far too long.” He added: “The encouraging work of dotBC has the potential to unlock enormous value for our members”.
Rogers says PROs making use of blockchain technology will be able to compete more effectively by offering a better service to their membership. Comparing PROs to trains running on different gauges of track, he prophesies that in future collection societies will “need to work on a common rail”: “If we build the perfect sound format [.bc], we build the rail and everyone can ride on same track.”
DotBlockchain Music, then, “allows [PROs] to work together while remaining competitive,” says Rogers. “They can then compete based on how good their accounting is, how good their data side is…
“We’re looking at a world where knowing the complete provenance of the ticket is a good thing”
Another potential application of blockchain in the live space is to enable artists and promoters to broadcast their shows live safe in the knowledge copyright owners are being paid.
Writing in IQ last year, Sziget Festival’s András Berta was enthusiastic about live streaming as a way to reach more fans, but said there are concerns about the complexities involved in licensing live streams. “In 2016, I think we still face a grey [area] when it comes to clearing streaming rights,” he wrote, “simply because the industry is far from being homogeneous. Different players hold different cards, and this can result in a losing hand in many cases.”
By using dotBC’s codec (.bc), which binds writer metadata to the track, for music files, Rogers explains festivals like Sziget will be free to live-stream on sites such as Facebook and YouTube – and artists able to sell recordings straight after the show – with the writers receiving owed royalties automatically.
Rogers, also a musician, relates an anecdote about his experience licensing live recordings. Following a concert in which his band played two covers (The Cars and Gram Parsons), he paid the Harry Fox Agency to purchase the rights to distribute a recording of the show. “We said we’d sell maybe 1,000,” he explains. “We gave them $2,500 and never heard anything else.”
There was, he says, “no itemisation or monetisation” on the bill – theoretically, the band could have sold 10,000 copies and Harry Fox might never have known. With blockchain, conversely, there is a “bulletproof digital asset” that ensures ownership of songs is always “anchored back to the writers”.
A new rights reality
Like live streaming, filming and distributing shows in virtual reality (VR) is being tipped as a new revenue stream for the promoters of the future, with recent research finding early VR adopters outspend the average American 2:1 on live events.
However, Rogers says VR is also currently a licensing nightmare, with a traditional sync licence – which grants the licensee the rights to synchronise music with visual media – insufficient for a live VR gig, where the setlist is liable to change.
“How do I license a VR concert,” asks Rogers, “if I don’t know what songs are going to be played?”
Rogers says that, “right now, sound recordings” – master recordings, typically owned by labels, as opposed to the copyrights to the compositions themselves, usually administered by a publisher – “hold supremacy”, but in future “PROs [performance rights organisations] are going to have to do a deal with the publishing side of things” to offer more flexible licences for new experiences like VR shows.
One company leveraging the blockchain to do just that – again backed by Imogen Heap – is Ujo Music, which aims to provide a “shared infrastructure for all music services”, independent of the traditional label/publisher/licensing axis.
“If we build a common language for music, we can scale the business infinitely”
While blockchain offers tremendous opportunities for promoters, artists, ticketing companies and PROs, Gregor Pryor, co-chair of the global entertainment and media industry group at legal firm Reed Smith, told IQ in issue 62 its actual take-up in live may stymied by the fact most people at the top end the top end of the concert business are actually making money.
“Live has probably been the place that artists have been running to when their digital revenues have been dropping,” he said in late 2015. “The live industry has been nowhere near as disrupted by digital as the record industry has – in fact, it has probably benefited. There has to be a reason for them to adopt it [blockchain].
“In the world of streaming royalty payments,” Pryor suggests, “there is much more of an incentive and impetus to adopt change. There is not any driving force behind change in live.”
However, as underlined above, much has changed since then. With growing unease around the state of the secondary ticket market, and the emergence of direct licensing and new, non-traditional PROs – such as Germany’s GWVR, which gives concert promoters a cut of the royalties from recordings – technology, as in so many other walks of life, may indeed provide the answer.
As it stands, music has “no common language,” concludes Rogers. “Email has POP3, Skype runs on VoIP [voice over IP]… If we build a common language for music – the perfect sound format – we can scale the business infinitely.”