Intro
Michel Traore - is the co-founder and CEO of anotherblock, a Web3 platform democratising music ownership through NFTs.
Anotherblock connects music rights to NFTs, and creates a smooth and easy way to both buy and sell music rights. Together with his cofounders, Michel plans to introduce music to a free and open market, increasing its value and solving the imbalance of power within the industry.
Prior to Anotherblock he spent several years at Schibsted, and in the European startup scene, building fintech products from scratch. Growing up between the pop-wonder of Sweden and Burkina Faso where his father created its first modern label - Music has been a big part of his life. In 2021, Michel combined his fintech expertise and love of music to found Anotherblock.
During this episode we discuss about web3, NTFs, how they are fractionalizing music and how the holders will earn royalties. Also we discuss about their latest drop coming October 20 for the song - Alone part II by Alan Walker and Eva Max - a song that has 400m streams only on Spotify today.
Spotify: https://open.spotify.com/episode/2f50sPCO40U98MMKtdZ7I8?si=e6bdf8a01698433e
Apple: https://podcasts.apple.com/nl/podcast/venture-europe/id1572789098?l=en&i=1000582516587
Transcript - Not edited
SUMMARY KEYWORDS
song, nf, music, rights, people, web, bit, spotify, part, artists, create, community, michelle, stockholm, world, block, projects, buy, streams, problem
SPEAKERS
Michel Traore, Calin Fabri
Calin Fabri 00:08
Thank you very much for taking the time Michel. Where are you based?
Michel Traore 02:17
So based in Stockholm, more specifically, right now we're in southern one, I would call it like a little bit like the more creative part of the inner city a little bit more, you know, culture here. We had a lot of like, internal battles of where to have an office in the end by one. And I think that right now we recruited people who agree, so I'm really satisfied. Yeah, it's a nice place. And it's almost like an apartment, this office. It's really cosy. And yeah, it's like,
Calin Fabri 02:46
love it. Actually. I also moved to Stockholm last October. And I asked some friends around here like, which which neighbourhood? Should I move in? And they're like, well, like it depends, you know? What's your style? Like? What's your personality? Like? Do you want to go too? Fast is down a lot of restaurants? Maybe a little bit? I'm not like chic, or how would you call it and then you have ostermalm? Maybe a bit fancy? And if you have family and then solder mom, definitely more hip. Exactly. What did you go with? I went for vasa. Stan. To be honest. I have mixed feelings. But in the like they have. They have good restaurant around here. But quite often I go out actually in Sedona.
Michel Traore 03:25
Yeah. Now it's nice. It's nice. I live around here as well. So for me, it wasn't you know, it's a simple choice. But I've been moving around a lot in Stockholm. So yeah, there's good things about all the different parts, I'd say.
Calin Fabri 03:36
So did you also live in Boston? And also us from and how come you decided?
Michel Traore 03:41
I didn't live in Boston. I lived outside of the city as well. Yeah, a bunch of places.
Calin Fabri 03:49
Because if I remember correctly, like from your intro, you you kind of grew up between two countries as well now.
Michel Traore 03:54
Exactly. So I didn't go. I'm not from Stockholm. Originally. I come from the south of Sweden, Ireland. And I moved essentially back and forth between Ireland and Burkina Faso in West Africa, where my dad comes from originally. So yeah, we spent two years here two years there a lot of the time. So I didn't end up in Stockholm until I was 19. And since then, I've had it as a base. So when I've lived abroad, I've always come back to Stockholm afterwards.
Calin Fabri 04:20
Awesome. I'm always fascinated. Maybe I have a bias because also I kind of grew up in kind of multiple places. But I'm fascinated by the point of view that people that grew up in multiple places have, right because you would always have two or three perspectives. And also, like, one thing that I've noticed is that people that grew up in multiple places, one, they're more tolerant, but second, they're also maybe a little bit more of a like hustlers, would you would you agree with that observation? How did how did that affect you? Personally,
Michel Traore 04:53
I think that like it forces you to do certain things like it forces you to because what happens When you grow up and you move back and forth, and you constantly need to build new friendship groups, I guess, yeah, you need to find your place. Like if you're in one place all the time, once you have your friend group, you can be quite comfy all the time. So I would say that it kind of forces you to perhaps it's a hard school for, you know, to be socially skilled, and to make sure that you will get friends in the new place you end up in. So yeah, I would say maybe that's a part of hustling, you know, to be able to read social cues and to try to fit in as good as possible in different places, perhaps. Yeah.
Calin Fabri 05:33
Interesting. And let's talk about web three, right? You have a company that is kind of operating in web three. So what is web three? And how did we get here?
Michel Traore 05:41
Like, to be honest, I don't even know what web three is, like if you Google it, or if you talk to people, some people think more of web three, as you know, AI and you know, serendipity and the next level of brainy computers, the definition and the world I'm in, I would say that it is, you know, it's more about decentralisation and transparency. So I think one definition that I often use that I think is maybe not fully correct, but I think it's a you know, good guideline for like the development if you want to use more of my definition, then I would go with you know, web one was read, read only, you know, you can spread information really widely. Web two, you know, was read and write, meaning that you could contribute, you can interact, YouTube, social media, and all of that. And web three is, you know, read, write and own. So that means that, you know, you have all these interactive things, but in this case, you know, the servers aren't one by one company, they're decentralised you own your information, transactions can be done trust lessly. You don't need middlemen. That's a little bit more of the web three, I'm coming from all over think about,
Calin Fabri 06:50
right. So like read write, and also now you can own and where do the NFT is fit into this picture you hear about? And if these everywhere nowadays?
Michel Traore 07:01
Yeah. So I would say it was probably last year that NFT is really blew up. But yeah, and if this is just so you have this, you know, the first thing that came out of blockchain was, was Bitcoin and that's just a it's a fungible token, something that can be traded, one bitcoin is worth exactly as much as another Bitcoin. And NF t is just to token that lives on the blockchain, but it's non fungible. So you know, my token is different from yours. So that's how I see and if this is just a technical protocol, and then we've had some, you know, branding difficulties with the word and if it is because of the different applications, but from my perspective, it's just technical terminology, that opens up a lot of possibilities.
Calin Fabri 07:42
Got it? So it's a it's like a protocol you mentioned.
Michel Traore 07:45
Yes, I would say it's a token that's different from another token that you can own and in its entirety, it can be fully yours.
Calin Fabri 07:54
Correct? And what do people often get wrong about NF T's?
Michel Traore 07:58
Yeah, I would say I mean, they're not necessarily wrong. But I will say something you often hear is that it's, you know, a pyramid scheme, or, you know, everybody's looking for the greater fool, that's going to buy the NFT. From you some point, you know, there's no inherent value in it. And to be honest, that's a little bit how I looked at NF T's first. So you know, it took a while for me to get in to NF T's as well. I think the one angle that's often missed in those because these are the type of PFP projects that we like to call them. And the PMP project is a profile picture project. So that's like a board a board equipped apart. But you know, what you often missing them is that what you're buying is access to a community in something intangible. And that's kind of hard to explain, unless you've been a part of an NFT community. But I would also say like it is a bit misunderstood because NF T's can do a lot more. And I mean, there's so many new projects coming out now, including ours that really tried to give the NFT and then string the value. That is not only based on building it up with something and then selling it on, it's actually something that worth holding and owning. So yeah, I would say that the biggest misconception is that it's only schemes that are made to you know, earn money quickly and be dumped. It's a lot more than that. It's a technology that can be used to solve a lot of problems and do great things.
Calin Fabri 09:16
So in the preparation for this episode, I kind of did a little bit of research. And indeed, you kind of see NF T's being used in in the gaming industry in the film industry. You're doing it in the music industry. But also if it was used a lot in speculation, it kind of reminds me a little bit of the 2000 era when if you would have a website, right? So probably like in web one, if you had a web two, if you had a website, if you had.com You know, you would just go and try to raise millions. And that was kind of a bubble because it was based on this new trend and technology and also now like what NFT is, indeed also you see a lot of speculations happening but also at the same time. They're just a lot of Very interesting projects and the mechanism of NFT, then kind of captures much more value. One company that also comes to mind is sarara. Right? And how did you get interested in the topic? Like in web three on NFT? Yes.
Michel Traore 10:20
Yeah, I mean, I would say it was maybe, like 2015, or something. I had a colleague and friend Frederick, who started doing analytics later, he was going on and on about crypto in different ways. And I got interested about my coins traded a little bit, but it kind of ended there. And during the NFC hype last year, I actually took my time to do some research and understand like how it actually works, there it is, but I never actually got involved in any NFT projects. And that's because I just didn't find like, I just found it so difficult to value them. So was it a good time to buy a certain NFT? That's expensive or cheap? Like I couldn't even figure it out. So I never even got into it. So yeah, for me, it was more like I was into trading coins a little bit, you know, privately, I knew about how annuities worked on a high level. And I wasn't active in the NFT community, but I had it in the back of my mind as a great technology. And yeah, when we started another block for me, it just made total sense to use NF T's to solve the problem.
Calin Fabri 11:24
Do you remember the day when you decided actually to quit your comfy job at ShipStation? And start another block?
Michel Traore 11:32
Yeah, I don't I don't think it was a day. I think it was a process. I just felt that there were because I you know, I'm a person who I often have tonnes of startup ideas simultaneously running from my head, you know, but I just felt that there was so much in this I really liked because I am a big music lover, I play music, I listen to a lot of music, I see that there's a clear problem here that hasn't been solved. And I like you know, I really wanted to be a part of the web three wave and this wave of startups. And to me, I felt that this application of NF T's is actually you know, it's clear that we came from a problem and we saw NF T's as a solution more than you know, viewing NF T's web three as a space we want to be in and try and find a problem to solve. So, yeah, I think that, you know, when all of those things came together, for me, it just made complete sense for me to quit the comfy job and to try something.
Calin Fabri 12:23
So maybe it makes sense, actually, to deep dive now in to the problem. And the solution that another block is providing
Michel Traore 12:31
Yeah, 100%. So, I mean, the problem right now, I would say in the music industry, is that everybody's going on and on about Spotify, not paying out enough and all of that. But the fact of the matter is that even though you get $4,000, for a million streams, like Spotify are paying out a lot of money to the recording industry. But that isn't divvied up in a proper way. Today, it's the ones sitting with the rights who who ended up getting paid. So to me, the more low hanging fruits, I would maybe not low hanging fruit. But the simplest solution, which is quite difficult to implement would be to have a more fair ownership structure of who has the rights. And we believe that if we create an open market for music rights, then it's going to have several effects. The first effect is that normal people like me and you who like music can invest and make a profit and be owners of great music. But that will also allow future artists or established artists to go directly to us and sell a few of their points to fund new projects. And that will make sure that they end up with a larger part of the ownership than they would have if we were labelled. And also like in general, an open market will increase the value of music rights. And also like what I would want to say like if you have an open market and see where music rights are worth, then future artists are going to be less inclined to go with an 8020 split with a label in the future. So I really feel that the problem in the industry today is very tied to who owns the rights. And our solution will in the long run change who owns the rights?
Calin Fabri 14:05
Right? And also like, if you look at a music rights, it's not very straightforward. I was just kind of researching a little bit because you have on one hand, the rights of the songwriter, right and then on the other hand, the rights of the record label, and then the way that they make money is by licencing either to streaming or public performance, or b2b licencing so when you actually fractionalize a song and when you create this music, right? Like what type of rights are there are no like songwriter rights or like record label rights?
Michel Traore 14:43
So what we're focusing on is what you call the record label, right? It's the master right? So when a song is created, the most simple way to think about it is that if we have a song together it's the simple way to think about as a you have created the song like the notes, the text, and I have done the Recording of that song. So as the music world works today, when that is streamed on Spotify, me who has done the recording will get at present and you who has done you know, the songwriting, and maybe parts of the production will get 20% of the cash flow, when we're focusing on at another block Now initially is those 80 presents. So we're focusing on the master right side. And what we do is, instead of working with licencing, we want people to be able to own lifetime wealth is on the part of the song that they owe. So we work with producers, songwriters, artists, we could even work with labels who want to share ownership with the public. And then we make sure that your fractionalized ownership is actually a part of the future worth is from that master side, right for life, for as long as the copyright is protected. And that's normally 70 years post mortem of an artist,
Calin Fabri 15:54
super interesting. So let's discuss maybe like around an example, right, maybe we can take the example of the 400 and FTS that represent the ownership and weekend anthem acquainted that you guys recently dropped 100%.
Michel Traore 16:08
So it's really, really simple. So what we do is, first, we have our minutes and the minting process is that you go to a website at a certain time, then we have one hour timeframe where there's an invite only list can meet the people on the list, and then there's a public sale. So in this case, we sold out within four minutes, so we didn't go to public sale. But what happens is that you meant your NFT, you create the entity as you meant it. And in that NF t you receive first like the visual feeling of an NF t. So you get a cool artwork, you get a custom sound loop with it, you have real world legal documentation signed by Danny Boy Stiles that shows that you are now the owner of certain amounts of royalties. So that's the part where we connect the real world and the NFT world. And then you get different like community benefits and everything. But then once you have that entity, royalties will start coming to your NFT. So every initially now every six months, you're going to be paid royalties based on the stream. So those six months, but we're looking into now more complicated, more advanced solutions to be able to pay out royalties in real time, which would make us the first they are the first company in the world to enable that amazing. Yeah, and the great thing about like how this process works is that we try to price at mint, we try to price the NFT based on future cash flows from the asset. So we were pricing at a level where you can expect the five to 15% Return on the actual music asset. So we don't price in, you know, all the things we do in the community, the artwork, the custom sound loop privileges, which means that what we've seen is that our NF T's are valued higher on the secondary market than in the primary market. And that creates even more interest for people to want to be a part of the mint and the community.
Calin Fabri 18:01
Interesting. So you sold 400 and FTS, in less than four minutes, only on the allowed list. So that means that it's sold like better than hot chocolate. Please 100%
Michel Traore 18:17
Yeah, and went really well. And I think that for us now like it's a great because this is our second drop, the first one also got sold out in the, during the presale. So I think at first, it's great to prove that if you have a real world asset like music rights tied to an NFT, then you're not as vulnerable to the larger NFT macro market. Everybody knows that the levels of NF T trading, the levels of trading is down and all of that. But you know, we really haven't seen that effect as of yet.
Calin Fabri 18:49
Interesting. I would just like to maybe go back on what you said that every six months, the royalties get paid out based on the streaming, how does that work like this it are you're looking at streaming across different music platforms, let's say Spotify, and if 100 million listeners have listened to that song, then you own the NFT that has the rights for the record label. And then there is a percentage from that a the percentage mentioned.
Michel Traore 19:20
Exactly. So as an MFT. Holder, you own the percentage of the master recording. So when it's streamed on any platform, it can be Spotify attends this or whatever any DSP, then whenever it stream, you will receive your share in payout.
Calin Fabri 19:38
Got it. Got it. And what is the vision here? Like where do you see another block attain in 10 years?
Michel Traore 19:45
Yeah, I would say like the vision has different stages to it. Like the first vision we have right now is to create an open market for music rights and to create Yeah, a big community of music owners out there And to deliver this new path to artists, to give them this opportunity, and to really help the whole music industry. Once we get there, there's so much more we can do. As we're building this, we're solving things that don't exist right now in the nfcu. Web three world, we definitely also see potentially, in using some of the things we build to support other projects that can be more of an infrastructure play in the whole area. Another block in itself will always be focused on music rights or music. And we're you know, we're focusing now on the big, big, big songs, but we're also going to allow up and coming artists to benefit from platform. But then we really want to help the wider ecosystem by offering them the solutions we built for us.
Calin Fabri 20:46
Correct. And tell me more about the next song you plan to fractionalize.
Michel Traore 20:50
Yeah, the next song is it's a really, really big song. It's Alan Walker, and his hit song alone, part two that he does together with Eva Max, I think it has about 400 million streams on Spotify today. So yeah, we're gonna do 500, NF T's, they're going to cost about $88. And then you buy them in each, so we set the price the day of the minutes, but yeah, it's gonna be at $8. And yeah, on average, you'll receive a return on about 7% per year just on the world is. And then, of course, you know, all of the other things we do with the NFT. And the community is something you get just on top of it.
Calin Fabri 21:25
That's amazing, because so this is on a proven system. Yes. So so the strategy here is like to go on and prove in song and actually to open it up to retail investors that are big fans, and actually, they can own a part of a song that they really, really like, or own a part of a song from an artist that I really, really like. And then I wouldn't imagine, and also you get this community feeling much, much stronger, when actually you can participate in the creation of one of your favourite artists.
Michel Traore 21:56
Exactly. And I mean, this is the type of song and even the weekend acquainted is the type of song that normally big funds would buy catalogue holders or very rich individuals would buy the rights of or regulators would have. And I would say, this is the first time where you can actually be only a part of a song like that. And that is the frontier we're trying to break down right now.
Calin Fabri 22:18
Amazing, super excited for the road ahead. And also, I guess the listeners will probably be very interested to be on the allowed list this time.
Michel Traore 22:28
Yeah, I mean, it's, it's, it's great fun. And we have a quite vibrant community, we you know, we're mainly on Discord right now where you can discuss music and NF T's. And those space, there's a lot of excitement going around,
Calin Fabri 22:40
right. So on this chord, anyone can join. Or if you're actually
Michel Traore 22:45
anyone can join, then there are you know, different privileges, some some channels and information you will only get if you're a co owner of music.
Calin Fabri 22:52
Got it. Super interesting. And let's get personal. This is actually my favourite part of the episode. What was the most challenging period in your career? And how did you overcome it?
Michel Traore 23:02
I would say maybe it's, you know, a few years back, I was struggling with quite a lot of anxiety and just feeling completely exhausted from it. I'm not sure how I came over it. I'm quite an active person seeking solutions. I know, I've tried a lot of different things. But it's more like once you have gone through it, I think it adds a dimension to you as a person. And for better and for worse, but for the better. It definitely makes you more of a compassionate person. I would say, Well, yeah, no real tips on the exact steps of how to get out of those situations more than knowing that it you will get out of it eventually.
Calin Fabri 23:41
And how was the anxiety manifesting?
Michel Traore 23:44
All types of ways. It can be physically feeling so exhaustion can be feelings of panic and distress in general, just general discomfort, I would say.
Calin Fabri 23:55
general discomfort and for how long? Did you feel it?
Michel Traore 23:58
A half a year, a year? I would say and it's not like flipping a switch that comes in and goes it's more of a it's more of Yeah, it's more of a how do you say like a scale where you move softly up and down from or at least I did.
Calin Fabri 24:14
Were you aware back then? Or only in hindsight, you're like, oh,
Michel Traore 24:18
no, desperately, I'm a very, like I'm a very self critical person. So I like I'm very aware of what's going on. And if something that's right, I definitely am aware of it.
Calin Fabri 24:29
Thank you for sharing that and how was the intrapreneurial journey different than what you imagined it to be?
Michel Traore 24:36
I think that it is quite similar to what I imagined it to be. I know that when I was working on because I always have tonnes of ideas as I mentioned, and I knew that I want to go one of two ways like either I wanted to do something, B to be private business, retain ownership go for, you know, good profitability, that kind of business. Had a few of those ma and like, or I wanted to do something on the complete different end of the scale, where it's overly ambitious, it's b2c, whether you win or lose, you will have had some sort of impact on the world. And, yeah, I'm really happy I went with the latter. And it's, it's just as I imagined it, some people you meet early on, like, either they love it, or they really think what you're doing is stupid or impossible, and very satisfying to proving people wrong, then it's also equally satisfying to proving to the people who believe in the model and you that things are working when they're working.
Calin Fabri 25:32
Yeah, I can attest, it's very satisfying to prove people wrong. Did you have any moment in this journey? Where you're like, Yes, this is it. Shit, we're really on to something.
Michel Traore 25:47
I mean, we're still really, really early in what we're doing. But I would say like it was this summer, when we started seeing a lot of people joining our discord in our community. And by then we hadn't announced any music, we've only announced our vision and what we wanted to do and build, and to see people getting excited by us, you know, here's the chance to own music, and they're trying to do it in this creative way. And seeing that people could get engaged already there, then I felt that this is something that is it's not just another startup, it's something that's, that's really, really new. We're not just policy, we're not just like copying someone or we're not, you know, this is something that's groundbreaking. And that will have an impact either way.
Calin Fabri 26:25
And what was the hardest part in getting some top songs on the platform, some top people saying yes, top producers.
Michel Traore 26:34
The problem is you always need to get the first one. Like once you have the first one now it's now the phones are ringing all the time, people want to be a part of it, and they want to be part of it. Because we make them look super cool. We make sure it sells good. Like the whole experience for them was really good. So now it's now it's quite simple. But it's it's always difficult to get the first one in because you don't have any track record. And so I would say it's just you know, spending a lot of time with them, really making them trust you as people. Because you know, you're never going to win any top creator with the pitch deck. They need to like you otherwise there's nothing nothing will happen.
Calin Fabri 27:12
Do you remember the moment when you closed the first big one? And you're like shit? Yes,
Michel Traore 27:18
yes, I do. I think it was this Christmas. So when Steve Angelo decided to invest in being part of this, and we felt that if he can believe in this who gets offers every day, then there is something special here.
Calin Fabri 27:30
Amazing. And what was your favourite artists growing up?
Michel Traore 27:34
It's hard. Like every phase you have different artists. I'm still growing up. So I would say like my favourite artist like the last couple of years is Kid Cudi. I would say,
Calin Fabri 27:43
good cardio. Yeah. And could we use actually a song that you guys have fractionalized? At the end of this episode? Well, sure, I thought it will be cool. So when also researching the topic, and also I thought about this problem before that in b2b music, actually, the lead time to agree on a song is kind of six to 12 months, will actually the NFT give you also like, let's say right to use parts of the song, let's say five seconds, 10 seconds, have you thought about that?
Michel Traore 28:13
What you can use if you only NFC is the sound loop, the 15 minutes custom sound loop that is in the NFT, because that we have full rights to and sometimes it's, you know, in this case, if it's the weekend song, it's Danny Boy Stiles who created the song, he did a custom sound loop with the same inspiration, if it's weekend on a Tuesday that we did rehab a lay back loop, then it's actually sort of a part of the song. But what you own in the NFT is hard to owning and parts of the rights you don't own a certain segment of it. So you still need to go the traditional ways to be able to play a full song. And I know there are a startups working on this, how you should be able to, to licence different songs. And that's something that's obviously further down on our roadmap, but it is way more complicated, because then you need to really deal with the rights holders because it's more about where things can be used and not be used. So it's super simple. If you work with independent artists that aren't signed anywhere and are completely free, or free agents, it is way more difficult. Like if you want a Michael Jackson song, it's it's gonna take time unfortunately, in this in the current market or current rules that we play by it's it won't change in a while.
Calin Fabri 29:26
Correct? Yeah, no, actually a Swedish company trying to solve this like fresh for sound. Oh, yeah. Yeah. Yeah. And I was discussing with the guys and I was like, Yeah, but but looking at another block. Couldn't you just have like this 10 to 15 second loop within an NFT. Did you have the right button? That'd be super cool. Exactly.
Michel Traore 29:48
That'd be for us. It's just we see that as a bonus, we see. You know, the main utility is only a piece of the royalty of the main song, but then we just felt that people will want to be able to listen to something in the NFC as well. So that's why we added that, and we're going to be experimenting. You know, we might say that we do Madonna song one day, then we might use a professional producer, great songwriter, and create, you know, a version of that in the NFT. While you own the real song, the rights of the real song in parallel.
Calin Fabri 30:17
Interesting, which 10 seconds, which song should we put on? At the end of this episode?
Michel Traore 30:22
I really liked the sound loop for the Acquainted one. It's a bit low key, but it's good. It's low key, but it's nice. It's the soft sound you can do but a few times.
Calin Fabri 30:33
Amazing. Need to get
Michel Traore 30:35
you need to go get one.
Calin Fabri 30:39
On the second level, on the secondary. Do you have one? Maybe I can borrow yours? Yes. Maybe that's not okay. We can make a deal. And the last question, if Michelle from 10 years ago would listen to this episode, what would you tell him?
Michel Traore 30:55
I think 10 years ago, I was actually working on a startup with my elder brother. And we were coming close to the end of that. And I was going back to doing my masters. So yeah, we just say that you're going to be back on the entrepreneurial ride again.
Calin Fabri 31:11
Thank you very much, Michelle, for taking your time. Had a lot of fun having this chat.
Michel Traore 31:15
Yeah, it was great.