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Background
Mint Season 4 episode 31 welcomes Paul Zehetmayr, the new co-CEO of LimeWire, the discontinued peer-to-peer file-sharing software that we all loved and abused in the early 2000s. Paul and his partner are revamping the iconic brand, but taking it in a new direction to focus on music NFTs.
In this episode, we discuss:
- 00:00 – Intro
- 2:07 – Step Aside RIAA, LimeWire is Back
- 11:19 – What Traits Go into Valuing Music NFT’s?
- 20:02 – What Makes a Music Artists Valuable in Web3 From a Collector’s Point of View
- 29:23 – Why Experimentation is Key: Understanding the Collector’s Mindset
- 33:52 – Do Music NFTs Work in Favor of Record Labels?
- 39:12 – Bringing Back the Golden Era of Internet Interconnectivity
- 46:35 – How LimeWire Will Tackle IP On-Chain
- 51:12 – What Would Cause the Downfall of Music NFTs?
- 54:34 – Outro
…and so much more.
I hope you enjoy our conversation.
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Intro
Paul, welcome to mint. My friend. Thank you so much for being on, very excited to have you on, how are you doing?
Paul Zehetmayr: Thanks very much. I’m very good. Thanks a lot, for having me.
Got it. You got it calling in you said from Vienna, Austria. Right?
Paul Zehetmayr: For sure. From Vienna. We just found out you were based in Vienna some time ago as well.
I used to live in Vienna. Yes. But that’s not important. Right now. What’s more, is LimeWire is back, back, better in action. Okay, I want to start this thing with an introduction. Okay. Who are you Paul, I’m curious to learn more about who you are personally. More of LimeWire is rejuvenated team and why you’re bringing back this iconic brand.
Paul Zehetmayr: Sure, happy to. So, I’m Paul actually been in the b2b and tech space for the better parts of the last 10 years, working together with my brother Julian. We’ve done lots of different projects, we’ve had, we’ve launched an e-signature company called ever sign pretty much competing with DocuSign. Overseas, we built an API portfolio called API layer, it was continued like 20 Different micro service API products, also aimed at specific niches in the b2b space, which is sold that off last year to a company called Idera. Based in Texas, we also built a product called Zero SSL, we’re still running that on the side. It’s actually one of the biggest competitors to Let’s Encrypt. So, selling SSL certificates, making it really easy for people to secure their websites. So, lots of stuff we’ve done in the b2b space. But we’ve always wanted to do something actually in crypto, NFTS, and especially, especially music as well. So obviously, having had the opportunity to acquire the LimeWire brand assets, and now relaunching the product. We’re completely excited about it obviously announced, did the first announcement two weeks ago, and we’re now working full steam ahead to obviously, launch a product.
So, I’d say you shocked the world when, when LimeWire came back, the iconic brand, which a lot of us used kind of in the early 2000s, for pirating movies, pirating music, that was essentially the first peer to peer, digital network of its kind, right?
Paul Zehetmayr: For sure.
Step Aside RIAA, LimeWire is Back
And I guess is very reminiscent of a lot of the ethos that’s happening in crypto in web three right now. But why bring back LimeWire? Like, what was the motivation behind doing that? Show me the story behind the up worth of it.
Paul Zehetmayr: You mentioned it, I mean, obviously LimeWire was kind of the was laying the foundation as for blockchain, right, that means it’s peer to peer to thoughts. And that vision, obviously, is really a fundamental thing to where blockchain technology is right now. So that’s really interesting. Uh, why the brand, so we think it’s a, it’s a huge opportunity to revive it, because we’ve just done our research last year, right, and just have the following. And then nostalgia around the brand that’s visible all across social media, all across the media, really, even 12 years after the shutdown. This is a lot of energy to that. And we thought it would be great to take this amazing mainstream brands. to take a concept that is really abstract and not mainstream at all yet, like the NFT space, and try to bring it to a wider audience. Right. Everybody knows the brand’s so we kind of call smiles with everybody. It was what we were talking to. And everybody kind of says they’ve used it in the past, just like myself. So, it’s a real, it’s a real, it’s a real thing back in from the 2000s. Right. So, we thought, let’s take the brand. I mean, obviously, we ended up acquiring all the assets, and then started thinking about what’s really the thing that LimeWire was most associated with, and that’s music, right? And NFT’s is something extremely interesting, something that could be really revolutionizing the music, that the music industry, once again, like LimeWire was 20 years ago with Napster and all those peer-to-peer platforms. It kind of brought about a completely new thinking of how we consume media, and how we also think about like, on demand. And we can do that, again, with LimeWire. So, it’s an amazing opportunity to take that brands kind of use all of that nostalgia and that really positive emotion, and bring something that’s so abstract, like the NFT space to people that are currently outside the space, make it a lot easier to get in. And also, especially also support artists doing so. Right.
Yeah, makes a lot of sense. I want to ask you is Mark Gordon still involved in the new takeover?
Paul Zehetmayr: He’s not no. We’re intentionally, obviously communicated through throughout that we’re a completely new team, we’re completely fresh working, as we’ve mentioned, out of Vienna, Berlin and London, opening up in New York pretty soon. But our intention was also to kind of position the brand and our team completely as a completely new company, right? Especially with the music industry. LimeWire had a controversial past. We want to make sure we turn around that image. We use the brand in a way that supports artist as a company that actually launches for the music industry, not against it. And obviously that also entails making sure we’re a completely fresh team without any ties to the old company.
So, you guys posted a Twitter thread? I think it was on the 22nd, kind of explaining why you’re back why you’re doing this division? And can you share with me a little bit about that? For those who didn’t catch the Twitter thread? Can you kind of like, really quick regurgitate that, for example, why is LimeWire back? What do you guys after I know, we talked, you brought it up a little bit, but I want you to go a little bit more in depth.
Paul Zehetmayr: Of course, so, the reason why we’re bringing it back is obviously we’re excited about the brand, we were big fans of LimeWire back in the day, we kind of see the energy around the brand. So, we think it’s just a great opportunity to take, take that concept and make it mainstream. And why we’re going into music in general is because LimeWire was mostly sales associated with music. And we see a huge opportunity for the music industry and artists as a whole, to uniquely use content that is not monetized at the moment. So, if you think about, like an average band producing an album, pretty much, if it takes six months, for example, they produce so much content along the way. And if they have a really good following, and if they have, let’s say loyal fans, they’re extremely excited about the content that gets produced along the way. And that never gets published, right. So, we think NFT’s as a whole are a huge opportunity for artists in the music industry and in other categories, by the way, to use that content, and to start offering it to those people, right, you could think of like an unreleased demo of a song, for example, that might not be perfect. But that might even make it a little more special for fans that are really interested and that are willing to kind of spend money for that right. Spending money for music is something we that’s not really a given anymore. At the moment, 20 years ago, people would go to, to the record stores and buy a limited LP, we kind of want to take that concept and take digital rights and take that into the NFT space. There are some companies doing that already. We just think that, that web three, and especially the NF T space is just too complicated at the moment for the average consumer. And just from our conversations we’ve had with artists in the music space, we want them to be able to offer their special condyles call it like special exclusive content to 100% of their fans, and not only to a subset of like 55%, potentially, that that might have a wallet already. So, most of the people that are actually fans of music, just like the average consumer out there just doesn’t have a crypto wallet yet. They just don’t own cryptocurrencies yet. And they don’t really know the mechanics behind entities. So yeah, so our ideas, really simplify things, kind of take a web 2.5 approach, just, I mean, we’re coming from web 2, right, we’re coming from web two, we’ve built UX, and user experiences and b2b platforms for the last 10 years, you kind of want to combine the best of two worlds make it really easy for people to get in. And then gradually, also bring them towards decentralization and make them understand the concepts of NF T’s and really use the energy behind owning a digital item. Right, which is an amazing thought.
Yeah, makes sense. So, is this gonna be built on Ethereum? No, he said, I think I read somewhere says Alogrand.
Paul Zehetmayr: Yes. For Sure, yeah.
Why Algorand?
Paul Zehetmayr: Alogrand is actually a really cool blockchain. So, I’m not sure how much you know about the blockchain. But in general, I mean, there’s a few things that really speak to it, for example, their carbon negative, right. So that’s, that’s one thing. That’s, that’s usually important for us, but especially also for the artists that we’re working with. So, they’re looking a lot at the environment and kind of the impact they have on the environment. So that’s a huge thing for us. And for the music industry as a whole. They’re extremely easy and fast and safe and secure. So that’s also the technology will obviously was incredibly important. We want fast minting, we want minting to be really cheap, because we want to take the minting cost over for our customers, we don’t want our customers to deal with, with gas fees, right? I mean, on other platforms, you just have to calculate if it makes sense to buy a specific item, keeping in mind the current level of gas fees, we want to strip all of that away, let people use their credit card. And Algorand allows us to obviously keep the keep the gas fees so low that we can actually cover them. And they’re just really supportive, right? They’re doubling down on the music space. We’re not the only company they’re working within the music space. There’s really an ecosystem that’s building in Algorand at the moment, and where we can have a lot of synergy effects. And they’re trying to kind of be the big player, the big blockchain player in the music space, we’re happy to obviously launch on them. There’s lots of like joint marketing. We do lots of like internal communications and partnerships we do. And we’re extremely excited about that. Just one more thought because you mentioned the Ethereum. Obviously, maximizing compatibility is extremely important for us as well. So not only will people be able to export their NF t’s on the Algorand blockchain, but they’re also going to be able to do it to cross Chain Bridge, the right to polygon and Ethereum so that’s all.
Do you collect NFT’s yourself personally, like music NFT’s?
Paul Zehetmayr: I do, I have not too many music NFTs, but music NFT’s as a whole for sure. Have been interested in the space for long. And it’s a completely crazy space. Right? Yeah, really early and new space. I think there’s lots of questionable stuff happening in this space as well. Lots of really interesting concepts, lots of lots of content where we think that, that they might probably not kind of make the test of time. But we kind of want to focus on quality, right? Yeah, for sure.
Who are like some of your favorite artists in web three, right now, music artists that come to mind.
Paul Zehetmayr: I mean, there’s lots of them. I mean, what I really like, is not specifically music. But what I really found really interesting is how crypto punks made it. Right. The funny thing is, back in 2017, we actually had contact with contact with the company from crypto punks about another thing that we were doing back in the b2b space. And that’s where we first learned about the product, and about the project and really didn’t, didn’t kind of get the concept at first, because that back in 2017, I mean, NFTs were completely new. Right? They were one of the biggest first collections to come out there. So that’s, that was really exciting. And, and obviously, I mean, we’ve also been looking at Royal and opulence and all those companies. I think the royalty, like the royalty sharing scheme is also really interesting. I think it’s tricky, but But it’s certainly an interesting concept to follow. So, I’ve been looking at that a lot. But in general, really excited about this space.
What Traits Go into Valuing Music NFT’s?
Yeah. Can you talk more about what traits go into valuing music NFT’s like what do you look for? What should collectors look for?
Paul Zehetmayr: For sure, I think what’s really important, I mean, obviously, there’s the, like the typical, let’s say, let’s put it like this, the typical jpg NFT, that doesn’t have anything built around it, that doesn’t come with any access or community or utility, we don’t necessarily see the value in those, right. So that’s one thing where we see a lot of value in the space is if an NFT. And that could be like an audio NFT, it could be an image NFT or whatever, if that NFT actually provides some type of utility. It could be access or it could be membership. For example, at LimeWire we’re doing a lot of like physical events, we were hosting events with the artists that we that we sign for them to play at our events. And we want to kind of open up our physical events that we do probably in a monthly or bimonthly fashion. After the launch, we want to open it up first of all to like traders on the platform that are really active and engaged to owners of specific NF T’s, but also to token holders, right. And that’s where we kind of create an ecosystem around maybe even collections that we build ourselves as LimeWire. And we drop with LimeWire as an artist, so to speak. So, we want to make sure that the NFT’s are live on LimeWire, where we’re also pushing our artists for that because it’s really in their interest as well, to create some type of membership, some type of access that comes with their NFT’s. Because then the secondary market gets really interesting as well. One thing we’re doing, for example, is we’re allowing our artists to open up communities inside LimeWire. Obviously, I mean, some NFT artists have been building their communities on Discord. And that might be really fragmented and sometimes tricky. So, we’re trying to allow artists that would, for example, to a one of one of 10,000 collection, to open up a community that’s actually exclusive to those 10,000 owners. And if that community is really interesting that if there’s content, like announcements that get posted ahead of time, if there’s maybe access to a specific drop, that’s only that may be limited to that group of people, if there’s in general like a vibrant community behind that, that scheme, then then that NFT is actually representing a membership to that community. And if you sell that, if you’re an owner, you have access, but if you sell it, you lose access to that membership and access to that community. And if that’s really interesting that people might want to buy them off of you, right. So that also kind of makes for a lot of secondary market energy and can be really interesting long term. So that’s why what we encourage our artists a lot to do is actually to provide something around the NFT is not just only the content.
Got it, I want to talk more about how you think about like price psychology of a music NFT okay, because there is no yet defined way to kind of structure the right price around a song around a beat, around a loop, around any form of element that kind of gets comprised into a song down the line. How do you think about price psychology from music enough to like do artists risk devaluing their collectibles or excuse me, their on chain collectibles by let’s say, like releasing more songs, not releasing enough songs, because I remember back in the era of like the march 2020 era of the NFT gateway area of the digital art era, a lot of, there was a lot of commentary around artists risking devaluing their collections and themselves, the more kind of drops they did, right, is the same like mentality apply to music artists where a lot of the value behind an artist is producing music, it’s releasing music, right? How do you figure out that?
Paul Zehetmayr: I mean, maybe just to put that first in terms of content. We don’t try to be an alternative to streaming right. We don’t want our eyes to kind of just re mint, all of their content that they have living on, on the streaming platforms anyway, on LimeWire, that really doesn’t make sense. So that’s just to put that first. In terms of pricing, it’s really difficult, right? That means it’s really up to the artist, we kind of see that as a, as a very individual thing. When it comes to the artists, for example, we don’t dictate prices, we’ve seen a lot of artists that are, that mentioned that they did drops on other platforms in the past, and they pretty much provided their content and the NFT platform did the rest, right? We think it’s much more important and much more beneficial for all sides to work with them, to let them actually decide how exclusive is this content really right? Is it unpublished? Is it potentially a bonus track or like a completely new song that might only live on LimeWire? And that might not only get pre released, then it could be more expensive, right? If it’s really limited to 1000 people, for example, or even 100 or 10 people? I mean, you could think of like the Wu Tang album that was sold just one time right before that, right? There was a few million, right. So, if it’s really popular artists, and there’s obviously confidence that a person is actually willing to spend that kind of money for on, then there’s a way of making it really high price. But it really depends on a case by case. So, we’ve been talking to our artists, for example, about creating two types of different collections. Because our, one of our goals at LimeWire is not only to be really accessible when it comes to how the platform is used, and how to kind of get on boarded. But also from a price perspective, right. So, from the last few years, many of the NF T’s like on the biggest platforms that they were going like the average price was somewhere, something between 1k and 10k. Right? We think it’s just really hard to, it’s not attainable for most of the people. So, what we’re pushing our artists for is to create, obviously, one of gold collection that might be really expensive, might be an option. And like a really exclusive piece of a music or graphical artwork. But also, like one of ten thousand that’s priced, maybe below $50, maybe even below, maybe below, maybe even lower than that, or maybe at 100 bucks, so much more accessible to many more people. And make that obviously and open that as well, right? Because we want to kind of have both ends of the line. Yeah, but pricing is difficult. It’s really something that that we need to kind of explore over time.
You know, one of my favorites takes on pricing is from Verta, I talked about this on the episode, I think with Cooper Turley and with Verta herself, who was also part of season four. And she came out with this like end of your blog post on her thoughts around the entire space on her experience, kind of selling out her collection and achieving high valuations and deep pocketed collectors around her art. And she basically came to the conclusion that she’s in favor of letting the market decide what her art is worth if she’s unsure. And by doing that, you kind of place like an open bid mechanic on it letting collectors you know, let them fight for it. Right. I think she just did this with her recent piece on on catalogue if I’m not mistaken. And, and I really like that approach. I really like the approach of kind of keeping a free market point of view, and allowing your audience and your collectors to decide what they think is valuable, which from what I understand, she can ultimately decide what she wants to accept and what she doesn’t want to accept. But like, what are your thoughts around like a bid placement, for example, versus setting a fixed price of whether it be $50 or $1,000 $10,000? Etc.
Paul Zehetmayr: For sure. I mean, I think it’s a really interesting concept in general. I mean, we’re also offering auctions, but as I just mentioned that one of one might be an auction, for example, where you have a specific like base price, like a bottom price that you would expect. And then you can also decide if you want to be able to kind of cancel the auction at the end and say, hey, this is this is not real or not reaching a specific threshold that you might set before. But also, I mean, so auctions are incredibly, incredibly cool. And they’re really, they’re really a way of kind of letting the market decide, as you mentioned. So, I think that’s a that’s an integral part of the whole concept. But also, like fixed prices, it really has to go both ways, in my view, just letting the market decide 100% might be not the biggest, not the best strategy. Also, in the long run. I mean, as an artist, you kind of have a specific grasp of how much your, how much your ad might be worth on a monetary basis as well. And you might want to kind of just dictate that on specific items. If it’s really if it’s an item where you as an artist feel just based on your experience of launching art in general in the last few years. You think that’s a fair price. And obviously, if you set the price and it doesn’t get sold, you kind of known for the next time that you might have to go lower, I think combined with an auction and doing specific drops, I think it’s always about the content if it’s really explosive. If it’s really completely original and in the artists view really go through the roof and do an auction, might as well be an auction. But also, there are other items that you can just price logically and I think mistakes will happen for sure in terms of pricing. Again, it’s probably trial and error thing?
What Makes a Music Artists Valuable in Web3 From a Collector’s Point of View
Yeah. You know, I’m a big believer that with the rise of TikTok came a lot of TikTok artists. With the rise of Spotify came a lot of like Spotify artists. And I think with the rise of web three, there’s gonna be a lot of web three-native artists. My next question to you is what determines a valuable music artist in crypto? Like what makes one music artists more valuable than the other from a collector’s point of view? How do you think about that?
Paul Zehetmayr: So, we tried to generate a lot of value for the secondary market tools. And in doing so we have to focus a lot on long term value, right. So, we we’re not big fans of artists that just use their name that might be big, big to do like a short-term thing to grab a lot of cash, and then just take it and go away. We tried to work with our artists, and we have about 10 to 15 that we’re launching within May, we tried to work them and work with them and actually create, let’s say, a small ecosystem around their content, that we think it’s a good artist in the web three space, or probably a good artist as a whole has some type of like exclusivity around their content, right, it has to kind of have something around the NFT’s as it has to be some kind of access, some type of membership, some type of exclusivity in general, that that just also kind of passes the test of time, just beyond the primary sale as well. So obviously, you have the sale from artists to user, that’s most of all the sale that probably goes the best, unless you have a really, really good long-term concept. But if you keep working with the people that buy your NFT’s, and keep offering them value, then the NFT’s will keep their value or even increase, right. So, I think it’s the same with every other concept as well. Either the art is so limited, that is really just the notion of it changing hands, or consuming that specific content, or with the NFT space, which is completely new, obviously, you can build some type of community around it. And that’s I think that’s probably the where we’re good and bad artists will probably be segregated, because long term value isn’t easy to create, kind of need to have like a loyal group of people following you, or you need to build that. And you need to provide incentives and value and interesting content on an ongoing basis for sure. So, I think that’s probably the challenge. And we’re trying to support them as best as we can. Always looking at NFT projects that are that are interesting and popular, right? I mean, look at crypto punks, as I mentioned before, or bored apes, right, they have this really cult following already. And an incredibly vibrant community around them. I think if if artists are in the music space, are able to create even a portion of that excitement around their, their content in the long run that I think they’ve won, or we’re trying to make that happen for them.
I think one of the biggest challenges that artists face is when you try to become a web three native artist, you risk the pressures of trying to think creatively and be innovative in web three. And part of that is understanding token omics mechanism design down models, all these like foundations that are known to crypto, and really embracing that to be one with them. Right and creating experiences around your collectors that empower their pockets. Right? And that allow them to kind of engage with you on a on another level. The best example of this that I come to is with the artist Daniel Allen. Okay, he’s been on mint a couple times. And he’s been messing around on catalog. He’s been messing around with NFT’s. But he’s been very strategic with his drops on how he releases, he’s been very strategic with the overstep Dao that he set up, right. And the different assets that are correlated to the office team Dao and how the Dao accrues revenue and all these different things that end up empowering his asset holders, right, he’s collectors, right? So, I think like a lot of the premise behind web three, maybe not a lot, but a lot of it is kind of empowering the people who end up collecting your work, right? It’s one thing to empower on a community level for one to fall in love with your art, to fall in love with your music. But it’s another thing because a lot of the stigma around crypto is like how can I make 10x really fast? You know, that’s like what a lot of people have been, I guess accustomed to, for the most part. So, I think that’s one of the biggest challenges for artists like, how do I think creatively and innovatively in the context of web three, using primitives to build an audience, to monetize an audience, to own an audience, which sounds like a lot of what LimeWire is trying to empower?
Paul Zehetmayr: Absolutely. And it’s a completely new framework to work in, right? Yeah, we’ve been talking to our artists and just like the average consumer, the average artist isn’t in web three, either at this point, right. So, they have to learn, we have to educate them on that and kind of explore together with them where web three makes sense for them, where they kind of need to think of new strategies to be creative, or new types of assets that can create and also where they need to kind of stay true to their own music, right. So, we’ve also been telling artists a lot and just from our discussions we’ve had in the last months really, we also want our artists to kind of not kind of break their initial concept. But if they have, if there’s a reason for them to be popular or be really successful in the music space, they should try to not change that. Obviously, in web three, right, there’s just a different format for them to be present, a different format for them to distribute content. And maybe, maybe the content comes with specific perks, but in general, they need to stay true to kind of their own concept or vision. And try to fit that in a web three formats and framework. So, it’s a lot of work for people to get into this space. I think it’s really new. So, there’s going to be many, like case studies in the next few years. what works and what didn’t work, potentially. And many are also skeptical of the concept, right? I mean, there’s a lot.
Many, many are skeptical, many.
Paul Zehetmayr: Yeah, for sure. I mean, just from our discussions as well, many people, many people are open to kind of exploring, but many are also just shying away from the notion at the moment, because there’s just a lot of crap going on as well, right. And you don’t, like an artist that’s, that’s popular. And there’s a lot of like, that has built a brand for themselves, that doesn’t want to risk it by potentially making a mistake in web three. And that’s where we come in, right, that’s where we tried to kind of guide them, we’re doing a lot of hand holding and working with them, actually, to make them comfortable with the concept. And also, to do something that might not be that risky, right? That might be, for sure, a web three concept and a web three assets, but also really appealing to their web two fans. And since we’re opening the platform up to web two fans too and making it really easy for people outside the NFT space to get in. I think that’s probably a good first step for most of the artists.
So, what tends to be some of the biggest questions, concerns, misconceptions as you try to handhold a lot of these music artists,
Paul Zehetmayr: I think probably the biggest issue is, is content or how they how they need to think about packaging their content, right? There is a whole lot of content with each of those artists, right? They have huge gigabytes of audio and video and graphics. The question is, how do we package it that it works as an NFT? How do we price it? Which quantities we use, how we kind of market the drop as well? And how we attach value around the NFT? Because obviously, it’s amazing, if it’s an exclusive song that gets unlocked on the platform, if you own the NFT. That’s, that’s great in itself, right. But if you can create value around it, if that even after listening to it, it opens the door to a community itself some type of membership or members club even then that might be even more interesting. So, I think just packaging the content that they have already. And for most of the artists, actually we’re using content that they have, but that there was never published, some of them are creating like exclusive new music as well. Some of them are creating collaborations, but with graphical artists are creating their own illustrations, for example. But it’s really, it’s really content. So, they have content, but they need the package it. So that’s kind of the biggest, biggest challenge. And they’re also obviously always a little concerned about how crypto is going to see it right. If web three natives that might also be their fans, but a subset of their fans for sure. How they take that and kind of how they get excited about it.
Why Experimentation is Key: Understanding the Collector’s Mindset
Yeah, I think that’s one thing that I advise artists as well, like there’s no need to reinvent the wheel. And just you have a catalogue of existing content that you can upload on chain and try to kind of experiment, throw shit at the fan and see what sticks. And from there, you can learn, you can understand the entire process, you can educate yourself along the way. And there is no, like people won’t remember you for your failures, right? They’ll really remember you for when you really struck, and when you really won. And I think part of like entering web three is experimenting and being comfortable with the uncertain and the unknown, and kind of like taking it upon yourself to innovate within the trenches of what’s possible, right, and trying to find new trends, trying to unlock new experiences, things that maybe haven’t otherwise been explored. And it goes back to like thinking innovatively, thinking creatively in the space. You know, one thing I want to talk about with you and really get your point of view on is like why do you think consumers care about collecting your own music? Like what makes you so convinced that this entire media NFT era isn’t just like a fad, or a wave?
Paul Zehetmayr: Well, think it’s, for one, I think collecting items and collecting exclusive formats or assets has always been around, right? It’s not really that that the NFT space has invented collecting, right collecting has been around in the physical space. It’s been around the digital space to some extent. People used to go, are still going obviously to buy limited LPs and limited art and exclusive stuff in general. So, I think the NFT space in the web three space just has kind of brought a different format to it right. So, so the fundamental notion of collecting special items, showing them to your friends, consuming them, maybe trading them and selling them later on, that’s been around forever. And that’s not going to go away. That’s kind of the fundament idea behind the whole space, I think. And web three kind of provides a new way to do it. And, and just the notion of owning something in the digital world. With all, with ownership having become less possible, really due to streaming. And obviously, the Netflix and Spotify of the world. There’s still a huge market for exclusive content. And I think the NFT space has shown that, and it’s just providing unique and progressive ways from a technology perspective. And we need to pursue that. And also try to find out what makes sense, right? I mean, there’s specific areas also in the music NFT space, probably that just will fall away over time, just because it’s such a new space. So, there’s a lot of exploring and trying it out, as you mentioned earlier, but we think like the fundamental notion of collecting music and art that is not accessible to everybody, and not even to people that might be paying like a streaming subscription. That is probably the essence of the idea. And we were completely confident that that’s going to prevail, and kind of be one of those use cases for blockchain that will stand out and will just stand the test of time also.
Yeah. You know, another thing that comes to mind in this entire movement is there’s an argument around owning something for royalties and owning something for the sake of collecting. Right. And I’m curious to hear how you think about the difference between the two, and is one more superior than the other?
Paul Zehetmayr: I think they’re completely different, to be honest, so we intentionally didn’t go into royalties at the moment, obviously, there’s companies doing that. And I think that’s obviously an amazing thing to do. But we also think it’s a really difficult thing to do. Because it essentially, if you’re, if you want to revamp the royalty game, it’s for sure, something that we’re also exploring in the future. But essentially, you’re also competing with labels, right, you’re trying to kind of take over the whole mechanism of royalties. Obviously, making that more transparent is an amazing thing. Taking that on chain is an amazing idea. We think, so for LimeWire, we want it to go into collecting first and really to provide artists with a new and an extra channel of distributing. And in doing so we need to partner with those labels. But we need to partner with the music, music industry in general, with all the stakeholders, because obviously, the music business is a rights business, right? There are so many people that hold some of the rights to a specific piece of music, as we need to get all of them on board, get all of them comfortable with the concept. And then and then offer assets to fans and buyers that are interesting for collecting. So, I think that’s kind of the idea, it’s not about fighting the labels, is not about fighting the streaming services at the moment. For us, it’s about creating a way for artists to be able to use and to use content that is just not published yet. And that might be excusive, and that might be unreleased, and to give them a way to monetize that, really. So that’s the collecting aspect. royalties, I think will be interesting. We’ll keep looking into that. But we just think that it’s a lot more heavy lifting than the collecting part for now. And for us, it’s just a lot easier and better mission as a whole to kind of work with everybody that’s there already not trying to replace any labels at the moment. And create value for artists and for fans. But yeah, it’s two completely different concepts to be sure.
Do Music NFTs Work in Favor of Record Labels?
You know, speaking of record labels, okay. Do music NFT’s work in favor of the RIAA, the record labels that ultimately fought to shut down LimeWire? Or do they work against them? Because now I see in like, record deals, for example, or I’m hearing at least that now they’re putting clauses to claim a percentage of NFT sales, for example, right? Like, how do you how do you think about that?
Paul Zehetmayr: I mean, obviously, that’s the big thing is always right. I mean, for our artists, for example, we’re working with 10 to 15 for our launch, and for the weeks after that, we’re seeing about half of our artists be independent and own all the rights to their music and obviously be completely free in what they do. So, they could do audio NFT’s you could do music, NFT’s and they completely are flexible when it comes to that. The other half is signed to a major label, is signed to some other labor contract that doesn’t allow them per se, to create NFT’s with their music, because anything that touches their music is actually bound with a, bound by that. I think it doesn’t hurt or it doesn’t fight against the labels or also the labels will not fight the notion of NF T’s because first of all, there’s a lot of money in it for them as well, right? And second of all, it’s just another format, right? It’s just music, again, that is distributed in a unique way. And they’re going to want their cut, right? I mean, if there’s a, there’s a level contract that involves music that will involve NF T’s if they contain music. And that’s also the reason why many, many of the artists are actually doing the graphical original illustration works, right, that might not necessarily be music based. But I think they can benefit from it. And I think the artists can benefit from it as well. It’s always about the inner workings and about how they hold their partnership looks like in the back end, but we say as LimeWire we’re giving 90% of the revenue to the artist. Obviously, if the artist has an agreement with the label to give 50% of the label, then we cannot change that right. We can just work with them. Try to obviously, try to give them the best deal possible. But still, they have to obviously figure it out in the backend.
Yeah, yeah. It’s interesting to see how it’s gonna play out, I have a bet that more and more record labels are going to end up launching their own marketplaces to empower their catalog of artists that they signed. And this is just going to be a fight for curation. At the end of the day. The platforms who can curate the best artists, the most amazing experiences will end up winning, in my opinion, because marketplaces already becoming, in my opinion, like somewhat saturated, and the ones that are winning and providing unique experiences for the people that they bring on into the marketplace, both from a collector point of view and from an artist point of view. And, you know, I’m seeing an era of like, music, kind of being reimagined on chain, and you’re seeing people revalue music for what some argue is what it’s really worth, right? Never have we really been able to collect their own something digitally, other than the last few years, right, where this entire thing kind of kicked in. And I’m curious from like, lime wires point of view, like, how do you see this kind of, I guess, evolving in the next few years? Like, what does the music industry look like, from your point of view, assuming NF T’s end up taking their toll? And this new collection format is the new way to one own music and listen to music? How do you think about that?
Paul Zehetmayr: I mean, there’s, there’s obviously different aspects to it. Right? I think I think NF T’s will not completely take over the music space, I think there will be streaming and I think there will be obviously records and everything that is in place right now. I think the NFT format is just going to be one of the essential ways of releasing stuff, right? If I mean, there’s obviously streaming rights, I mean, if you as an artist, decide to release a label, release an album, sorry. And you do that on a streaming platform like Spotify, you might just do that with the finalized and finish tracks, right. But you might use your other demos that might create, maybe trade along the way. And it might be completely clear that you launched those as NF T’s or you use your album that will be released on a streaming platform, maybe six months, in six months, you might do a prerelease as an NFT. Because you could have done that, obviously. Or you could do that in the physical space. And you might do that as well. But in the digital world, doing a prerelease for NFT’s is also really interesting, right? If there’s a really big album many fans are waiting for. And that’s going to be released maybe even next year, you could go ahead and create 1000 copies for that, and actually offer that to your unique super fans that might be really loyal and really interested in that ahead of time. And I think just for like exclusive content and for unreleased content for demos, and really, and really content that is that is different to what’s on the mainstream. Streaming websites, streaming services. I think NFT’s will have a certainly a seat pretty much when it comes to how you release music in general. And I think it’s for art as well. And for streaming in general, that does, there’s companies that are trying to do streaming deals, right. I mean, streaming is people are trying to revolutionize free streaming as well, which is interesting, because if you look at the inner workings of a streaming company, nobody knows how its distributed, right? I mean, if there’s a way to kind of make that all transparent and on chain, that’s a huge thing.
Bringing Back the Golden Era of Internet Interconnectivity
Yeah. You know, in the golden era of LimeWire, the number of users was very concentrated and connected. I remember once everything kind of shut down, that interconnectivity was jaded into many tiny parts, it took a long time to really recreate that with new technology. How could the labels have leveraged that internet interconnectivity? I guess, rather than destroy it?
Paul Zehetmayr: That’s a good question. So back in the day, well, I mean, first of all, they were obviously under attack, right. They were under attack when it comes to licensing and right, so I completely understand that was an issue for them right? In general, what LimeWire did back in the day, opened up music to so many people, right. So, it’s a cool thing and 99% of everybody that’s coming touch with it loved it, right. It’s just the music industry, obviously. And people that hold that were holding the rights, obviously had an issue with it because there couldn’t be like a long-term solution? Well, I mean, it’s hard to say that they could have embraced the project. But I mean, they had to take it in some way to kind of bring an end to it. Obviously, it did kind of bring the foundation for streaming and on demand, right. I mean, that’s kind of the way I think the companies like Napster, LimeWire and bear share and all those peers to peer, they really paved the way for streaming and for on demand, and for how we think about content at the moment. I think they did some good, they did some bad. At the end of the day, it’s it was bound to happen in some way. Right. And we’re just excited to bring it back and kind of be again, at the forefront of a big change in the.
Yeah, I remember the RIAA, I was doing some research, they sought basically $150,000 for every song pirated, that was owned by their labels. And it came to a close of like $75 trillion. And just to give context, like the USA GDP in 2021, was $23 trillion. Right? So, like, the judge laughed that off, and I remember they settled for like 105 mil, or something like that, right? So, it makes me it makes me curious, like, what if crypto, what if web three blockchain technology was around during that time? Could it have looked differently? Right, in terms of what value was created, who was chasing what, and what kind of lawsuits came about because, you know, piracy really impacted the music industry, right. And you touched upon it a little bit more, and like you said, Napster, LimeWire, etc, they were a lot of the reason behind this consumer shift in terms of what they thought they wanted, versus what they were actually getting. And nobody really wanted to buy a $15 CD at Best Buy anymore, right? They just wanted access to an unlimited library of free content that was on demand. Hence, the transition into the streaming services, right? Where we pay like a Sas fee to Spotify, Netflix, and other services, just to kind of take advantage of this unlimited content, on Demand. I guess my question to you is like by collecting media related NF T’s okay, can this new technology play on that consumer mindset of getting access to an unlimited library of free content on demand? And if so, like, how would that work exactly?
Paul Zehetmayr: Well, I think NFT’s in somewhere, they’re about being limited, right? So, that’s, that’s pretty important. exclusive content, kind of, they need to be limited in some way. But they might open up the doors for something else that might be unlimited, right? It might be in unlimited way of, of getting in touch with or actually engaging with people that are kind of in the same mindset, and getting access to some type of community that is providing like value over time, right? And but the assets themselves, and NFTs are kind of based on being exclusive and unlimited, hence also a price per piece, right? Because if you had a subscription that allows you to, to download all the NFT’s itself, it wouldn’t really be anything different to where we have or what we had before web three. So, I think limitations probably important in terms of just the sheer quantity of items that is released. But just around that, and only in NFT can provide you with unlimited opportunity. I think that’s really the important thing and that’s probably going to define a successful drop and an unsuccessful drop. If you if you provide value around it, then it might be successful, if you only provide a JPEG, and that’s upload to the blockchain. And that’s public anyway. And anybody can download it. And you don’t provide anything around it. Anything that that that gives you access to anything else. That’s not going to not going to be interesting in the long run.
So, what are we going to get the whole music NFT to mp3 Download sites, where you can input the contract address and get a file as if you were on YouTube. Joking.
Paul Zehetmayr: But they might be popping up though.
Yeah, exactly. You know, my bet here, Paul, is that in the next five to 10 years, the music industry is going to see a complete shift. I think these collectibles are going to be the foundation for new licensing contracts. And while there’s going to be a limited amount to collect, there’s going to be an entire new consumption layer to enjoy music that’s going to be picked on chain and is going to is going to be leveraging the music collectors NFTS ended up collecting or owning or whatever you want to call it from a legal standpoint. And that value is going to be accrued much differently. The second you have all that stuff on chain, you can think about splits differently. You can think about payment automation differently. You can think about ownership and attribution differently, right? All these things that are otherwise very scattered and broken in the very like web two, I guess, outdated music industry. How do you think about the consumption layer around everybody collecting all these assets? Will we have some type of application that will allow people to connect their wallet, listen to their song’s kind of thing. But not just that but tap into the world of songs that other people have collected? Maybe there’s some way to pay through some governance token streaming royalty somehow behind that, you know, you know what I mean? Like where my head’s going?
Paul Zehetmayr: Sure. I mean, we’re pretty early, right? It’s just the very beginnings of how NF T’s can make sense in this space. I think there’s, there’s a whole different kind of world waiting for us in the music industry. But in the in the art space as a whole, right? I mean, that there’s so you could do with on chain assets. And we’re really just trying to get people in initially now. Right. So, I think there’s a, there’s a huge amount of opportunity. And if you look at, obviously what you mentioned before, it’s, it’s extremely important to just embrace it, right? Because people, when I look into the music industry, there’s like maybe five years ahead, artists are going to consider NFT’s in the format of NFT’s when they first create their content, right, right. Now, obviously, most of them, at least most of the music artists that we’ve been talking to, they have a host of content that they might need to repackage, or maybe they create something new, but in the future, I see, obviously, there will be streaming platforms that will be considered, that will be physical records, potentially. So that will be considered. And obviously, there’s always going to be a niche market for that. And there’s going to be the NFT format that will be considered right and, and people and artists need to be open and progressive about that. And in the whole supply chain, in the whole process where they actually create content, they will have to have and will want to have kind of a big focus on where they and how they can publish content in the NFT space. So, I think we’re pretty early, as I mentioned, and there’s going to be so many things to explore for sure.
How LimeWire Will Tackle IP On-Chain
Yeah. I want to talk to you about copyright. Okay. And more specifically, how do you guys at LimeWire think about copyright on chain because remember, at some point back in the day and LimeWire produced like this content ID that tried to identify songs that breached copyright laws, but all users really had to do was just like adjust the pitch. And they kind of like bypass those walls, right? Well, the same actions occur on chain, of course, it’s human nature to find tricks and ways to kind of go around the system. So that probably won’t change. But how do you think NF T’s might solve that, if they may?
Paul Zehetmayr: Well, I think what’s really important to notice is that so just to fight the whole thing, and just because of the history of LimeWire. We’re replacing and especially strong focus on curation and on content, moderation and on copyrights. Right? So, we want to be able to obviously,
Which prevents, by the way a lot of the issues that LimeWire had when you can kind of gate access.
Paul Zehetmatyr: Absolutely.
Who determines gets to upload who gets to sell, but really who gets to buy?
Paul Zehetmayr: Absolutely. But then again, you cannot, you cannot 100% make sure that that buyer that actually buys an NFT doesn’t reproduce, doesn’t obviously, publish it somewhere else. So, you need to have like takedown policies, you need to make use of a lot of the framework that is in place still right now kind of to be able to take content down, right? So, it’s, it’s nearly impossible to have a completely bulletproof solution there. But we’re just trying to make it as bulletproof as possible, right. So, if you, if you, for example, launched as an artist on LimeWire, we’re actually manually betting all of them right. So, a new artist with a new collection is always manually improved by LimeWire, approved by LimeWire, but I’m where we’re trying to do it really quick. So, we have a whole team of curators actually and moderators, that will be just reviewing content 24/7 to make to also make it really easy for artists to actually get stuff out. Right. But say we want to make sure not no copyright is actually infringed on. Right. So right, that’s usually important, I think it’s going to be an ongoing challenge to do that. And it’s going to be one for pretty much all of the NFT platforms out there. And so, for anybody that publishes content on a platform basis, so as soon as you have people uploading, you need to moderate really closely. But then again, you cannot wait, you cannot let customers wait through artists wait, a week to have their content. So, you kind of have to go both ends, be really quick about it, but still be really, really peculiar and try to obviously hold the rights kind of, to the highest extent and be really careful about it. So, we’re doubling down on that for sure. Yeah, sure.
You know, one thing I think a lot a lot about, especially during this season is like how can web three music platforms address copyright infringement while staying decentralized? Right, is there a happy medium between curating in a very centralized point of view, or even handing down curation to the community, and like a governance format, right. But also making sure that the ethos and principles of what web threes so far built upon the decentralization layer, right, stays intact and remains as a core component of that foundation. I think about that a lot. You know, I don’t know, I don’t know if we can come to some type of way forward where copyright infringement I guess, no longer is a problem. While platforms stay decentralized, if that makes sense, right? I’m not sure we haven’t seen that kind of play out just right, because copyright kind of bleeds into many, many other different in industries beyond music, right, yeah, music is just a small component of it. So, if anybody can solve that problem appropriately. So hit me up. I want to have you on the podcast.
Paul Zehetmayr: Same here.
And number two, I’m curious to learn more.
Paul Zehetmayr: Yeah, for sure. No, it’s an extremely difficult challenge for sure. I’d also like to see obviously a way of consuming content that’s on chain gated through NFT’s right. It’s not too easy to, if you look at a JPEG that lives on the blockchain, everybody can access it. And it’s completely transparent. That’s an amazing thing. But how also, that’s why we also work with unlockable content on the platform, right. But things like IPFS, and those like decentralized file storage solutions are really interesting tool. So, I think there’s going to be so many technologies that will be built in the future, many of them will, will probably not work, but to be honest, it’s an ongoing challenge. And we need to just keep a close eye on what happens in this space. And if there’s a viable concept that just comes out at some point. We’re absolutely embracing it. So, solving the copyrights issue is probably one thing that we’ve been trying, as a whole world for decades, pretty much. So, but I think in general with decentralization, we’re moving into the right way for sure.
What Would Cause the Downfall of Music NFTs?
For sure. I have a couple more questions for you before we kind of wrap off, okay. What do you think would cause the downfall of music NFTs? Like, what is the Achilles heel? I know we talked about we talked about infrastructure, we talked about copyright. But is there something that maybe the majority aren’t thinking about yet, that could be the ultimate Achilles heel of music, NFT’s, of collecting music on chain, and what that’s worth, and that could actually end up being the Achilles heel of the entire industry for the most part, but let’s take it one step at a time?
Paul Zehetmayr: Well, it’s hard to say I don’t see one, to be honest, I think it’s going to depend on interest, and what content is created, right, as long as artists that have a following in the world, and there are fans out there. And as long as quality content is actually produced and offered, I think that will be completely fine. And that will be successful, for sure. consumer interest is obviously key, right? If people don’t care about NFT’s. And if they don’t see the value in them, then that might be a huge issue for the market. We’ve seen otherwise, obviously, in the last couple of years. So, I don’t see, like a complete black swan scenario there. I just see a lot of benefits to where it’s the space could be taken through web three. But you know, we all don’t know. I mean, obviously, there’s regulation happening. So that’s sometimes making it easier, sometimes making it harder. And we also obviously need to adjust all of us. I’m also in the crypto space as a whole, right? I mean, there’s, there’s people claiming that crypto in general will go away at some point, because regulation will be too hard. I think actually, regulation helps a lot in the NFT space, but in the crypto space as a whole. So, I don’t see an Achilles heel to be honest, yeah, I see a lot of opportunity. We need to use it in the right way. And I think the right way will still need to be determined also in the music space. But if we, do it right, then it’s certainly here to say.
Yeah, so final question for you. Okay, and we’ll wrap up after this. So, what do you hope NFT’s web three, Crypto, kind of unlocks for the next generation of music artists and overall creators?
Paul Zehetmayr: I think that, I hope it’s going to provide a lot more flexibility and ownership for them, right. Because just talking to the music industry, in general, we want them to be able to have their own content, to own their content and to be completely flexible about their what they do with it, right. We don’t want our artists to give us like a completely like a like a license to do everything with our content that we want. But we want to be a platform for them to get on boarded, to create amazing content and to dictate themselves how they sell it and how they offer it to their fans. Right. So that’s one big goal is actually giving flexibility and giving control to the artists and they have lost a little bit of their control in the last few years really with streaming and everything and just with the contracts are in. So, we hope, we just hope that the NFT space in general gives flexibility back to the artists, allows them to monetize their content better. Maybe there’s new solution solutions that allow them to kind of to market their content better as well, that uses web three in some way. So, I think probably the big headline is probably giving control and giving ownership also back to the artists.
Outro
Paul, amazing. Thank you for being on, it was really fun capturing the story. For sure. I hope to have you on again soon as LimeWire kind of progresses launches. And you guys go through your first few drops. So best of luck to you before I let you go. Where can we find LimeWire? Where can we find you? Give us the spill.
Paul Zehetmayr: limewire.com, pretty much, that’s pretty easy. Just Google LimeWire and you find you find the way it is for now. We’re actually launching at the end of May. So that time we’ll get the marketplace live. We all will obviously have marketing campaigns around. The artists that will be joining they will be announced in May, mid-May end of May. Cool. So limewire.com for sure.
Amazing, Paul, thank you very much.
Paul Zehetmayr: All right. Thanks a lot, of talk soon. Bye, bye.
