With COVID-19 halting tours and streaming music cutting into artist’s revenues, musicians are looking for new revenue streams and opportunities to connect with their fans. NFTs may prove to be the solution and a new partnership is bringing this emerging technology to the forefront. CaserLabs, a leading blockchain software company, is teaming up with financial consultancy firm Megalodon to launch Dmusic, a digital NFT record shop. Cliff Sarkin is COO of CasperLabs, will be telling us more in this interview with TechBullion.
Please tell us your name and a little more about yourself?
My name is Cliff Sarkin, and I am the chief operating officer at CasperLabs, a leader in enterprise blockchain. In my role I am responsible for operations as well as strategic partnerships with our fast-growing portfolio of customers. I am a seasoned tech entrepreneur and attorney with more than 17 years of experience. Before joining CasperLabs, I served as VP of Business Development at DNA, a leading early-stage blockchain venture fund. Prior to DNA, I helped grow and scale three successful internet technology startups, during which time I raised multiple venture funding rounds for all three companies, helped scale Duda.co from 12 employees to 70+ and led VideoSurf’s $80M acquisition by Microsoft in 2011. I hold a BA from UC Berkeley (‘01) and a JD from Harvard Law School (‘05).
The music industry is a growing market segment in crypto and blockchain. How big is this market and what is the level of demand for this innovation?
According to the Market Size Statistics and Forecast Report, 2022 – 2031, the NFT market was valued at $232 million in 2020 and grew exponentially to $22 billion in 2021. This is a tremendous increase validating that consumers and enterprises are ready for change. The music and entertainment industry is advancing to non-fungible tokens (NFTs), blockchain solutions and cryptocurrency transactions that disrupt the status quo. It’s similar to the digital revolution of the 90’s migrating from CDs to digital music, but happening faster than one can imagine.
Revenue in the Music Streaming segment is projected to reach US$26,610m in 2022 (Source: Statista).
COVID-19 is halting tours and streaming music is cutting into artist’s revenues, how much of these challenges inspired the Dmusic project?
According to Billboard Magazine, tours represent 75 percent of the earnings for musicians and bands. With tours and festivals significantly impacted by the pandemic, musicians need to foster new avenues to engage with their fans as well as find alternative revenue streams and ensure the integrity of their IP. With blockchain, they have more control of the integrity of their digital content. Working with Dmusic, we can create a blockchain-powered plug-in that allows musicians to create and offer their work directly to consumers as NFTs, cutting out the middleman and shifting power back to the creator.
How do NFTs work in the Music industry, is this emerging technology a sustainable solution for the music industry?
A music NFT is a certificate of ownership of a unique musical work that can be sold to another party. The owner of the NFT has the authority to determine how the composition is used and sold. It could be for a song, album preview or video or even album art. Selling music via the blockchain is a way for an artist to build a direct relationship with their fan base without the need for a record label or streaming service in some cases. Millennials and Zoomers are already purchasing NFTs as a means to connect with their favorite artists despite the downturn in concerts and music festivals.
What’s more, artists and musicians can find creative uses for NFTs, such as giveaways or limited edition sales, to create more engagement with and excitement in their fanbase.
Do you have strategic partners in the music industry?
CaserLabs has teamed up with Megalodon, a financial consultancy firm, and Haute Living, a premier media conglomerate, to launch the Dmusic digital NFT record shop. Dmusic will list and mint music NFTs on the Casper network, creating more direct and valuable interactions between musicians and fans to simplify the way artists can create and offer NFTs to their supporters in a compliant way through their own channels, such as their websites.
The DMusic platform will
- Allow artists to mint NFTs on the Casper Network
- Have complete crypto wallet integration
- Empower musicians to easily create collectibles, series, and fan engagement NFTs
- Ensure NFT holders are able to claim top fan spots
- Permit Airdrops, Mixtapes, Virtual Tickets, and Virtual Items to be available to NFT holders through their personal dmusic.io account.
- Be connected with other NFT Marketplaces for a secondary market to allow NFT holders to buy, sell and trade their NFTs.
Limited edition music NFTs will be the first assets to be offered by Dmusic artists. What makes this particularly special?
Music fans will have early access to artist releases almost like a backstage pass to a concert, but in this case they are backing the artist and protecting the content too. The fans become backers, so to speak, but in a very ethical and compliant manner. It’s an ideal engagement for both parties. Artists and musicians can also mint limited-edition NFTs for give-away or for sale as well as NFTs which will enable the owner to participate in special events, whether online or IRL.
Will Dmusic focus on only high-profile artists? Who else is able to use this NFT technology and how can we invest in this project?
Through our strategic partnership with Haute Living, Dmusic will undoubtedly be used by some of the world’s most well-known musicians and artists. But the Dmusic platform will also allow independent artists to use NFT technology for fan engagement in a compliant way, while fans will be able to experience an easy checkout process when acquiring their NFTs.
Dmusic provides technology for indirect tax compliance. How does this work and why is this important in today’s blockchain market?
Dmusic provides technology for indirect tax compliance on the sale of NFTs and prioritizes the positive environmental aspects of offering digital assets. There is complete transparency and authentication to each transaction. We will build solutions that control the real-time VAT/GST calculation, invoicing, and VAT number validation on the music NFT sales. This user-friendly check-out journey will file and remit VAT/GST due, enabling the artists to comply with the applicable indirect tax legislation.
Many NFT platforms may be considered as offering securities or financial products. Dmusic is in compliance with applicable VAT/GST legislation and will not be offering any securities or financial products.
At what stage of development is the Dmusic project, what do we expect next on your roadmap?
Today, there are multiple NFT platform companies supporting NFT businesses, some of which have reached unicorn status already. These platforms still focus on relatively simple NFTs (e.g., based on digital content with varying rarities such as CryptoPunks or NBA dunks) and on “first wave” blockchains (e.g., Ethereum). However, there is a strong demand for a next-generation, industry-grade NFT platform which fulfills the technical, economical and legal requirements for NFTs representing “real assets.” Such NFTs with real underlying assets, like a recording of a song, concert tickets and merchandise, require more complex multi-party processes and integrations into established systems such as e-commerce platforms or enterprise systems. Dmusic has received several requests from well-known brands and artists to build NFT platforms and distribute NFTs on the Dmusic platform. The Dmusic Plugin will be able to mint music, art and sport NFTs, with wallet and payment integration on WordPress and WooCommerce websites by the end of Q2 2022.
What advice do you have for musicians wanting to catch the NFT wave and not be left behind?
CasperLabs provides a frictionless blockchain ideal for enterprises including the music industry. CasperLabs can work with musicians, labels and independents to curate a custom NFT that will secure and protect your IP and ensure your onramp to blockchain is swift and secure. Just send us a message at email@example.com we can start the process, or connect with us at the LA NFT Conference in March or World Economic Forum later this year.