I have just finished a long but highly successful trip to Tokyo where I presented at Blockchain Unchained to more than 300 well-informed participants, where I was asked a number of pertinent questions — I wanted to take stock for a few minutes and share my responses to them with you all.
Why is a fan-based eco-system important?
At FENIX, we are fully focused on transitioning aggressively to a fan-based ecosystem. In fact, all of our interactions with bands have been around bringing their fans onto the FENIX platform immediately upon completion of the ITO.
The way we explain it is this:
- Our intention, through our band reward system and other initiatives, is to have thousands of bands signed up to FENIX before we complete our ITO — is that realistic? See “How will you get adoption of FENIX” below.
- If we were to sign up 10,000 bands and conservatively assume that each band has an average of 500 fans, which would equate to an initial fan base of up to 5 million fans.
- We intend to ask our bands to activate their fan bases three weeks before the close of our ITO, which will involve three things:
- Bands will be able to send their App to their fans for the first time;
- Bands will explain to the fans that through the FENIX App, they will be
offering new products / experiences, many of which will be limited in number; and
- Fans will be able to buy such products / experiences on [x] date, which will be the day after closing of the ITO.
- These fans are not passive — we know that they are passionate about their favorite bands and that through FENIX, they are being provided with a whole new way to access products / experiences.
- What this means is that on the first day of trading, we believe that anyone wishing to sell their FENIX Tokens will be met with a wall of demand from fans wishing to buy product from their favorite bands.
- This demand will rapidly transition the user pool of FENIX Tokens from initial purchasers to fans.
Why is this important?
- Fans will principally buy tokens to immediately use them to acquire products /experiences;
- Because these products will be sold with prices fixed to one of six fiat
currencies, the value of the underlying FENIX Token will be largely irrelevant to the fan;
- Demand for the FENIX Tokens will therefore be driven by their utility, and not by the price of the FENIX Token; and
Therefore, as long as fans are striving to buy products from their favorite
bands, demand will remain.
This approach allows the utility nature of FENIX to create a natural hedge against downward pressure from people who may have elected to acquire FENIX Tokens for other purposes, as well as pressure arising from the digital token nature of the FENIX Token and the market’s perception of digital tokens in general. It also allows any sales of FENIX Tokens to create the liquidity required to flow through and power the FENIX ecosystem.
Talking to the Japanese community.
How will you get adoption of FENIX?
Now that we are sharing the Artist Dashboard with bands, we believe strongly that as soon as bands have access to FENIX, they will understand the benefits to them.
But in terms of underpinning that belief to make the likelihood of wide adoption even more certain, we are in the process of undertaking a number of key steps:
- We have our band reward system, which will launch in the first half of August. This provides the first 10,000 bands onto the FENIX Platform with up to US$1,000 in FENIX Tokens for trying out the FENIX platform — this is a meaningful amount for most musicians and has proved to be exciting to a number of them;
- We have also offered these bands an additional US$150 in FENIX Tokens for every band that they refer to FENIX who signs up. Each band that I have spoken to is excited to share FENIX with their peers, regardless of any bonus scheme that we may be offering;
- We are about to launch a comprehensive marketing and PR campaign through traditional media, as well as through key ambassadors, with a focus on bands and the benefits of the FENIX platform to them;
- We have identified, and are in discussions with, a number of bodies that represent large groups of independent bands (some as large as thousands of bands), explaining the benefits of FENIX for their members — we are seeking their endorsement of FENIX and a recommendation from them of FENIX to their members and it is clear that we will receive both in many quarters; and
- We have direct points of contact to several thousand bands that we will be reaching out to individually and inviting them to try FENIX through our band reward program.
It’s also important when we talk about adoption to understand the power of scale with a global proposition like FENIX. It is estimated that there are eight million bands in the world, a tiny percentage of which are currently signed to labels.
If we make the following assumptions:
- The average band has 500 fans — we accept that some will have many more and others will have a fraction of that number, but lets assume that as a reasonable number; and
- Every band introduces FENIX to five bands.
If we start with:
- a pool of 100 bands, and
- each band introduces it to five bands,
- who each introduce it to five bands,
That amounts to 15,600 bands, or 7.8 million fans, which are both big numbers. However, to put kickstarting it all off into context, an initial pool of 100 bands could be seeded with only ten bands in each of ten cities — a far more manageable number, which would still lead to 7.8 million fans.
Now multiply that by 10 to 1,000 bands — up to 78 million fans and you get the idea…
With music, you have a truly global proposition and one that could scale at an alarmingly fast rate. And if that audience comes onboard because they are after something that they really want — then we truly have an ecosystem that is capable of redefining the music space.
Now, the beauty of having founders who have been around for a long time is that we don’t take anything for granted, and in particular, we don’t rely on anything as fickle as organic or viral growth. Hence the various initiatives that we have set out above. Once these initiatives are implemented, we consider they are likely to foster explosive organic growth, even if we are not relying on that.
We believe that FENIX has the ability to be a massive proposition and a great medium by which to introduce the mass market to the elements that the block chain and a digital currency have to offer. The numbers support that belief and our strategy to kickstart the adoption of FENIX will be adopted across a number of channels.
Aren’t you going to battle with the existing industry heavyweights?
We honestly believe that this is missing the point — FENIX is there for the millions of bands that are below the radar of the existing labels and music services. If anything, we are giving artists a stage where anyone can come and see them — existing fans, new fans, labels, producers — the more the merrier…
If a label were to see a band on FENIX and feel that they would like to offer them a label deal, then they do so with our blessing. Of course, the beauty of being decentralised is that it will then be up to the band as to whether they wish to accept such a deal and the costs that comes with it.
And if improving transparency, reducing breakage and providing distribution for artists without massive costs associated is considered going to battle, then that is a war that we at FENIX are more than happy to engage in.
Why don’t you get the big celebrities onto FENIX?
We understand the importance of a new product being endorsed by high profile personalities. However, what we want to avoid is making the FENIX platform into something that it isn’t for the sake of celebrity endorsement.
At its very core, FENIX is about the provision of a platform to assist those artists that don’t have the luxury of the infrastructure that comes with being a major celebrity. It is also about providing better points of access for fan bases of smaller bands who just don’t have the means to create that point of contact.
BuzzAngleMusic reported that 99% of the 377 billion music streams in 2017 came from the top 10% of the most streamed tracks. This is the imbalance that FENIX is trying to address — to allow the 99% a platform for their craft. It is also the reason why we don’t believe that FENIX is a platform for those artists already signed to label deals — those guys have lots of support already.
Having said that, we are talking to a number of celebrities and ambassadors about FENIX and while they are all excited about what FENIX has to offer. we are not asking them in the first instance about putting their music onto FENIX.
One pleasant thing that has impressed me about the band community is that those who have made it, more often than not, are happy to do what they can to help other bands on the way up. What we are looking into is how best we can use FENIX RISING to give these celebrity artists a platform to use their own brand to introduce the world to their favorite upcoming artists.
Watch this space because there are going to be some exciting endorsements coming up that are a bit more creative in terms of allowing established artists to help artists through the FENIX platform.
There are lots of music propositions involving the blockchain out there — Why is FENIX any different?
I hear this one a lot and it’s something I’ve heard about differing businesses many times throughout my career. In the case of FENIX, I believe the answer is clearer than most other cases:
- FENIX has started with a problem and a solution, rather than looking at the technology as the starting point:
- More money and better distribution for bands; and
- Better access for fans to their favourite bands.
- We have not tried to change things beyond our control, nor have we relied on people behaving in any way other than their own best interests.
- We have focused on adoption by both bands and their fans and have worked hard to create a means to distribute FENIX and a proposition that is instantly attractive to both sets of key stakeholders.
- Once FENIX is widely adopted and improving the life of everyone within the ecosystem, then introducing key blockchain elements will be simple and will need little justification.
I have yet to find a proposition that addresses all of these issues at its outset and therefore remain entirely confident that FENIX has the ability to outperform any of the other music offerings already in the market or about to be launched.
I have tried to address some of the questions that I have been asked at various stages over the last couple of weeks. I would however note that for every question of concern there has been an overwhelming amount of positive feedback about FENIX and how we are going about implementing it in the coming weeks.
I will be on the ground in Melbourne this week, focusing on the feedback we have received on the Artist Dashboard and finetuning the App, as well as working with my co-founders on a number of other key announcements — watch this space… There’s lots more to come.