It’s summer, which means I spend most of my weekends traveling from one group of pretty people to the next. I’m the DJ who NPR has called “the commissioner of the Song of the Summer” and I stay busy. Whether they’re in LA, the Hamptons, or up in Saratoga Springs (come by this coming Saturday!). I play a song and then before it’s over I play another. People shake their butts. This is what I do. I love music. But I pretty much never go to festivals that I’m not playing.
There’s something about concerts that is just so uncool. It’s not cool to give a ticket scalper money that should go to the artist. It’s not cool that the only way to get tickets to these things is to pay huge fees. I can walk from my house to the best venue in New York City, Barclays Center, but if I want to get the two worst seats for Cardi B and Bruno Mars this October, they’re $101 each plus a $16.30 service fee and then $6.00 for an “order processing fee.” That’s a total of $240—and don’t get me started on concessions.
But there is a bright light on the horizon. Music industry insider Justin Blau—aka DJ 3LAU—is trying to use blockchain to build out a system that he’s putting to the test right now with his original “Our Music Festival.” Three months from now at the Greek Theater in Oakland, California, some of the biggest names in music, including Zedd and Big Sean, will perform an all-ages single-day festival. But really they are testing out a system which could dispose of all the waste that comes between musicians and their fans.
We talked to Blau about OMF and the use of blockchain technology.
Modern Consensus: I love music but I hate going to concerts. Can you fix that?
DJ 3LAU: “That’s what we’re trying to do. I think the biggest issue with any kind of live concert experience is there’s a lot of value being created, but a lot of waste, too. What Spotify did to music was it generated more captured value for artists. It worked because both artists and fans liked using the system. It’s not perfect, but when you see artists criticizing Spotify, they’re usually criticizing the revenue split deal that they have with their labels.
“What we want to do is to build tools that reward fans to things they’re already doing now. We’re starting with Our Music Festival. So imagine you’re a fan and you see a concert lineup announced. Think of everything that happens between then and when you leave the venue that you do that adds value, like telling their friends to buy tickets, allowing their data be shared. Also prevent fans from issues of fraud and counterfeiting, or highly inflated ticket prices due to speculators. We start small with a music festival. These are the best environments for creating values of the commons.”
MC: But where is your blockchain element?
3LAU: “When I learned about the power of distributed ledger technology, I knew I could have a positive impact on the community. So we partnered with the ethereum-based SINGULARDTV to kick it up and create out own token.”
MC: Walk me through it.
3LAU: “We announced our first festival months ago. We did our first crypto presale last Thursday. It sold out in 30 minutes. We offered BTC, LTC, ETH, and BCH—anything Coinbase supports. We accepted the coins and liquidated them ourselves. The platform is really great. A lot of fans who actually used it were excited. It was very efficient. It generates an address and once the payment is verified, you get an email saying your tickets will be sent just before the event.”
MC: But they don’t actually have the tickets yet?
3LAU: “The reason why we wait is that we want the entire userbase to know they can’t sell any tickets until the event. We’re trying to make it hard. Just that we were able to sell tickets with no fees was a big first in music.”
MC: How much are we talking about here?
3LAU: “Twenty-five dollars was the first round. We have to use conventional ticketing for the rest of the sales. We are limited in what we can do and how quickly we can do it.”
MC: Why not just sell them all for no fee if you can?
3LAU: “When all the regular tickets are sold out, we may add for support for more crypto tickets. We do have a deal in place with company called Frontgate who works with the venue had the rest of the tickets at the Greek Theater in Oakland. Our scaling works this way as a way of price discovery to find out what it is worth to that fan. We wanted to build community and let some people get tickets early and cheaper.”
MC: What’s the value of getting the early tickets?
3LAU: “When you incentivize people to buy tickets earlier, it helps both artists and experience creators to create liquidity. I can improve the experience for the fans and the artists. If everyone waits until the last minute, the experience creator would have to cut costs to be profitable.”
MC: You’re creating an ICO for every festival.
3LAU: “Sort of yes, sort of no. In this ticketing case, it’s not an ICO. But down the road, we want to redefine ticketing. We’re going test the platforms at our own events and release the code for everyone. The whole platform thing in the future won’t matter.”
MC: Got it. So to build out the concert ecosystem with rewards.
3LAU: “We’re trying incentivize fans to do things they are already doing and reward them for it. Buying tickets early, telling friends that you’re coming because you’re creating value for yourself by having people come have fun with you—we reward you for that referral. And then finally we reward you for opting in your data. Festivals generate huge amounts of data, so we will reward you as a fan for opting in that data. In the ideal world, the ticketing company collects all our data.”
MC: I’m assuming there’s an app.
3LAU: “Yes. The app is the interface that supports all the things we’re talking about. In the long term, we want the app to have wallet support. They can tell friends via the app, they can share on social media and get rewarded. They can vote on what artist they like the most. We can have them vote on their favorite food trucks. What we want to build into this app is to combat secondary markets [like reselling] tickets or food and drink credits. The No. 1 thing we care about is enabling fans to vote. The way we would enable those votes in the future, we’ll be able to stake tokens to vote on the artists you would see. Our goal is to bring festivals into the future.”
MC: It’s always bothered me that festivals generate money by selling access. But imagine that some of your biggest fans can’t afford the $1,200 meet-and-greet ticket. Imagine you’re a parent taking your kid to see their favorite artist and they can bring a friend. Are you really going to shell out $3,600 so you kid can get a selfie with Janalle Monet? No, but if you could turn fandom into something that adds value to the fan, then that would be the sweet spot.
3LAU: “How they’ll earn them is one thing, but how they’ll spend them is even more important. Meet and greets is one of the biggest things on our list. If you convince 10 friends to go to Lady Gaga, you generated $1,000 in ticket revenue, so you should get to go to a meet-and-greet or a backstage tour. Or say we have a festival and I want to teach a music production class at the festival. You can earn tokens that could pay for that. Now you’re learning to create your own music and seeing your favorite bands but you got access for $25.”
MC: Now this is bigger than just tickets.
3LAU: “A ticket is just a fiat transaction for proof of access. But if you can create value and obtain access, that’s the future of entertainment. You can contribute value. Then that rethinks the nature of access. There’s a special meet-and-greet ticket available by token. That fan has that right to sell that meet-and-greet level ticket for a higher price. Now all of a sudden, you can afford to eat or get a great parking spot. You’ve added value to the festival and now you can reap the rewards. We’re going to be forced to iterate as we go and build the things that fans actually use.”
MC: How can you protect it from the ICO problem? If people are buying tickets just to resell them like in an ICO, you’re just going to have ticket scalpers on your blockchain.
3LAU: “Exactly. If it requires all these engagements and activities, we can’t stop a secondary ticketing market. At some point it’s actually bad. There are good aspects of price changes. If early adopters can capture that value and create value, that’s great. Do people actually want to go or are they just speculators? We’re creating a reward system that only fans could want. We’re not doing an ICO; we’re all privately funded. This is not a means of capitalizing on fans. If we have people who capture the value and then don’t come to the festival, it’s bad for us. Ideally, speculators can’t capture the value.”
MC: This goes back to the original bitcoin whitepaper. The selfish-miner paradox. No one can cheat the system because playing by the rules is already rewarding.
3LAU: “Exactly, while there are certain centralized elements. I try to read the Bitcoin whitepaper once a week. And I think that there are elements—there are some projects which want to be fully decentralized. In our case, we will have central access point. But we believe in the concept of Minimum Viable Centralization. As much as we all know and understand Bitcoin, it still isn’t a part of the mainstream. Our goal is to give consumers a more accessible concept of cryptocurrency and gradually decentralize over time.”
MC: So if people can redeem this stuff for food and drinks at the festival, realistically this is a festival gift card.
3LAU: “I say ‘Festival SkyMiles.’ We’ll have fungible tokens, all of these things that are digital status. Maybe it’s like getting platinum status. Maybe that access is represented by a non-fungible token on our network. Should you have the right to sell that? Sure. We don’t control that marketplace. We ultimately want to give fans the power to price different things on our network. The whole idea of fans voting for a lineup; how do you know what a local population wants to see? Why not staff the fans? Makes it more efficient. There had to be a protocol for that. Maybe we have them ‘stake’ an artist by putting tokens down as their vote and then that gets them the tickets at a discount.”
MC: That would be great from a festival perspective. Your youngest fans are always going to be a little more on the cutting edge. Maybe they would go see a band that you the talent buyer has never heard of. But you can get that band cheaper than a headliner and still sell as many tickets. That will make the festival even better.
3LAU: “There’s so much potential here. We are going to iterate as we model our consumer behavior. The technology opened my eyes to the inefficiencies. I mean like pricing a festival. If fans could find new artists, then they could get them on their own stage at the festival and fans could power that. Decentralization as a concept opened my eyes to this. It’s a step in the right direction. We know we will have a real userbase because we sold out in half an hour. At the end of the day we’re trying to give power back.”
MC: Can you imagine decentralized concessions?
3LAU: “Yes. Give people the right to bid on a plot of land to put their food trucks. Then we don’t even worry about who is serving what. Maybe those food trucks keep most of their profits. Who knows how it will work? I love saying that ‘I don’t know’ because I really don’t know. The truth is that the potential is limitless.”
MC: This could be big.
3LAU: “The tech angle is all about bringing it mainstream. It’s not like getting a bunch of music people to shove a blockchain on something doesn’t help. Nor does it help to just have tech people run a music festival.”
MC: Where do you see this in five years?
3LAU: “I hope we sell out all of our events and every festival is asking up to use our technology. The biggest festivals will still succeed, but a lot of the other festivals struggle. And we’ll be there to help them. We’re half-sold out the day after tickets went on sale. I haven’t gotten an update today, but I wouldn’t be surprised if it were 75 percent sold.
“Zedd is headlining, Big Sean is playing right before. I’m playing, and then Matt & Kim and a YouTube performer named Charlotte Lawrence. It’s a single day afternoon to night event. We’ll see how it goes.”