Ottawa-based Lixar brings cryptocurrencies to local music scene

Bill Syrros.
Lixar CEO Bill Syrros believes blockchain could be the future of the music industry's revenue models, and he's starting with a local experiment. Photo by Mark Holleron.

Artists playing this weekend’s Megaphono festival might be the first in the world to be paid royalties in cryptocurrency, thanks to an Ottawa firm’s app.

Software firm Lixar has developed an application for the festival that will track song plays on a blockchain and reward artists with 25 cents (CAD) worth of LiteCoin, a popular cryptocurrency, for every complete listen. Lixar itself will foot the bill.

It’s a unique alternative to today’s revenue models for up-and-coming bands, which often rely on royalties from radio plays, try to get attention on streaming platforms such as Spotify or simply survive gig-to-gig.

Lixar has always had an ear for sound, as the local firm has been the lead sponsor of Megaphono – an Ottawa music showcase – for the past four years, as well as the Halifax Pop Explosion and national Polaris Music Prize. The firm is running the platform through its LWAYVE software, an app that gives audio cues and nearby suggestions based on your surroundings.

Bill Syrros, Lixar’s CEO and self-confessed audiophile, says this experiment could be a model for music festivals and corporate sponsorships as the popularity of cryptocurrencies grows.

“This has never been done before. It can be a model that every festival can use,” he tells OBJ.

“This is the future.”

Future sounds

Colleen Jones, whose band Sparklesaurus is among those playing Megaphono this weekend, says she was intrigued when she first learned about the idea.

“I had heard of cryptocurrency … but never actually looked into it in detail until I got the email,” she says.

Sparklesaurus has found success in the local scene, including making the lineup for last year’s Bluesfest. The band has a new album coming out in the spring and is hoping to play the festival circuit in the summer months.

While Jones isn’t one to write off the potential of cryptocurrencies such as LiteCoin, she does say that getting paid royalties in Canadian dollars is a bit more practical to cover the band’s expenses.

“Usually, we would get a cheque. And that does pay the bills,” she says.

Sparklesaurus
Colleen Jones (right) and her band, Sparklesaurus. Gal Capone Photography.

Lixar will work with musicians after the festival wraps to set up their own digital wallets and explain how to exchange LiteCoin into fiat money, if they so choose.

Syrros says the app is relatively small-scale in terms of financial contributions to the bands. The real value, he suggests, is educational.

“Are artists going to get rich over this? No, but it’s a different way to think of the whole transactional process around royalties,” he says.

Syrros imagines a future just a few years down the line where corporations use blockchain and cryptocurrencies to directly sponsor musicians: Put down $25,000, track streaming over a secure blockchain and ensure that the money is going directly to the artists.

Even further down the road, if cryptocurrency point-of-sale systems go mainstream, bands could accept digital cash for merchandise sales.

Syrros says musicians are rarely on the cutting edge when it comes to upheavals in fintech – how many times have you bought a CD from the trunk of a car? – but this app could be their gateway to the coming digital revolution.

“The reality is that artists today are not accepting cryptocurrency. But tomorrow, that might be what the norm is. We’re going to help them way ahead of the game.”

Opening the show

There’s a case to be made for a blockchain-verified royalty solution. While platforms such as Spotify and Apple Music are emerging as the go-to destination to discover and listen to new music, it’s a bit confusing as to how artists are accordingly compensated.

The amount Spotify actually pays out to artists varies based on the country a song is streamed in, whether it was a premium user listening and more. Even then, payments often go direct to labels, leaving it up to these rights holders to divide up royalties.

Most estimates online put the average payment per song streamed below one hundredth of a cent.

You can hear Sparklesaurus’ colourful harmonies on the platform, but Jones says there’s “definitely room for improvement.”

“I’m paying for my band’s music to be on Spotify. It’s not the other way around.”

Jones says she likes the open nature of Lixar’s solution.

“The reality is that artists today are not accepting cryptocurrency. But tomorrow, that might be what the norm is. We’re going to help them way ahead of the game.”

Syrros says the disparity between the Drakes of the world and local musicians on Spotify is part of what inspired he and his team to create a blockchain-based solution, where clarity is paramount – information posted on a blockchain can’t be amended without a clear trail.

“It’s the first time where everything is transparent,” Syrros says. “It’s such a clean model for (local musicians) getting paid for their creative artifacts.”

Syrros believes the Megaphono application will put local musicians on the forefront of music history. If it catches on, the blockchain royalty experiment could redefine the industry’s revenue models – and that kind of legacy strikes a chord with Syrros.

“If I can run a company and we’re going to be successful, I want to take some of that success and use it to influence music in some form or another,” he says.

“It’s a passion and a love affair that I have with music itself.”