Ditto CEO Lee Parsons sparked some heated online discussions last month with his ‘There’s never been a better time to be a recording artist‘ article. He claimed that over 500 of the distributor’s artists earned more than $50k from streaming in 2020, and over 50 earned more than $100k, as part of an argument that “a huge number of independent artists are making real money, completely on their own terms, doing what they love, and building fanbases who love it too”.
Now Ditto is hoping to make some more waves, although this time for a new product rather than Twitter rows. It’s called Opulous, and is being pitched as a peer-to-peer ‘decentralised finance’ (DeFi) scheme for musicians. “For those artists looking to borrow money, the loan is guaranteed against the artist’s past streaming revenues with the copyrights they own held as collateral,” is how Ditto describes it. “Meanwhile, artists, and other investors, will also be able to pay into Opulous’ Music Copyright Pools, earning 10% per annum on any contributions they make.”
There’s blockchain technology behind this, including smart contracts that will “automate monthly premium and interest repayments and direct profits straight to investors”. Opulous is being built with a partner company, RandLab, using the Algorand open source public blockchain. It’s also a spin-off from Ditto, with Opulous having raised $1.5m of seed funding from investors to get up and running with a first version in the next two months.
Some people will be so excited by the blockchain angle, they’ll instantly acclaim Opulous as a revolution for the music industry. Others will be so wary of the blockchain angle, they’ll instantly assume it’s a house of cards in the making. In the middle, there’s the rest of us, digging around in the details of how Opulous will work, to understand what the real innovation, risks and opportunities are here.
“When I say De-fi, i don’t mean fun tokens and rug pulls. I’m talking hundreds of millions in financial solutions, backed by real world assets,” tweeted Parsons last night. Ditto already has one blockchain-powered product up and running with its Bluebox royalties tool from last year.
Distributors exploring this technology is an interesting trend in itself. It’s not that long since some over-bullish evangelists were trumpeting blockchain as a route to sweeping away the music industry’s middlemen. Now it’s being put to work by some of those companies instead, which feels like a more realistic and positive way forward. Still, at this point Opulous is just an interesting announcement. That first ‘minimum viable product’ (MVP) promised by April will give us a better sense of its true potential.
Music Ally’s next Learn Live webinar will help you understand what’s required for artists to thrive in new international markets!