Published on February 14th, 2017 | by Amber Healy2
Musicoin: A Pay-per-Play Blockchain Aiming to Benefit Fans and Musicians
Streaming numbers are out for 2016 and, no surprise, it remains hugely popular, making stars out of previously unknown artists and turning the CEO of Spotify into the most powerful person in music.
But are artists, established or just starting out, reaping the same rewards? Are they getting richer as the number of streams gets higher and higher? We all know the answer to that.
Enter Musicoin, a new entry into the blockchain-will-revolutionize-the-music–industry camp, but with a twist: In addition to simplifying all the rights, royalties and copyright information via the use of smart contracts that other blockchains designed for music have touted, Musicoin will allow fans to determine how much they pay per stream of a song and every last fraction of a payment will go directly to the artist.
The trio behind Musicoin – developers Isaac Mao and Dan Phifer and musician Brian Byrne, formerly of I Mother Earth and the podcast Brian Byrne’s Manifesto of Mistakes, all co-founders—believe marrying the sharing economy with direct-to-musician payments will give fans and artists alike something to sing about.
Mao first started thinking about a project in music when he designed a pair of Bluetooth headphones that would stream and save songs within the headphones themselves and their dedicated cloud. After a successful Kickstarter campaign, however, Mao realized the regulatory and royalty-related loopholes he’d be mired in should he try to bring that product to market. Like so many others, Mao felt there must be a better way.
He studied SoundCloud, Spotify and other streaming services and, in talking with musicians about his headphones and the struggles he anticipated having with them (he’s since stepped away from that technology), Mao turned his attention to licensing and royalties and trying to develop a way to put musicians in charge of both their payment from streams and more direct control of their licensing rights.
Musicoin, which launched on Feb. 10, will give musicians an iron-clad smart contract that can’t be modified by anyone without their direct knowledge and express permission; it will pay musicians every time their song is played; it will be a streaming service and it will incorporate a cryptocurrency not tied to any one nation’s currency making it universal and functional regardless of where users live.
Musicoin’s player has a central “atomic concept,” pay per play, in which users will be charged one “coin” per play, but they can also leave a tip for the artists if they’d like. For the time being, of course, no one knows how much a Musicoin is worth because it’s a new currency, but the team behind the platform anticipates it could start out at the equivalent of one US penny per stream.
“We can assign a percentage of a payment to different writers or collaborators. That’s a fascinating thing,” Byrne says. “If you’ve got four or five writers on a song, how does that happen? Do you assign it to one guy on his account and then he’s left to distribute it, which would add a whole layer of problems to this idea? Dan and Isaac addressed that. It’s something that’s going to be so helpful,” because the smart contracts developed by the artist will allow all payments to be divided instantly and immediately relayed to the rightful owners as soon as a song is played.
“You don’t need a trusted third party to do that work for you,” Phifer says. That is, however, something labels are currently responsible for. “We’re not suggesting at all that we’d replace all the value those different organizations bring, but there are some things we can do more efficiently through this process,” especially because musicians currently have to wait months for payment to arrive in checks that don’t always clearly and precisely detail how many streams—and the price per stream—are represented.
And, of course, there’s the question of whether artists are currently receiving all the royalties they’re owed and, if not, where the rest of the money is going.
A platform like Musicoin “gives artists much more direct control over what’s going to be paid and they can come up with their own agreements on what things are worth,” Phifer says.” I think that’s something we can do that would be much more efficient.” It will also allow smaller labels, focused on finding and developing new artists, to keep their attention tied there, instead of more managerial and bookkeeping-related tasks.
As for obtaining Musicoin, people can obtain the cryptocurrency through mining and verifying data or, eventually, by purchasing portions of a coin. Byrne asserts that, once a person has some currency, it’s very easy to use. (The current worth of Bitcoin is around $1,000 per coin.)
“If I can do this, being a bit of a technophobe, anyone can,” he says with a chuckle. “I’ve operated on four different exchanges. It’s just copying and pasting, from one wallet to another. That’s the most difficult thing I’ve had to do. It’s pretty basic and not a hard thing to figure out.”
The team, again, anticipates each play of a song will be worth the equivalent of a penny, but that wouldn’t stop other developers for creating modifications to the Musicoin platform to allow people to buy streams in bulk — $10 a month for unlimited streams, $5 for access to a full album for a set amount of time, etc. “The goal is the artist will be in complete control” of how much their songs are worth, Phifer says. Some songs might stay at one coin, while others, like a full symphony, could be charged a higher rate. Additionally, there will be nothing on the Musicoin side of things that require a musician to remove his or her entire catalog from other streaming services and reside only on Musicoin.
“I have music sort of everywhere, all over the place. I don’t know what it’s doing. I’ve looked into it several times,” Byrne says. “For me, even at my age and limited understanding of blockchain and smart contracts and cryptocurrency, there’s nothing to lose, just wait and see what happens. If it’s completely transparent, it’s a far better model to use than the one that’s telling me absolutely nothing.”
Musicoin went live on Feb. 10 and in the lead-up to the release, Byrne contacted his friends in the music industry, from artists to producers and managers. “The reception’s been really good,” he says. “I think 85-90% think it’s cool and want to be involved, but you do have the friction or pushback from about 10%. I’m more than willing to explain, as best as I can, that it really is working and I want to do something that’s going to get back to the cats I’ve spent most of my life with who are scratching their heads wondering why they’re not making any money.”
Phifer, Byrne and Mao are not keeping back any of the initial coins purchased or obtained through Musicoin. They don’t want to be seen as profiteering venture capitalists who throw out ideas, keep some coins for themselves and, if it doesn’t work, they’re off to the next project.
“We’ve become sensitive to the fact that blockchain is a very trendy topic these days,” Phifer says. “We’ve become sensitive that people might question our motives. We’ve made a decision that, despite the effort going into it so far, over the last five months or so, we’ve decided we’re not taking any allocation. It’s more powerful to say there’s no way you can look at this and say we’re going to get a bunch of coins and disappear.”