Potentiam — Disrupting the Music Industry through Blockchain Integration
It has been a long and bitter fight, wresting control of music creation from draconian music labels and uncaring corporations. The turn of the millennium saw peer to peer networking storm onto the scene, and subsequently get snuffed out by a strong bout of technophobia. It would be years before streaming digital music services became the norm, starting with iTunes before expanding into dozens of platforms. None of these advances have changed the inherent dynamic within music –you needed at least an agent and probably a full label backing your music in order to get listed, noticed and distributed.
The advent of blockchain technology could be just as much of a shock to the system as the original P2P networks. With the right momentum and leverage, it could even succeed in breaking free from the traditional music model, something that new comer Potentiam (https://www.potentiam.io/) is betting on. They’re new platform is designed to give the power back to individual artists, harnessing the power of blockchain distribution to seize control from the record labels. Their recent partnership has brought them over 5,000 artists to test the platform, and to seed the start of their social network.
The Potentiam Core
As outlined in their Whitepaper, Potentiam’s foundation is the powerful Core module, upon which everything else is based. Potentiam Core is built from the ground up as a private social network that will allow individuals within the music industry to seek out one another, and to advertise their skill sets for collaboration. Once a team has been assembled, they will then have the ability to use the internal digital production studio for the creation of music itself. The digital production studio portion of the Potentiam Core module is a fully featured audio work suite integrated directly into the blockchain network.
From there, they can work together on all aspects of their creation, and ultimately port it directly over to the Potentiam Core catalog management system. This blockchain based database has an array of features that will help artists distribute use licenses to end consumers. It also allows groups to partition out copyrights by formal agreement within the system. From there, the composition is available to the network at large for use in their music creation. Once another user has sampled the original composition and completed their own music, the original producer is prompted for licensing approval and terms. Until a final agreement is decided upon, the derivative work is not published to the artist’s catalog.
Now that the artist has a complete master recording in their catalog, they have a myriad of options available to them for distribution. Outside of the Potentiam Core, there are multiple modules designed around distributing, promoting and funding an artist’s work. Potentiam itself takes only a 10–15% fee on generated revenue through their platform. This is in stark contrast to traditional record labels, which can often take up to 80% of an artist’s revenue. This is good news for both the artist and the fans searching out their work — lower overhead means lower prices, but higher share of the revenue means a net gain for the producers compared to the conventional model.
The Potentiam Modules
Digital Distribution Module
- The digital distribution module is a gateway to the established internet music marketplace. Users will be able to access traditional digital service providers, such as iTunes and Spotify, through the module’s website. Using this system, Potentiam will make DSP integration seamless and simple, while also managing the digital rights and royalties in a single location.
- Revenue generated from the digital service provider is then routed back through Potentiam’s system and distributed via smart contract to the original artist. This allows the artist to work, create and distribute entirely via Potentiam’s system, while still having access to the user base of the established music marketplaces.
Physical Distribution Module
- While physical media has been on a downtrend lately, there is still a large demand for real world possession of music. To help facilitate this market, Potentiam will provide manufacturers with access to the music catalog through their own, specific web portal.
- Manufacturers would be able to license music to produce their own physical media, items such as vinyl or CDs. The license would apply to a certain production amount, and revenue generated from this process would be distributed back to the artists through the Potentiam network’s smart contracts.
- Potential clients would be provided with lists of curated content, such as trending or popular songs within the network. They would also be able to search the entire catalog database through a variety of functions including artist and genre.
Sync Licensing Module
- Accessing a lesser known profit source, the sync licensing module provides artist’s work to other content creators that are in need of a soundtrack. This includes movie production, advertising and even video game soundtracks. Companies looking for sync licensing will place a bid that can then be accepted or rejected by the original artist.
- The sync licensing module will use a proprietary artificial intelligence system to sort, categorize and curate the entire Potentiam catalog. Potential clients can then use this system to find the perfect music for their production, searching by non-traditional categories like mood and tempo.
Public Performance Licensing Module
- The final licensing module covers public broadcasting use of artist’s work. The public performance licensing module grants access to the entire Potentiam catalog for a flat fee. Music can then be used from within the catalog for public performances that include radio and event music.
- Potentiam will seek out active partnerships with performance rights societies, traditional groups that oversee public performances and ensure that the proper royalties are paid based on the use of the catalog. These societies collect revenue and distribute it to the original artist.
Booking Agent Module
- One of two modules not designed or direct distribution, the booking agent module is a web portal created to bring together artists with live venues that need talent. These venues can access an additional web portal to browse artists that have made themselves available for public performances. Alternately, the venue itself can advertise dates and times they require live music.
- The booking agent module will have a robust set of features to allow internal agreements over incidental costs like transportation and housing during the event. All payment transactions are handled directly through Potentiam, allowing the artist to continue using a single location for all of their payment needs.
The Potentiam Artist Crowdfunder
- The final Potentiam module creates a space to help artists reach their goals. Potential artists can set up a campaign within the artist crowdfunding module to help offset the initial cost of bringing their music to market. This can be anything from start-up capital for recording equipment to full-blown, high-concept ideas that require significant funding.
- The artist crowdfunding module links artists from the Potentiam Core to the written content creation Potentiam Classic system. The Core module provides the mechanism for accepting Potentiam tokens, while the Classic system links fans to artists and allows them to contribute the tokens.
In addition to the content creation and distribution abilities of Potentiam Core, there will also be a crowd-sourced contribution platform called Potentiam Classic. This platform will serve as the marketing and public relations arm of the more music creation oriented Core platform. On Potentiam Classic, artists and fans alike can come together to discuss upcoming music and trending artists with a fully featured blogging and article hosting service.
Much as the site Steemit has done for the blockchain space as a whole, Potentiam Classic will provide an outlet for the written word in relation to the music scene. Users are rewarded for good content, creating incentive for them to produce posts that help further Potentiam artists and the Potentiam platform as a whole. Artists can in turn use the Classic platform to help drive users towards their crowdfunding campaigns and music catalogs.
Potentiam and Clout
The lifeblood of the Potentiam content creation system is the PTM token. Created using the ERC-20 standard established by the Ethereum Project, the PTM token is a smart contract capable currency that is used for all forms of transactions within the Potentiam platform. All transactions and fees within the system are placed within a centralized Potentiam Pool for distribution in 30 day periods. Every 30 days, the full Potentiam Pool is divided into three portions; content creation rewards, vault node dividends and the development fund.
A secondary token, Clout, is used solely within the Potentiam Classic ecosystem to determine the quality and reach of user content. Clout is curated by the users, with each receiving 100 upon joining for the use of promoting content. Awarded Clout in this manner becomes Article Power, the metric used to determine trending and popular articles, which stays in effect for 30 days. At the end of that 30 day period, the amount is returned to the original curator for further use.
Clout and article power also help determine the percentage of PTM reward distribution that is gained by the creator. Their personal article power is compared against the total article power for that 30 day period, and they receive a proportional amount of the monthly content reward total as a result. This process will help drive content creation, while rewarding those that consistently provide high quality content to the platform.
The Potentiam Vault
There are several ways that blockchain cryptocurrencies can choose to generate dividends for their investors. Potentiam is considered a Proof of Stake token, which means that investors and holders are rewarded based on the amount of Potentiam that they hold. This is, however, dependent on the somewhat unique Vault system that Potentiam has put into place.
While users always have the option of storing their PTM tokens in their platform wallet, or on any ERC-20 compatible exterior wallet, neither of these options count towards their Proof of Stake dividends. Instead, users can choose to place an amount of PTM into their Potentiam Vault, where they will remain for a set period as determine ahead of time by the system. Tokens within the vault are eligible for vault rewards, collected from the transaction fees for that month. There is a minimum of 10,000 PTM to create a single vault node, but users with less than that amount will have the option of joining other users to create a communal vault node. They will then receive a reward that is directly proportional to the amount they contribute towards that vault node.
As an emerging technology, blockchain is taking the world by storm. Every industry is, in some way, integrated either the decentralized or distributed ledger aspects of the system — and some conventional businesses have discovered that simply adding “blockchain” to their name is enough to spur growth. In the same way that we saw direct peer to peer networking completely change the face of the music industry, we may soon see blockchain do the same.
Potentiam is placing themselves in a position to provide the first platform for blockchain music creation and distribution. Perhaps more importantly, they are doing so with a fully featured creation suite and catalog database that brings them to the market as a true, instant competitor to some of the more established competitors in the music scene. When the platform is fully launched, we can expect “Potentiam” to join industry leaders like iTunes, Pandora and Spotify in name brand recognition as a distribution method.
However, it is the complete vertical integration of all aspects of music creation that will really set the platform apart. Allowing artists to create, collaborate, market and distribute, all in one location, sets Potentiam apart from any of their immediate competitors. The recent addition of 5,000 artists to their alpha test ensures that Potentiam will hit the ground running. That level of engagement, in a platform that has yet to be officially released, suggests a system that is already working well — and that will be polished to a mirror finish before public release. Assuming Potentiam delivers on their promised content, there is no doubt that they will be a music distribution powerhouse in the future.