My team, Web3 Studio, was a research and development arm of ConsenSys. We were looking to advance the usage of the Ethereum blockchain in novel and valuable ways. We believe there are several use cases in which the sports and entertainment industry might benefit from this new technology. The Bootleg project was the first test out of nine performed. This project was showcased at the 2019 SXSW Conference.
Musicians lose revenue due to piracy and unauthorized distribution of their music. Protecting their intellectual property is incredibly challenging and a large motivation for us taking on digital rights management with our first project.
Musicians often face irregular income streams, especially when they rely on live performances or royalties. Streaming has become the dominant mode of music consumption, but the revenue generated from streaming platforms can be quite low, especially for independent and emerging artists.
The full vision comes from a longer story by Product Owner John Wolpert. The TLDR version is as follows: How might we turn pirates into employers of the band? Imagine loving concerts and being legally able to take videos at a show and sell those videos for profit that benefit you and the band. What would that look like?
Highlighting the riskiest assumptions is a critical step in the process of developing and testing a new business idea, product, or service. This practice is often associated with the Lean Startup methodology, which emphasizes iterative and evidence-based decision-making. Here were a few of ours that we needed to test quickly:
Are musicians willing to try this experience out with fan involvement?
Will fans be willing employees? Will inclusion help to stop piracy?
Do fans even care about the end product and enough so to create value?
Is Ethereum the right tech solution? Will it even work?
Discussing abstract benefits and assessing their relative importance can be challenging for customers. Often, these discussions are prone to inaccuracies. The primary responsibility of a product team is to uncover these underlying needs and define the problem space. Initially, we had several hypotheses, and our aim was to swiftly and efficiently validate or debunk them. To accomplish this, we opted for qualitative research involving individuals we believed represented our target audience.
Since our concept was entirely new, we aimed to present something tangible to customers for their reactions. We initiated the process by conducting customer interviews and showcasing storyboards. As we gathered valuable feedback, we progressed to creating wireframes and, ultimately, developed interactive prototypes.
As expected, the demographic divided into two distinct age groups. Participants aged 40 and above displayed a higher level of enthusiasm in their dedication to particular musicians. When informed that they could make a real purchase during to the testing, 40% of them were ready to use their credit cards for the transaction. In contrast, the group under the age of 40 did not share the same inclination. Their focus was more on the social validation of attending events. Interestingly, the under 40 demographic demonstrated a notably greater passion for the idea of potentially becoming a bootlegger themselves.
Of participants over 40 years old were willing to buy a collectible.
Of participants under 40 years old wanted to pay for the collectible.
We conducted interviews with both musicians and band managers to gain a deeper understanding of the problem landscape. The nature of the issues varied depending on the musicians' level of popularity. A small percentage of interviewees belonged to the category of larger fan-based musicians who grapple with challenges related to Digital Rights Management. Despite being a minority, this demographic face significant financial losses due to unauthorized distribution of their music.
The more prominent issues, on the other hand, primarily revolved around the ticketing industry, streaming revenue, and, for smaller bands, access to essential resources like recording studios and marketing expertise. Bootlegging was not perceived as a major problem by most musicians, and the majority expressed a desire for fans to refrain from using smartphones during their live performances.
It is noteworthy that smaller fan-based bands exhibited enthusiasm for the idea of fans potentially recording videos of their shows. This enthusiasm stemmed from their limited budgets, which often couldn't accommodate the hiring of a professional videographer.
Despite our initial testing not yielding any positive signals, we were determined to explore the real-world potential of this concept. Additionally, we sought to assess the feasibility of the underlying technology stack. We asked ourselves if it was genuinely possible to develop a platform for selling videos that would pay royalties to both the musician and the individual who captured the concert, with ongoing payments each time the video changed hands.
Our engineering efforts were concentrated on building this platform, while we conducted a Wizard of Oz test for the bootlegging experience. We chose to execute this test during SXSW. During the event, we organized a "Bootleg Contest" and encouraged audience members to record a performance by our friends, OutsideOutside. Participants submitted their videos through a link provided by our team, and the band selected their preferred bootleg recording to represent them.
Following this, we tokenized the chosen video and conducted a trade on a platform developed by our engineers. To make the process more exciting, we arranged a video call involving the band, the videographer, and five prominent crypto enthusiasts who purchased and traded the video during the call. Remarkably, the entire process unfolded seamlessly and without any issues.
The Bootleg project achieved relative success. The initial concept of bootlegging and selling concert videos with an Amway-style business model didn't hit the mark. Nevertheless, through prototype development, we engaged real users in contextual inquiry, obtaining genuine reactions and behaviors. This guided us toward new problem areas where we could deliver value. Here are some of the successes:
Creating smart contracts on the Ethereum blockchain to distribute future royalties to multiple parties is possible. (Update: OpenSea has since implemented this, but it was an innovative concept in March 2019.)
Smart contracts could enable artists to grant permission to other artists, social media creators, and advertisers to sample their music. This innovation has the potential to reduce financial losses from legal disputes over unauthorized sampling.
Digital memorabilia could transform into password replacements for gated website and app content, or even serve as digital keys to unlock physical doors at venues, granting super fans the opportunity to meet the musician in person.
