Back in the mid-1990’s, Pearl Jam — one of the biggest rock bands of the time — tried to boycott Ticketmaster as a protest against skyrocketing ticket prices for live concerts.
They failed. With Ticketmaster controlling 90 per cent of the US touring circuit, Pearl Jam was forced to accept the company’s massive influence in the music industry.
That was 1995. Since then, Ticketmaster has acquired numerous smaller ticketing companies and went through a merger with Live Nation in 2010, becoming the Live Nation Entertainment conglomerate. That 90 per cent US market share they once enjoyed? An exact number is hard to find, but it’s probably fair to say that they’ve basically got the entire market under their thumb by now.
But might Pearl Jam have stood a chance if they had had a powerful technology like blockchain at their disposal?
Tokenizing bands for better representation
CODA is the name of a new project being built on the ICON blockchain that attempts to solve this very problem. A collaboration between the TEMPO P-Rep team and Brian Li from Rhizome, CODA will be a ticketing platform for live music concerts that allows bandmates to tokenize shares in their band or a music collaboration project to ensure equal and fair representation from ticketing sales.
“The ticketing space in the US is controlled by one company for all intents and purposes — Live Nation owns Ticketmaster,” Li says. “They have a ridiculous set of fees that come with each ticket — there’s even a fee involved just to be able to print a ticket. On average, you see 20-30% of ticket prices for big acts being consumed by fees.”
“A lot of those fees can be completely abstracted away if there’s no entity standing in the middle between the fans and the artists.”
CODA will use ICON’s IRC-31 multi-token standard to tokenize groups. This will allow bands to represent both the group and each person’s ownership in the group in an on-chain way. They are also doing something similar with projects, allowing various groups to work together on larger collaborations. Individual groups will be able to mint tokens for their bands and projects on the CODA platform, and there will be an internal tool to allow band members to vote on how the tokens are divided within the group.
Profits from ticket sales will be converted to a stablecoin and divided between the band’s token holders. As stablecoins hold their value, international musical collaborations will be made easy and convenient.
TEMPO is also considering implementing into CODA a funding platform for musicians akin to ICON’s Contribution Proposal System (CPS) grant management platform, along with some aspects taken from DeFi. “It’s going to flip the model of what people expect in terms of where the profit comes from on a ticketing platform,” Li says. “We’ll do this by leveraging lending on Omm and connections to different chains. I’m sure that there will be more opportunities to generate yield in a safe way as the BTP network expands.”
By the people for the people
Astute readers may wonder how cutting out the middlemen matters if you’re just replacing it with a new middleman. This will be accomplished through the CODA governance token. To make the platform profitable, there will be a small fee attached to each ticket sale, which will be paid out to CODA token holders. But since the musicians themselves are most likely to be the ones HODLing CODA tokens, that means more money for the artists.
“All of this is going to be owned by the people who stake our CODA token, unlike a traditional system where Ticketmaster is the only entity that profits from all of these fees,” Li says. “Right now, the artists don’t have a stake in the artists’ economy. We want to give them a stake. We want the people who use the platform to own the platform and have governance over the ticketing fees and other aspects of the network.”
Pivoting toward success
The project wasn’t always intended to be a ticketing platform. At first, the developers had envisioned it as something of a Bandcamp competitor. Li explains:
“Initially we were looking to build a platform where musicians could tokenize the copyright of their songs and then split up token distribution among the owners of each song. There would also be a payments system that would parse the ownership state and split up the funds for each person. To showcase the system, we were planning on building a music store.
“However, when we started interviewing the musicians who represented our target audience for the platform, copyright was surprisingly not the first thing that would come to mind when we asked how the system was broken. Rather, a lot of them expressed concern over various fees that cut into their profits — there’s a prevalence of entities that exist between the fan and the artist, with each layer taking their own fee and by the end of it you’re down a significant percentage.”
So, the team decided to pivot away from their original idea to tackle this problem by creating a payments system that cuts out as many middlemen as possible.
On building a company on ICON
It’s important to note that CODA is being built as a company, with a goal to scale, and is not an open-source project. There are a lot of community projects on the ICON blockchain, but few that are incorporating. CODA could very well turn into a very profitable use case for ICON in the near future.
CODA is also somewhat unique in that it’s one of the first companies to kickstart with funding from ICON’s CPS. Once their proof of concept backend is finished development at the end of October, they’re planning on using it to attract a round of venture capital funding.
“Many builders in blockchain right now are people who are familiar with blockchain, so the demographic you can target is already quite small. This means that you don’t need to scale as fast because there aren’t as many people to scale to,” Li says. “People may say that they’re building for mainstream users, but no: as long as your app requires a Chrome extension as a wallet, you’re not building for the mainstream.
“We’re taking a different approach, and that warrants a different approach for funding. Something like this really needs to be accelerated because we’re building for the mainstream, a demographic that is already very large and is accustomed to certain ways of interacting with apps — they’re not going to use a Chrome extension, they’re not going to figure out how to get on Coinbase, and so on.”
A fresh team for a fresh approach
Li has been working on ICON projects for a long time now, and brings his blockchain expertise to the project. The TEMPO team is made up of professionals in the entertainment industry with experience working with some of the biggest names in music such as John Legend, Ariana Grande and Alicia Keys. They’ve also filled some key roles in business development and market research.
The team has gotten a bit of blowback for not being composed entirely of experienced blockchain engineers, something that Li finds to be rather ridiculous:
“Blockchain is such a small industry. If people are coming in to build on blockchain, chances are they don’t have experience in blockchain. It’s like back in the 1990’s, blaming new web developers for not having experience.
“It’s important for non-blockchain people to come in and start working in blockchain, because it brings a new perspective. People who’ve been in the blockchain space since 2018 are very comfortable with concepts that are not normal at all for the other 99.9% of people out there. I was really happy to bring people with a new perspective to build on the network.”
The team is aiming to start onboarding musicians to their platform in the spring of 2022, in time to showcase CODA at a major New York event later in Q2. They also have a partnership with a major New York university that they’re working on building out.
You can follow the development progress of CODA on TEMPO’s Twitter page @TempoICX.