Bittunes has a simple approach to how the blockchain can transform the music industry.
While other music oriented startups in the field remain very focused on technology driven solutions, Bittunes wants to initially focus on the problem: the way the music industry is today.
“We have tried from the beginning to keep things as simple as possible,” Bittunes managing director Simon Edhouse tells CCN. “This has been for a number of reasons. Ultimately we believe the challenge for adoption of ‘new to market’ systems like this is not so much a technical one but rather, it is related to developing a trusted brand and providing a simple service, understandable anywhere across the planet, that does not confuse people.” Bittunes has a stripped-down philosophy.
“Simple is best, simple wins,” Edhouse says. Unlike other technologies in the space, Bittunes uses Bitcoin.
“We use Bitcoin as our native currency because it is clearly the most sought after and valued digital currency, and therefore, the safest and most reliable one for our users for the long term,” Edhouse says. “However, to keep things simple, we denominate all transactions in USD and Bitcoin, with the USD amount displayed floating up and down with fluctuations in the Bitcoin exchange rate.”
Bittunes has a two-tiered system with two price points, and costs 50c for all new tracks. For this, Bittunes takes nothing. Instead, the Artist earns 50% (25c) and buyers share the other 50% between a small group of up to five buyers per sale.
“So, for the vast majority of songs in the system, a song sale represents a transaction between Artists and Fans only, with no intermediaries,” Edhouse explains. “No system can become flatter than this.”
Once a track enters the ‘Overall Top 100’ its price point changes to $1.00. This gives users incentives to buy low and early if you think a song will rise. As the track attracts enough attention, its price increases, “so it distributes higher returns.” Makes sense.
“When a song reaches this point, the Artist get’s 40% (40c) the buyers share 40% between them,” Edhouse tells me through e-mail. At this point, Bittunes takes 20% (20c) per track traded.
Bittunes differs from Ujo and PeerTracks, companies trying to solve a similar problem.
“We were approached by Mastercoin to do something similar – pre-sales and crowd sales – but we felt that these type of systems lacked the core strengths of Bitcoin, so would be unfair to our users,” Edhouse explains.
“My worry is that these systems don’t have Bitcoin’s inbuilt scarcity and demonstrable value, and also its already very wide global reach,” he said.
Bittunes believes the Bitcoin blockchain is the best block chain, but also supports double-pegged Sidechains by Blockstream. The team believes that Sidechains and Lightning Networks will help them move Bittunes data to the block chain.
“Bittunes excludes all major label music,” Edhouse says. “By doing so, we have begun to create one global marketplace using one rights system, (creative commons) which uses only one global currency: Bitcoin.” Bittunes is confident in this choice.
“To us it’s obvious,” he concludes. “This is the only way to go.”
Images from Shutterstock.