Andres Martin-Lopez is obsessed with music.
As a child, the former senior project manager for global music corporation Universal Music Group, thought it was fun to organize and reorganize his CDs by genre, artist or whatever other classification he could imagine. Now, he's merging that passion with blockchain technology, recently raising $1.2 million for Blokur, a music-rights management firm that uses the ethereum blockchain.
It's another instance of a legacy industry executive moving into the wild world of blockchain in an effort to disintermediate the middlemen that currently extract value from the little guy. Blokur's mission is to ensure musicians get paid proportionately to the shares of the song they own, and the best way to do that, according to Martin-Lopez is to record music rights on a blockchain.
In his first interview since co-founding the London-based startup earlier this year, Martin-Lopez said:
Already, Blokur works with 3,000 music publishers and 10,000 songwriters, and its five-person team has already collaborated with the likes of Radiohead, will.i.am and Imogen Heap.
The seed round of funding – raised by Digital Currency Group, Ascension Ventures, media entrepreneur Remy Minute and InnovateUK, a British innovation agency – will help the startup double the size of its team, while scaling the number of clients it helps move data.
Harmonizing the data
The first step to making sure musicians and publishers are paid out appropriately is reconciling information, so that a consistent set of data can be added to the ethereum blockchain.
According to Martin-Lopez:
If that sounds complex, that's because it is. Every record company, publisher, musician, music rights non-profit has its own internal record of the people, bands, song titles and purchases. But many times those records can be wrong, with misspelled names or incorrect spacing or erroneous capitalization in band names – all discrepancies that can lead to right holders not getting paid.
Blokur is using machine learning software to help the company catch these mistakes, and then fixing them on a new aggregated list that can be added to the blockchain. According to Martin-Lopez, that system makes music rights management as much as 70 percent more efficient.
In addition to removing inconsistencies, Blokur also tracks the percentage stake each right holder has in a specific piece of music, paying them out directly with cryptocurrency.
And that process, Martin-Lopez estimates, earns each counterparty 4.4 percent more income on average.
Growing the platform
With music and other arts in the U.S. alone contributing $704 billion to the economy in 2016, the space has piqued the interest of plenty of blockchain entrepreneurs, which will mean strong competition for Blokur.
And even with its experienced team, others in the market have founders and advisers with equally strong backgrounds. For instance, Imogen Heap is developing a blockchain-based platform for music called Ujo, and Slovenia-based Viberate has snagged two high-profile advisers: bitcoin entrepreneur Charlie Shrem and Pinterest chief scientist Dr. Jure Leskovec.
However, Blokur contends it will launch a commercial product soon, after releasing its first product for helping music publishers manage composition rights in beta earlier this year.
Currently, the company is engaged in negotiations "with several large publishers, performing rights societies and artists," and has been collecting data from early adopters on how to improve the platform.
Plus, the company has aspirations to expand into artist's rights more generally, once they prove the solution within the music industry.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Blokur.
CD collection image via Shutterstock
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.