HanChain project and music production
Amid the worldwide craze of the BTS phenomenon, the public’s interest in music, especially K-pop is on the rise. Existing music streaming companies such as Melon and Bugs Music are developing into a structure in which individuals buy and sell music like stocks and take profits with the advent of Music Cow. In line with this, institutional investors are making large-scale investments in music and seeking various types of investment opportunities by utilizing the copyrights of music.
Sound sources are divided into copyright holders and neighboring rights holders.
Copyright holders are composers, lyricists, and arrangers while neighboring rights are performers (usually referred to as singers), record producers, and broadcasting companies.
In other words, it can be said that the copyright holder is the person who creates the sound source, and the neighboring right is responsible for distributing the created sound source.
If you look at the market structure and profit structure of sound sources, they are divided into four main areas.
- First, record producers such as SM Entertainment, JYP, Big Hit (49% of revenue).
- Second, copyright holders are represented by lyricists/composers (10% of revenue)
- Third, performers as singers (6% of revenue)
- And fourth, streaming providers (35% of revenue) such as Melon, Naver Music, Bugs Music, and Apple Music, which are platform companies where we usually consume music.
They each share their profits according to their roles. In other words, when consumers consume a song at the price of 7 won, the record producer receives 49%, or 3.43 won, the copyright holder, 10%, or 0.7 won, the performer, 6%, or 0.42 won, and the service provider, 35%, or 2.45 won, respectively.
Recently, as the music market is rapidly growing due to the craze of K-pop, many attempts are being made to own and commercialize music. Until now, Melon, etc. used to consume on a monthly subscription basis or in units of songs, but as Music Cow created a product that trades the value of this sound source like a stock on an exchange, general music consumers go beyond their own consumption to buy and sell it. It is expanding into an investment product that takes profits according to the popularity of music while trading. Music Cow buys copyrights from the copyright holders of existing songs and trades them as investment products.
The advantage of this platform is that it has resulted in the expansion of the existing form of being a consumer to an investor, and is receiving a lot of attention.
We would like to discuss the problems and alternatives of music service companies such as Mel* and music investment platforms such as Mu**u, which are emerging recently.
Although music service companies have contributed a lot to the popularization of music, there are several problems.
- First is the possibility of manipulation.
The most important task for music companies, composers, and lyricists, is to place them on the top charts of music service companies in order to consume a lot of these sound sources. The songwriter and lyricist who took the top spot in music service companies have no choice but to make efforts to position themselves at the top of the public like by saying that they buy a house in Gangnam in a few months. The problem of ranking manipulation of music sites was also aired on the public TV program “I want to know” the other day.
- Another problem is that copyright fees are usually paid on a quarterly basis, forming a deformed structure in which the reward for effort is paid long afterward.
- Lastly, there is a problem that the amount paid to the copyright holder (composer, lyricist) and performer (singer) is too small.
When consuming 7 won per song, composer/lyricists receive 0.7 won and singers receive 0.42 won. In other words, when a song is consumed 100,000 times by a music service provider, the composer/lyricist receives 70,000 won and the singer receives 42,000 won after 3 months. It is difficult for a song that I have put a lot of effort into to be consumed 100,000 times, and even if it is consumed 100,000 times, it is a very disappointing result if the cost is 100,000 won or 42,000 won.
Therefore, the music market has no choice but to have a structure in which only a few musicians who invest billions or tens of billions of dollars to develop and market the music industry succeed by the logic of capital.
Numerous talented and passionate musicians and composers are bound to get frustrated in front of the high barriers of reality.
We would also like to discuss the problems of the music investment platform.
- First, when a transaction is made like a stock transaction with the right to claim participation in copyright, disputes over copyright with existing copyright holders are always contained. When the price of existing songs rises on the music investment platform, there is a potential for existing copyright holders to claim their rights.
- The second is that when the company of the music investment platform goes bankrupt, the substance of the music stocks held by investors disappears, and the entity legally responsible for it is lost.
In this current music creation and distribution structure, since the start of the HanChain project in 2018, we put the blockchain-ized services of music into the white paper, maximize the usability of PayKhan one by one, and seek application to the content market. And now is time to commercialize a blockchain-based music copyright token.
The music service provided by PayKhan Wallet has the following characteristics.
- First, 2000 sound tokens are issued for each sound source.
- After that, members who apply for the sound source production at the special shopping platform will hold 50% of the ownership of the sound source, that is, 1,000 tokens.
This is transmitted to the member’s personal electronic wallet (MetaMask, etc.).
- In addition, the copyright holders of the sound source such as composers and lyricists receive 240 sound source tokens, which is 12%. Singers who are performers will have 160 digital tokens (8%), and agencies and producers will have 600 digital tokens (30%) in their respective electronic wallets.
Specific sound sources that are requested and produced in this way will be played on MusiKhan of PayKhan Wallet. This music will be served in a structure that can be heard by all members who have PayKhan Wallet accounts.
The fee to listen to one song in PayKhan Wallet is 2,090 PKN, which is the value (present value) of one HanChain in PayKhan Wallet. Of this 2,090 PKN, 1,045 PKN is deposited into the member’s PayKhan wallet in real-time to a member who has applied for the music production. In addition, 250.8 PKN is deposited to the composer and lyricist, and 167.2 PKN is deposited to the singer in real-time.
In addition, when consuming music, an additional 2090 PKN, the price of 1 HAN, is required as a seed (fee), which gives consumers a return (reward) to the 1 available HAN. Consumers who listen to music can obtain PKN again by issuing this available HAN as collateral and then reuse PKN for real-life consumption.
Here, we would like to examine the characteristics and advantages of tokenizing a sound source and creating a blockchain-based distribution structure.
Blockchain is a third-generation platform. This refers to a distributed, shared platform that goes beyond the proprietary platform represented by the second-generation platform. It is not a system with the possibility of artificial manipulation by humans, but a transparent, fair, and real-time income distribution platform. In addition, it is a value-creating platform where consumption becomes a real income by further developing from an internet-based platform where consumers are still only consumers.
A consumer pays 2,090 PKN to listen to one sound source, but he/she will receive 1 HAN from paying 2,090 PKN as seed, and the value of 1 HAN becomes greater than 4,180 PKN because of the increase in the total transaction volume of the paid seed, and consumer will earn money instead of only paying money. In addition, the HAN value in PayKhan Wallet is a structure that has no choice but to increase gradually due to the principle of supply and demand, as the PayKhan that I have consumed is widely used and distributed in the ecosystem. This virtuous cycle economic system is combined with the blockchain music copyright token to further revitalize PayKhan’s ecosystem.
I am a consumer when I purchase a music production product on a special shopping platform, but when other people consume my music, I become a producer in a structure in which real-time income is continuously generated, and people who listen to music need to pay by PayKhan (PKN) but acquire HanChain through Seed and issue PayKhan after setting HanChain as collateral, and use it in real life to increase the value of HanChain and to contribute to the structure in which my HanChain (HAN) price rises.
In the case of members who recently applied for music production on the special shopping platform, it is said that the amount deposited into their PayKhan wallet is about 2.6 million PayKhan per month. Even at this level, if more than 5 months have elapsed, all the PKNs consumed when applying for sound source production are recovered, and the value of these sound sources is guaranteed for up to 70 years, so the value is immeasurable.
The reason why a lot of institutions or individual capitalists have recently created a large amount of intellectual property (IP) is related to the popularity of K-POP and the systematic legal guarantee of copyright.
A composer who participated in our music production has said: “I have been immersed in music since I was a teenager and composing in earnest in college, but I have been frustrated that the music I have made is not eternal. I met HanChain Project while I was doing it, and I feel like I have finally found a way that can make my music last forever.” He experienced the system in which contents become income and the structure of value creation and consumption — income. With an income of over 10 million PKN per month, he vowed to do his best in the HanChain Project to realize his dream, which was difficult to sustain with passion alone amid big existing music service companies such as Mel**.
The HanChain project is confident that it will mark another big mark in the content market as an open platform that realizes a genuine sharing economy in which we all become owners, rather than a structure that distorts the market with the logic of capital.
We are producing music video and teaser video for each sound source serviced by MusiKhan of PayKhan Wallet. In other words, if we take the film industry as an example, we can understand that the main movie is a music video and the trailer is a teaser video. The music video is NFT tokenized as a product called MuViKhan and transmitted to each e-wallet, which makes it possible to trade in OpenSea, the world’s largest NFT exchange. The consumption structure and reward structure of music videos are similar to those of MusiKhan.
As for our sound sources (MusiKhan, MuViKhan, Teaser video, etc.), the consumption of sound sources will increase as the number of HanChain holders increases. Now, the income of about 2.6 million PKN per month will increase proportionally with the increase of members.
The teaser video is played on the official YouTube channel, not on PayKhan Wallet. It will form a virtuous cycle in which the general public will see the teaser video and flow into the official Telegram channel and PayKhan Wallet.
The 1st PayKhan International Awards, which will be held at the Paradise Hotel in Busan on July 12, will be a place where everyone can witness and take pride in the development of the blockchain-based web drama and sound source we have prepared so far.
Our musicians who have achieved excellent results here will hold a K-pop concert in Ho Chi Minh City with the most popular local singers early next year. Through this, we expect that we will have infinite pride in the fact that we are standing tall as a leading player in the blockchain-based content market.
Our goal is to realize the economic prosperity of HanChain holders and a genuine consumer-centered sharing economy. The zeitgeist is now moving from monopoly to sharing and from the capital to people. We have already implemented this spirit through the HanChain platform since 5 years ago, and have been silently realizing it with funds.
We do not call small successes in the process success. Only when we achieve the final success, we can give praise and applause to our life that has contributed to a huge change in society.
I hope we all can walk on the same road to the future.
HAN Blockchain Project