Could This Blockchain Venture Help Find The Whopping $2.5B That Eludes The Music Industry?
It was that time of the year again when certain companies were in the midst of a flurry of activity preparing for the annual SXSW conference which took place in Austin, Texas this month. While many professionals still very much debate whether or not this particular festival still has the relevancy it once had, a few new companies, many of them tech-based were hoping to use the event to take their startups to the next level via the Festival’s “Release It” pitch competition. And one female founder, in particular, was planning to pull out all the stops.
Ahead of the conference, Farah Allen, founder of The Labz, was furiously working with her team to not only prepare for the competition at SXSW but also hit a couple of key internal benchmarks for her company, simultaneously. This was about little sleep and massive focus given that Allen’s company was one of only ten companies selected by Festival officials from over 9000 applicants chosen for the spotlight, and with each moment she was thinking, as per lyrics of rap legend Tupac, “All Eyez On Me.”
A blockchain venture with a tech solution for the music industry
Primarily, The Labz seeks to solve a pain point that has existed in the music industry nearly since its inception. According to a recent story in Digital Music News, nearly $2.5 billion in revenue goes unclaimed in the music industry because the overall ecosystem is lacking in efficiency and transparency. So Allen decided to do something about it.
“I was solving asset management and data intelligence issues for large organizations in other industries for the past 15 years,” explains Allen. “And it is normal for those businesses to automate workflows. I heard (recording artist/actor) Jamie Foxx say on his radio show one day that he never got paid for “Blame It” because 30 people claimed that they co-wrote the song, and there were never any documents to prove otherwise. I kept hearing other stories like this over and over so I decided to transfer my skills to solving this data issue for the music industry.”
Thus, The Labz was born and now armed with investment from both Comcast Universal and Quake Capital, it currently touts itself as a new platform that makes owning the rights to one’s creative work as easy as file sharing and writing lyrics. The company accomplishes this task by combining the creative workflow of digital communication with complex business intelligence and asset protection technologies such as AI, electronic documentation and blockchain technology.
Here’s how it works. A user starts a song within the platform. The user then invites collaborators to begin working on the platform workspace via standard tools such as audio sharing and lyric writing and messaging.
During this process, The Labz collects data on who is contributing to what, when, the percentage of the contribution and more. That data is then tracked, calculated, and transformed into the needed documents to demonstrate ownership. An e-signature workflow is in place so that ownership is officially accepted by all collaborators and memorialized on a Blockchain step-by-step.
Within the first seven months of the launch, the company secured more than 4,320 new beta signups and 22 partnerships which brought its community pipeline to 4.5 million, according to the startup.
The Labz is relying upon a monthly subscription business model in order to generate revenue. The challenge, however, will be to generate enough consistent traction and interest to create a viable product in an arena that has yet to demonstrate significant and meaningful pilots or more. The Labz will also need to fend off potentially fierce competitors such as a European-based company called Auddly in order to establish brand awareness and differentiated value-proposition in an industry that has typically been the target of emerging technology rather than that which takes a proactive approach to leveraging such tools.
But Allen is undaunted. As one of the first women in the space on this particular level, she is quite familiar with challenge and hurdles to overcome. Success will depend upon, as usual, being nimble and creative within a realm where the stakes are high and the limits few.
This article originally appeared in Forbes.