Many companies are saying they are going to stream music via the Blockchain, but PeerTracks has actually been doing it for months already. PeerTracks pays rights-holders, at minimum, 1.5 cents per stream, while other services are paying rights-holders a small fraction of a cent. Furthermore, PeerTracks pays those rights-holders within 24 hours, unlike many of the performing rights organizations that take six months to pay rights-holders.
PeerTracks isn’t only indie music as Matthew Knowles’ Music World Entertainment with Destiny’s Child, Solange and more from his extensive catalog, was one of the first notable companies to get on-board. Talks with major publishers and other licensees are currently in the works, per my chat with PeerTracks co-founder Cédric Cobban. Cobban and partner Eddie Corrall also have a blockchain radio feature in the works for PeerTracks.
Simply put, PeerTracks looks to be a leader within the music industry revolution that has been going on since the popularization of monetized streaming. PeerTracks’ business model looks to be the ideal future of how music content owners (artists, writers, labels and distributors alike) will be paid for their work. All the while, content-owners are not the only people benefitting from PeerTracks as listeners themselves get free music-streaming with no subscription fees and ad-free listening. Thus, a win/win for all parties involves.
Cobban addressed this and more within our recent phone chat, while more information on PeerTracks can be found online at www.peertracks.com.
A look at the artist side of the Peertracks business model.
For somebody besides me, who doesn’t known anything about PeerTracks, how do you like to describe it? Cédric Cobban: Oh, that’s a good question. We’ve tried to build an entire new ecosystem for music. We’re kind of reinventing the supply chain for music.
Well, how did you first become interested in virtual currency? Was there a particular company or person that got you interested in it? Cobban: For me, personally, I was ideologically inclined towards the idea of decentralization, so less concentration of power, and a “power to the people” kind of thing. I stumbled onto Bitcoin from my newsfeed in 2011. I thought that was really interesting, the concept of it. Money is pretty important. It controls half of every transaction in the entire economy, which is not negligible. I got interested from that perspective and then later on, I noticed that it was a technology that could be used for a multitude of other things that are in digital like applications, social media networks and I stumbled upon music.
Was it music all along that you had the idea of connecting your knowledge of virtual currency to? Cobban: Yeah. It started with music. It was just a little idea perhaps we could create a token that would be tied to a band so that as the token rises or drops in value, we could tie it with the popularity of the band. That was our first idea in the very early days. Then when time went along, we really pivoted and we changed the project over what the focus of the company was to really tackle the royalty problem and the fact that there’s a bunch of databases all out of sync. The blockchain just seemed to be a really perfect solution for that specific market.
It was one of the markets that got hit the hardest from the peer to peer technology when that stuff came along. Then the torn thing, it looks like the Band-aid or the solution would be peer to peer technology but that tackled the payment side, not just the distribution of music side. Fight fire with fire kind of thing.
What was the first artist that came on board and was supportive of your company? Cobban: The first supporters were really technological people, people from the crypto space. Then we had different people interested so do-it-yourself artists that were interested in showing some support. We’re really in the catalog acquisition phase so we’re trying to, instead of taking the approach which is kind of like the free for all like SoundCloud, where someone comes in and uploads his music, we’re taking an approach that will be more beneficial in the long term, basically stocking of the shelves.
We want to have a ton of music on the website before we're even appealing to the DIY artists. You need to have a ton of listeners in order for them to make a living from their music. We’re trying to go the B2B route, going to different labels, different publishers around the entire music industry to tell them, “Hey, we just built this really cool system that’s very efficient. There’s not that many middlemen. You get streamed. You get paid.” That’s really our pitch to start acquiring a whole bunch of music.
When I say “acquiring,” we’re not buying it. We’re really just telling them about it and they can come in and put their music on it. From that, now we’re going to start to approach the DIY crowd, “Hey, check this out, a website that gets streamed and paid an immediately.” It would be easier to answer this question when we have those DIY guys coming on board.
Now, here’s a look at the fan’s side of the Peertracks business model.
Your royalty rate, that is one of the things that makes you guys stand out from everybody else, the fact that you’re able to pay such a higher royalty. How is that? For example, why do you think some of the other streaming-related companies aren’t able to pay such a high royalty? Cobban: Yeah, it’s amazing how much funds are actually there when you remove all of the middlemen, not that all middlemen are bad. They’re very essential in the current infrastructure of the music world, but you have to have some people to distribute your music. You have to have different agencies that will check on your behalf to make sure that you are streaming in certain places of the world and then they collect the funds for you, send it to a bank. The bank is also a middleman in our book, so they're taking a fee for their services as well.
You have a whole bunch of different actors touching the music and touching your funds before they get funneled back to the rights holders. Naturally, everybody taking a cut means that you have very, very little at the end. If it wasn't for them, you’d have nothing so they're very useful in this ecosystem.
What we’ve built is something that’s a direct to fan type of situation. The artist comes in, uploads his music through the blockchain. It’s picked up by PeerTracks, the streaming platform, so right now nobody did any action. It was just an upload and the companies themselves, they see that there is new content. Great. They pull it, they start streaming it and as soon as you’re streamed, that registers on the exact same blockchain and the blockchain itself is sending out the royalty to the rights holders.
In the entire cycle, no human has ever touched money so that means nobody is taking a cut. It’s all software and nobody was there to distribute your music, either. It’s really a pull system. If a company says, “Hey, I want to use this track”, then they’ll just pull it into the system instead of having a third party pushing it to them. That would be why our royalty rates are so much higher because nobody is really touching the money. The only one receiving funds is the rights holder. That’s it.
To be clear, anybody, any artist of any level, can be part of your service... Cobban: Precisely. Right now, we’re in the invite-only phase, but we don’t have a limit. If they follow the procedure, it takes a little bit of time for us to make sure you’re who you say you are. We want to make sure we vet people properly before we let them... We don’t want a fakery artist coming on-board, so we want to vet them and then we put them on the site. It doesn’t matter if they have two followers or a million. Of course, you’ll probably hear our developers scramble priorities, depending on who contacts us, but no, everybody can sign up and come on into the system.
The next phase, what we’re really working on are the tools to make the vetting even faster and more streamlined. Not to go into too much detail, but we want to have a system that everyone has their reputations for, so the vetting could kind of be flipped to the wayside just because of this score. If you have a score above X, odds are it’s (a) 99.99 percent chance that you are in fact who you say you are and that would streamline the process immensely. That’s further down the roadmap, what we’re actively building right now.
Here’s a recent talk conducted by PeerTracks’ Cédric Cobban.
Do you have a target date for when you’re getting out of beta mode and altogether, do you know what 2019 looks like for the company? Cobban: 2019, yes, you will see a much larger catalog on the interactive side... Two things: first thing will be interactive side repopulated with a lot of music that are household names. We will have the portal that streamlines the DIY upload so it’s very, very easy for someone who just can do the cell phone. That’s where most of the internet traffic is today. It’s people creating mixes and just tinkering with their audio stations and then voila, they’re pumping out new music all the time. We will have our new user interface to allow that process to be fast and seamless, so that’s two things, the B2B and the catalogs and the DIY artists coming on-board.
Then we have the radio app coming out. The radio app will be very interesting. We’re not necessarily targeting the listener or the artist on that. We’re just targeting the radio stations that are looking for a system to report to that will be transparent and direct and it can offset their cost via a super complicated blockchain behind-the-scene process. For them, it’s quite simple. For them, they just plug in, record to the chain what was spun on their radio station and they get a small royalty subsidy. Those are three things that are coming out in 2019.
It’s kind of like stretching the rubberband and just releasing it, or I guess I should say pulling back on the bow. That’s all the work that's been done in the last couple of years and in 2019, we're actually able to release, bam, bam, bam, everything, one after the other.
So I guess in closing, any last words for the kids? Cobban: Well, they’ll be able to listen to music for free, so no need to bug your parents for a subscription or listen to ads. That can be good for the kids and the parents who are getting bugged to buy a bunch of toys. On PeerTracks, it’s free listening, no subscription required and you don’t have to suffer through ads every couple of songs, and the artists are getting paid through our blockchain... It’s the best of both worlds for everyone. The artist gets paid instantly, transparently. The kids get free music and no need to suffer through ad commercials.