Several blockchain startups have pursued taking on the middleman-heavy music industry, but still business-as-usual persists.
But maybe not for long, with Slovenia gig-booking blockchain platform, Viberate, snagging two high-profile advisors – bitcoin entrepreneur Charlie Shrem and Pinterest chief scientist Dr. Jure Leskovec – to help the company figure out how topple the tower.
Co-founded by Slovenia DJ and music composer, Uroš Umek, Viberate touts itself as a "digital agent," using smart contracts and its own dedicated cryptocurrency to help musicians without agents manage concert bookings and earnings.
The platform's idea is rather simple: eliminate the middlemen.
And this mission, while near and dear to most blockchain enthusiast's hearts, is especially interesting to Shrem, in that he lived the cumbersome, traditional process.
"If you ever try to hire a band for your wedding … there's like three people taking a percentage fee. If my band costs me $10,000, I know at the end of the day, the actual band is only getting $5,000," Shrem, who recently married his long-time partner, said.
But his interest in Viberate is also strategic.
He told CoinDesk:
This aligns with Shrem's other recent advisory position and investment in Steem, a blockchain-based social media platform with its own cryptocurrency.
"When I [saw] Viberate, to me it looked like Steem, but more catered to the music industry," Shrem said.
So it seems, Shrem is stepping away from finance, not a particularly surprising move with his founding of early bitcoin payment startup, BitInstant, getting him more than a year in federal prison for aiding and abetting the operation of an unlicensed money transmitting business.
The blockchain projects he now seems more interested in are arguably less dicey than finance.
While Shrem admitted he's keeping his distance from financial services "for obvious reasons," he told CoinDesk his interest in advising non-financial blockchain companies has more to do with bringing light to blockchain's many other utilities.
Enough to make a dent
Its other prestigious adviser, Leskovec, who is also a Stanford professor and also co-founded mobile as startup Kosei, was lured to the startup in seeing all the artist statistics Viberate was keeping and wanting to make sense of it all.
Explaining the importance of mining data, Leskovec said:
The company has also received backing from Music Moves Europe, a European Commission initiative for supporting the continent's music sector and the fair compensation of artists.
But, will winning votes of confidence from these reputable people and institutions be enough to make a dent in a notoriously difficult industry like the music business?
For Vasja Veber, COO of Viberate, it’s about identifying the right artists.
"Around 80% of the world’s musicians are not signed to an agent; those are the guys we’re after," he said. "They have a hard time selling gigs because they don’t have an agent, [and] they’re not even close to getting an agent because agents usually take a 15% fee."
And sometimes, according to Veber, these musicians don’t get paid at all. Whether a promoter skips out after the show before paying on purpose or not, musicians "often get screwed over," Veber continued.
And this is why a blockchain-based escrow service is key.
Benefits of blockchain
While this process could be digitized without a blockchain-based platform, the new technology offers benefits over traditional systems.
Veber told CoinDesk:
Cryptocurrency’s ability to circumvent the onerous regulatory and business frameworks throughout the world remains one of the industry’s prominent differentiators. And Viberate plans to keep using that asset, planning its own initial coin offering (ICO) next month.
With the ICO, which will offer tokens called vibes, Veber hopes to raise $12 million, half of which will be used on marketing and half on development of the platform.
Although, in Shrem's mind, while marketing is necessary, platform development should remain the main focus.
Image via YouTube
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.