This 1001 Blockchain based startup idea from YoStartups is to start a Blockchain based IP Protection Platform for protecting Intellectual Property rights in the music and art industry. It will help artists in getting fair value for their work
Market Definition for Blockchain based IP Protection Platform
According to IP commission report published in May 2013, the losses incurred in the US alone due to the infringement of IP rights were more than $ 300 billion in revenue and 750,000 lost jobs.
The U.S. economy estimated annual losses of $12.5 billion in direct and indirect revenues and loss of 71,000 jobs every year due to music theft. From 2004 through 2009 alone, approximately 30 billion songs were illegally downloaded on a file-sharing network and without any compensation to all the people who helped in making that song and bring it to fans.
Additionally, the UK government report highlighted IP theft as the most damaging cybercrime for UK businesses, resulting in a loss of £9.2 billion a year. A report published by the European Union Intellectual Property Office (EUIPO) estimated €78 million in damages to record sales due to piracy in the UK. In India, piracy is resulting in a revenue loss of $4 billion to $5 billion annually for the Media and Entertainment Industry.
One of the ways, how privacy can be reduced is by encoding copyrights of art, music digitally with a timestamp on a blockchain and create an encrypted tamperproof unique ID, this ID can be used to share his work for downloads, collaboration licensing, etc. In this way, the artist can share his work directly with the fans, fix up the pricing upfront which can be coded on a self-executing blockchain smartcontract, which gets executed everytime his work is used, and the payment is split on a blockchain and sent directly to the artist.
Competitor Analysis for Blockchain based IP Protection Platform
San Francisco-based startup Binded, is a blockchain-based platform to allow artists to register their authorship of their works at the moment of creation. Over 10,000 artists are currently using Binded, with roughly over 10 million copyright records since its launch in March 2016. They have presently tied up with over 20 marketplaces on which the artists can sell their work directly using customised smartcontracts.
Ujo Music is an Ethereum blockchain based company that is working with music software services company. It helps musicians to get paid more, where fans and other artists can connect with the musicians directly to download, collaborate or remix the original work via smart contracts and the payment will happen over blockchain and paid directly to the artist. Thus making the whole ecosystem of recording labels, managers, publishers redundant and getting paid more for their work. They have already completed one pilot project with singer-songwriter Imogen Heap successfully.
CopyRobo, another blockchain based startup from Vietnam, is creating global and multi-local proofs for artist’s works in association with 28 EU Countries using blockchain platforms like Ethereum, with Qualified Timestamps from the EU countries.
They are currently the only blockchain based startup that is authorized to officially sign contracts with multiple EU countries using iOS, Android, and web application.
Pain Point and Target Audience for Blockchain based IP Protection Platform
Artists, singers, and songwriters often don’t get paid enough for all their work used online due to ambiguous global copyrights law. This means that for an artist to get rewarded for his work used each time has to get his work registered with the copyrights authorities in every country of use, which can be cumbersome and expensive. Arbitration is costly across borders because proving provenance, and ownership right can be a lengthy process.
However, using the proposed blockchain platform, artists can create a secure digital copyright vault of their works which can be accessed and verified globally by anyone, enabling artists to collaborate, license their work without the need for intermediaries and high transaction costs.
Value proposition for Blockchain based IP Protection Platform
Blockchain databases like Ethereum, Hyperledger, and Bitcoin are secured on a large number of nodes (computers), and each of these nodes share their computational power to complete a transaction. It would require a lot of computational power to hack this database, which is practically impossible due to current hardware limitations.
Listed content on these platforms issues a unique Blockchain ID using a time stamp. And as the blockchains are permissionless and distributed, anyone can verify the proof of existence, authenticity, origin, and ownership of the listing without any special skills using the registry, saving thousands of dollars in legal fees to validate and transfer.
Transfer of ownership can be done almost in real-time because of the distributed nature of blockchain database. The new owner will be issued a unique blockchain ID with the previous history of ownership.
Business Model for Blockchain based IP Protection Platform
The proposed startup will have to create a blockchain based online repository for digital art, literature, music, etc. This platform will create a unique blockchain encrypted ID for each item listed on its blockchain. This unique ID can be tagged with the items to be sold on the online marketplaces. Everytime a transaction takes place; a smart contract which is pre-programmed mutually between artist and platform gets executed, the startup receives a fixed transaction fee for the transfer of ownership on the platform, and the artist gets paid for the use of its work.
The startup can also sell the subscription on a SaaS model to private art collectors, art galleries, online marketplaces to verify the authenticity and ownership of the art before buying and selling.
Way to Market for Blockchain based IP Protection Platform
The startup will have to start enrolling local artists to create a digital repository of art, music, and literature. A unique blockchain encrypted ID for each item listed on its platform is generated to establish authenticity and ownership of the registered content.
Then the startup will have to start engaging the legal community to build the legal framework for the platform. Once the platform is ready, it can start sharing API’s with online marketplaces to test the platform’s interoperability with the selling platforms. Once the platform is found compatible, it can be marketed and sold on a SaaS-based model to artists, art collectors, and law professionals.
Milestones for Blockchain based IP Protection Platform
The startup will have to develop a blockchain based online platform and start onboarding local artists and create digitally signed copyrights on the blockchain within the first six months. After the platform is built and the database is updated, the company will have to run a pilot with one of the local online marketplaces by integrating with its API. Once the pilot is complete, the startup can grow globally by tieing up with marketplaces across the world.
Investment Needed for Prototyping of Blockchain based IP Protection Platform
The proposed startup will need to raise up to $100k from blockchain accelerators like BlockChain Trust Accelerator, Boost VC, Chicago’s Bitcoin Center to develop an online platform which can create and record unique digital identities. The blockchain platforms can be built on some of the most popular platforms like Ethereum, Hyperledger or Bitcoin.
Team Capability for Blockchain based IP Protection Platform
Investors/Expert Take for Blockchain based IP Protection Platform
We often mention that creativity has no borders but is still bound by legal. If all the artists can digitally copyright and secure their works on blockchain with a timestamp, they can monetize their creations globally without the fear of global copyright infringement and their inability to prove the ownership of their work across borders. However, the legal sanctity of blockchain based records is questionable because of its lack of use and slow adoption. Few US states are recognizing the merits of blockchain based recordkeeping and trying to set up a framework to accept smartcontracts as any other regular contracts. Vermont has already adopted a new blockchain law, and other states like Hawaii, Illinois, Arizona, Delaware, New Hampshire are expected to follow suit.
A blockchain based IP recording registry can support artists by creating a tamper-proof record of ownership and ensure the use of their work can be appropriately compensated while placing the authority in the hands of the creator to share his works with anyone without the need for the third parties.
This 1001 startup idea article is from Yostartups, YoStartups is a Pre Accelerator and it empowers entrepreneurs to propel their business ideas into successful ventures. Yostartups’ core mission is to take the message of entrepreneurship to 1 billion people globally by 2020.
In case you are looking at scaling or launching a venture on similar lines, you can apply for our virtual acceleration program Excelrate on our website, Yostartups.com, Yostartups’ Excelrate program will help you in streamlining and structuring your startup idea. We have limited scholarships and discount packs for deserving startups, depending on the strength of your application, you may qualify for a discount.