Over the last year, there has been no idea that has garnered as much media coverage, speculation, and discourse as blockchain. The revolutionary technology, which has promise as a way to return individual power and freedom to people, has become a hot topic in the software space. On one hand, the exciting “blockchain revolution” has empowered a handful of software companies from all sectors to innovate and create unprecedented solutions for industry. This includes strides for innovation in the entertainment and music industry where there is no shortage of disarray with contracts, royalty & writer splits, and other systems that could be easily remedied with blockchain technology.
However, despite these exciting innovations and works, blockchain remains a wild west. At its best, it looks like refined cryptocurrencies like Ethereum and decentralized social media sites like Steemit. At its worst, it looks like Ponzi schemes and elaborate marketing facades with fanciful buzzwords thrown in between every word. Perhaps more problematic is the difficulty of differentiating between what is good and bad: there’s no shortage of hip and up-and-coming startups and their less appealing competitors trying to capitalize on the blockchain wave by littering their dull and lackluster product with words like “dApp” and “smart contracts” in their copy.
In the midst of this, a new kind of decentralized music streaming service called Choon found its way into coverage on Billboard and other music magazines. It’s a service that has been built by electronic musician Gareth Emery and a team of crack blockchain coders and is marketed towards solving the pain points of royalties and contracts—which sounds great. So, with some spare time and an open mind, I started reading into this service. Initially, I had considered that maybe Choon might be the blockchain we need for the music industry. It seemed like a perfect thing for artists, fans, and interested crypto investors. But, unfortunately, after reading over their white paper and websites, I’ve found that it falls somewhere between “Trying to capitalize off the blockchain trends” and “Genuinely trying to do some good in the music industry.” The thing I’m still trying to work out is which way does it lean towards more?
To find out, I wanted to break down Choon into its three core components. Choon describes itself as a direct response to the growing hostility in the music industry towards listeners and artists. They claim that these two parties are treated unfairly and not rewarded. Their solution is to build three things: a streaming website; smart contracts for releases, labels, and management groups; and an ecosystem for those aforementioned parties to get payments.
The first of these ideas—the streaming site—is nothing new or special. It takes after sites like Spotify where you can register and listen to music. However, two key things are different: payments and listening. In Choon’s view, the fan should be compensated for listening. So, fans are rewarded with a cryptocurrency—a digital coin or token which has a value set by market conditions—for listening. As if its any surprise, artists also are paid in this digital asset rather than in a physical currency like they’d be paid if they released their music on other platforms such as Apple Music or Spotify. This isn’t a bad idea if you intend to keep that digital currency and donate to Choon to help “contribute to the operating costs” or use it to buy music, advertisements and promotions like Choon hopes you will. But, as far as how it looks for real payments, it’s an inherently flawed idea.
There’s been an abundance of coverage this year on Bitcoin, a cryptocurrency that probably doesn’t need an introduction. While Choon’s cryptocurrency is very different, there is something that it—and most other cryptos— have in common with Bitcoin: their value is radically unstable. Cryptocurrencies and digital assets like Bitcoin are prone to volatile market conditions. There are a handful of digital assets which are not so prone to these conditions, but many of these assets are backed by physical assets like gold, money, et cetera. Choon’s crypto, NOTES, is not backed by anything. This is problematic because it means that the way that artists are paid for their royalties is not set in stone. One play on Choon might be worth $0.01 one day, and virtually worthless the next. To add to the severity of this, big artists with lots of plays (and as a result, a lot of NOTES) could cash out their crypto and severely tank the value of the currency. As if it could get any worse, NOTES won’t just be limited to the artists or the fans: they can still be bought, sold, and traded by financial-types on large exchanges and we know how that’s likely to go.
If you’re not dissuaded by the variable value of your payment method, then maybe you’ll be dissuaded by the fees and taxes. Choon says on their website that they pay “80 percent of profits from streamed music or media.” This means that Choon takes 20 percent of your earnings. Which, when compared to sites like Apple Music and Spotify who take about 30 percent, doesn’t sound that bad. But since you’re using a digital currency, you’ll be paying a different set of taxes should you choose to cash out your NOTES into cold, hard cash. That set of taxes is capital gains tax, and though the rate varies from 15 to 33 percent depending on your jurisdiction, losing that kind of money from taxes on top of the fees you already pay means you’re making virtually no more money than you would by sticking to an established platform like Spotify or Apple Music. In fact, it might cost you money to use the Choon royalties.
So if you’re still not necessarily dissuaded by the fees, market conditions, and an unfamiliar way of being paid, you might be delighted to hear that there are some silver-linings.
Sure, Choon isn’t perfect, and it isn’t a place I think I’d want to upload my music, but there are some silver-linings. Heck, there are even some things that would be a step in the right direction for the music industry if applied properly.
The first of these steps is the idea of Smart Music Contracts. As formerly mentioned, blockchain technologies have more applications than just serving cryptocurrencies and tokens. They are versatile and can handle a number of digital assets like code, media, resources, and text. A Smart
Music Contract is just like an actual contract, just on the blockchain. Choon has built contracts for specific things like sampling, processing contracts, and licensing. Their most comprehensive and useful contract, however, is their smart record contract, which ensures splits are paid and that all parties agree to the terms of publishing their track.
This all sounds nice, but in short, what these contracts all have in common is their transparency and reliability: they’re accessible and barebones enough that normal musicians understand what they do and how they work—which is brilliant. By making smart contracts more accessible and easy to understand, we’re not just building useful resources, but removing the need for lawyers and “trust” between parties. Of course they’re not extensive and omnipotent yet (they only apply to Choon releases), but expecting them to be at this point is a wholly unrealistic opportunity, considering that these ideas are relatively new to the music industry.
Which speaking of ideas that are relatively new to the industry: fans can be compensated for making playlists, listening to music, and referring other users; the compensation they get through the NOTES crypto can be used to then promote and download music, tip artists and sell merch and tickets. In fact, the whole market on the site is a novelty idea. If I—or the scores of artists I’ve discussed this service with—weren’t so adamant about cashing out NOTES into a currency I could spend on real things like food, bills, vacations, MIDI controllers, and other things, I’d think that these things are pretty cool; maybe even useful.
But finally, and perhaps most importantly about Choon, however, is the fact that they are bringing an awareness of blockchain and cryptocurrency to an audience that could generously benefit from it. It is becoming increasingly difficult to be uninformed in regards to blockchain and its applications, and Choon’s most valuable selling point is that it has laid a groundwork for a more transparent and sustainable music industry—and they’re making even the most technical aspects of this inherently technical software into something that musicians and their fans can understand and apply, which, if you ask me, is pretty damn cool.
Unfortunately, if you made a list of the positive and negative things I’ve presented herein, you’d see that the negative list is slightly longer. It’s not because am trying to nay-say or bring contempt upon a company with good intentions and technology, but it is because I want prospective users of the platform to be aware that Choon’s mission to “help artists make a living” is not plausible with their current course of action. It’s my opinion that artists would prefer making music to tracking the exchange rate of their royalties or worrying about the fees and taxes they’ll have to pay should they cash out. At the end of the day, a crypto like NOTES isn’t a dollar: so until our society at large changes its perception and view of digital assets, it will be hard to change minds.
Despite the flawed payments system though, there’s a lot to look forward to in Choon: their smart contracts have real potential to increase accessibility and transparency in an industry that sorely needs it; their streaming service will be a welcome entrant to a troubled landscape for streaming; and their vision and intention is not just warm and honest, but emphasizes educating people on the applications of blockchain technology. If this were all Choon were fixing to do, I’d say their vision is realistic and achievable.
But Choon said they want to change the music industry; they’re hell-bent on reinventing the digital landscape for music. But honestly it’s extremely unlikely that, even with their all-star cast of Grammy-winning supporters and top-class crypto coders, their visions of grandeur will be exacted. However, it’s even more unlikely they’ll give up on that vision as they have finished their proof of concept, deployed their alpha, and are preparing to begin a token sale that they hope will raise nearly $11 million in capital. And to that, I wish them the best of luck.
[DISCLAIMER: The writer of this article, Noah Weidner, is the CEO of wave.ac, a forthcoming audio streaming and artist tools platform. In his capacity writing for Rave Advisory, he is not writing with the intent to defame or discredit the works of Choon, but rather to give his perspective—and a cohesion of other perspectives from friends and associates in the industry—as an artist, manager, and creator.]