The idea of fans investing in music rights is enjoying a flurry of attention in 2017, and blockchain startups are all the rage. It was only a matter of time before startups started putting the two concepts together.
One of them is Valyou X, based in Australia, which is pitching itself as “the world’s first decentralised global stock market for musicians”.
It’s a riff on past startups that have tried to create a virtual stock market around songs and artists, except with cryptocurrency, blockchain technology and the possibility (and we stress ‘possibility’) of real rewards.
The idea: artists ‘list’ themselves on Valyou X, at which point 4m VXD cryptocurrency tokens are created for them, which can be bought by friends and fans.
Those tokens can be bought and sold as if they were shares in companies, but holding them will also earn people a share in the revenues from that artist’s actual music. We’re fascinated by the legal and licensing challenges that lie ahead for this though.
“Heard a song on the radio, social media, MTV, BET, Youtube, Spotify? You can search for that song or the artist and Valyou their music for $5,” claims the website. “When you valyou an artist song, it is like buying their song but there is incentive for you buy it [sic]. You get your cash back with an extra $5 if you are among the first 25% who valyou it. You will also have access to the song in your playlist, ad free.”
How those songs are licensed will be the interesting thing here: especially if they are from artists who have not listed themselves on Valyou X – the screenshots on its site featuring Justin Bieber, Kanye West, Taylor Swift and Ed Sheeran are surely for demonstration purposes only, rather than indicating endorsements from those artists.
The company is holding out the prospect for artists that they can sell four million tokens (or shares) to fans at $0.50 per token, raising $2m in the process – not coincidentally the upper end of the amount that the IFPI estimates it can take an established label to break a new artist.
According to its roadmap, Valyou X is planning to launch an initial coin offering (ICO) this month, ahead of the launch of its app in the first quarter of 2018.