The music industry in particular is prone to disruption. The dominance of the centralized record labels has waned to the edge of obsolescence. Outside of the major labels, independent artists pursue their art through the likes of Bandcamp, Soundcloud, Spotify, and Kickstarter. Even still, the business side of being in a band, releasing albums, and playing shows is fraught with many points of friction. For example, when a fan purchases a piece of music or a subscription to an indie band’s catalog, where does the money go exactly? Not directly to the artists. Ultimately, it often gets diluted through intermediaries before it reaches one account (often via PayPal).
Here are some examples of how a smart-contract deployment platform can remove friction from a band’s business practices so that they can focus on bringing their music to the world.
Since a band is an entity which generates revenue in a variety of ways, this effectively makes a band an ongoing business endeavor. Of course, most musicians find this responsibility a time-consuming and stressful affair which takes time and energy away from doing what they really want to do: songwriting, playing shows, recording, etc., but these responsibilities do not handle themselves. Yet.
In the case of a record label or even the independent platforms available today, a lot of this is handled by another authority, but a band should be able to navigate this space on their own without giving up their artistic freedom.
As with any business endeavor, it is important for everyone’s roles to be defined and enforced. In the case of a band, you have members who all collaborate to produce material. When a Project is announced on Embermine, a Project Compact is opened up by a Creator profile which can belong to any one of the band members. This doesn’t necessarily grant special privileges to this member; it simply creates a focal point for the band to move forward with the Project by signing off on smart contracts which will automate and enforce royalty shares of all members. This also establishes ownership of the IP. Everyone agrees on what they do within the group. Everyone knows their stake within a particular Project.
The Middle Man
When a band releases an album on the Embermine marketplace, they are releasing a work which is tethered to smart contracts between all individuals involved in its creation. The band members have all divvied up the royalties at this point through a Project Compact. Let’s use an example of a four-piece band with even ownership of the material. This means that every member has a 25% share of all revenue generated by this album. These smart contracts are activated when a Customer purchases an album or a song associated with the Project Compact. This exchange is not diluted by retailers and channels with high transaction costs. Since the transaction is between the Customer and the Project Compact housing the smart contracts, the value is allocated to individual members of the band automatically and accordingly. For a $10 album, each purchase nets the guitarist $2.50, the singer $2.50, and so on. Ad infinitum.
One of the key elements of the platform that makes it efficient in the flow of value is that the system itself does not hold anyone’s fiat currency such as USD. The platform utilizes a digital currency, Spark, which is pegged to USD through a decentralized exchange layer powered by BitShares. Sparks are how one affects change within the environment: create smart contracts, Entities, purchase content, etc. Like tokens in an arcade or chips in a casino, you need them to play, but you can exchange them for fiat currency at any time. Embermine is a flow-based digital economy where value is not diluted by intermediaries but distributed according to programmatic agreements.
The Project Compact not only functions as a collection of smart contracts, but also as a record of all Collaborators and their contributions to the Project. In the music industry, this is particular important in the realm of copyright protection. Since bands are prone to line-up changes, it is important for a record to exist of the creative makeup of each album, or even each song. Ownership of the material is always enforced through the Compact, the consensus engine of the Project. Once a Project is released, the Compact is live on the blockchain. At this point, the smart contracts within are now active and a record of IP ownership now exists on the decentralized ledger of the blockchain, immutable and transparent.
Most bands have a social media presence as a way to engage with their fan-base. But with a scattered presence distributed between Twitter, Facebook, Instagram and such, there is a lack of focus which can produce more noise and less signal.
Embermine will provide an social environment designed so that all interactions—comments, upvotes, recommendations, etc.—have a real effect. Instead of mining data to be sold to marketing firms, fan activity on Embermine can actually produce positive feedback to the bands themselves.
Heat is a unit of value which measures the amount of activity surrounding an Entity (Project, Creator, Collaborator). A higher Heat Index means that a Project or Collaborator is more visible in searches in relation to similar Entities. Every interaction has a low Heat cost, but the option of donating more is there if a Customer wants to boost their band’s signal.
A fan-base could collectively donate Heat towards their favorite band within a short time span, producing a spike in the band’s Heat Index, which results in higher visibility and an increase in sales. The environment is designed to give fans a more active role in the success of a Project beyond consumerism.