About POTENTIAM Decentralized Music Platform

In the last couple decades, mass adoption of the internet has revolutionized the way in which people interact, and in turn reshaped the structure of entire industries. For example, online marketplaces have drastically reduced the need for costly brick and mortar retail outlets. The advent of blockchain technology and its decentralized nature presents even more opportunity for a revolutionary restructuring of countless industries. By providing trustless platforms as well as customized smart contracts, the need for trusted bureaucratic institutions to facilitate interactions is greatly reduced or even eliminated. For instance, blockchain based currency ledgers eliminate the need for banking institutions by not only connecting users of a network, but by providing a platform where the accounts and associated transactions can be trusted to be accurate without the need of oversight/control of a central authority.

The rise of digital music has significantly changed how the industry operates, but surprisingly the overall structure has remained almost entirely intact. Power still resides with the traditional entities such as record labels and publishers, with countless layers of bureaucracy between the artists creating music and the public who ultimately consumes it. The vision of Potentiam is to create a decentralized platform that directly connects music creatives with each other and their audience.

Music Industry Overview 

The business structure of today's global music industry has been remarkably resilient during the digital revolution. The capital intensive process required to record a master, and produce and distribute physical copies to consumers is the reason for the rise in prominence behind the growth of record companies into industry controlling corporations. Advances in technology have drastically reduced these costs and yet we find major record labels and publishers at the center and in control of the entire industry.

Record Labels & Publishers 

Record labels generally scout talent and try to use their vast resources to sign them to deals where the label will invest and facilitate the singer/musician’s career if they sign over a large portion of their sound recording copyrights for the music they create. This can range from 30-50% of gross revenue. Publishers serve a similar function for composers, and are usually a subsidiary of record label, also taking anywhere from 30-50% of musical composition copyrights. For this they will facilitate the promotion and distribution of an artists work down the five main distribution channels and in turn collect the revenues on the artists behalf.

Digital Distribution 

Record labels outsource digital distribution to digital service providers such as itunes, beatport, spotify etc. who generate revenue by either selling digital downloads or charging subscription fees to stream from the entire catalog. Of the revenue generated by DSPs, about 85-90% gets paid out to the record label in the form of royalties. In 2016 the global music industry generated about ~$7.9 Billion in gross revenues which is ~31% of total gross revenue for that year.

Physical Distribution 

The most significant change in the past two decades is the shift away from the physical distribution of music in the form of CDs and or vinyl records. The medium still exists, but is generally reserved for the creation of mix tapes or genre centered compilation albums. Record labels here too outsource production to CD and vinyl record manufacturers who in turn take a 15% cut of the sale price before paying the record label. Though greatly reduced from years ago, the global industry took in ~$5.3 Billion gross in 2016 which is still ~21% of total industry revenues for that year.

Sync Licensing 

A small but not insignificant source of revenue is from the selling of synchronization licenses for the use of music paired with video in things like commercials, TV, movies or video games. Record labels will usually contract a sync agency to promote the music to TV/movie and video game studios where the right to use the music is licensed for a one time fee, from which sync agencies take a cut and then pay the rest to the record label. The smallest of the five main revenue streams, sync licenses accounted for ~$314 Million in 2016 which was ~1% of total revenues that year.

Broadcast TV/Radio 

When a radio station or TV shows broadcasts music over their given medium they are required to pay public performance royalties for the use of both the composition and the master recording. Generally, stations are kept honest by the work of various P.R.S.’s. Performance rights societies will contract with a record label to represent an artists catalog. They will then monitor the many stations content and pursue royalty payments from the stations who have broadcast music for which they represent. A P.R.S. will generally charge 10-20% on the revenue collected, depending on source. 2016 gross revenue was ~$2.2 Billion, or about ~9% of total revenues.

Live Performance 

The performance of live shows is one area where, generally, record labels play an insignificant role. But in there place are an array of booking agents who facilitate the interaction between the artist or bands manager and the venue owner or promotion agency who are running the event. They will coordinate schedules, negotiate and close deals, arrange transportation and hospitality etc. For their services, the average rate charged by booking agents is somewhere between 5-15% of ticket and merchandise sales for the shows they facilitate. Global revenues from ticket and merchandise sales at live music events was ~$9.3 Billion, or about ~37% of total revenues.

Marketing and A&R 

The most important role played by record labels today is their investment made to marketing and A&R. The investment in marketing give record labels the ability to get their talent in the ears of countless potential consumers, and the investment in A&R ensures the professional excellence of the music being produced. No matter how talented an artist is or how good their music may be, no one will pay to consume it if they have never heard of them before. In 2016, record labels cumulatively invested ~$4.5 Billion into marketing and talent curation, which translates into significant power in determining what becomes widely popular.

Managers 

One final layer of bureaucracy is that of the artist manager. The job of a manager is to facilitate the relationships between their client and the various entities with which they directly interact; record label or publisher, booking agent, A&R and marketing etc. They negotiate deals on the artist behalf and try to pursue new opportunities. Though varying widely, managers generally take about 10-20% of an artists gross revenue.

The Potentiam Platform 

1. Potentiam Core 

The backbone of the Potentiam network is the tripartite Potentiam Core. A private social network that enables composers, performers and producers to both advertise their talents and seek out other music creatives for collaboration. A digital production studio that gives artists access to the tools needed to compose, record and edit their creations. A catalog management system that gives users complete control of their content, from determining share of copyrights to facilitating the granting of licenses amongst users on the platform. Once an artist(s) is satisfied with their creation, be it a musical composition or a sound recording, they can publish the file and it will automatically be imported to their catalog. If multiple artists participated in the creation of a final work, ex. a composer and lyricist collaborate within digital production studio workspace to create and publish a song, share of the musical composition copyright would be determined upon agreement by both users. Compositions contained in user catalogs will be available to other users on the network for use in recording songs. When a performer and/or producer publishes a recording using content from another user’s catalog, the relevant rights holders will be prompted to grant the relevant licenses. Once those rights holders have agreed to the licensing terms and the artists and producers agree to their share of the sound recording copyrights, the master recording will be published and added to the artist’s catalog.

The resulting database of master recordings will then be made available through the multiple distribution modules, each customly curated for the type of client relevant to that distribution channel. The payment of royalties back to the relevant rights holders will be facilitated automatically by customized smart contracts.

The Potentiam Tokens 

The Potentiam Platform will have two tokens that will serve two different functions. The main coin will act as the platform’s backbone and will serve as the medium of exchange for all platform transactions. The secondary token will underlie Potentiam Classic’s content rating and reward system. 

Potentiam (PTM) 

PTM is the platform’s ERC20 token and has all the functionality implied therein. Available during presale and ICO, token will be the currency needed to transact on the various distribution modules associated with Potentiam Core. Token owners will also have the option of staking their tokens in the Potentiam Vault granting special rights within the platform. 

Potentiam Vault & Vault Nodes 

Owners of PTM will have the choice of whether to hold their tokens in their potentiam accounts wallet or any ERC20 compatible storage device. If they have them on the platform they will have the option to stake their tokens in the Potentiam Vault which will earn them special rights and privileges. Tokens placed in the Potentiam Vault will be staked for a set period of time and for every 10,000 PTM staked the owners will create and have ownership of one Vault Node. Users with less than 10,000 PTM can pool their tokens into a communal Vault Node and share the associated rights and privileges based on the weight of their contribution. A full description of Vault Nodes and their function will be expressed in part VII below. 

Clout (CLT)

The secondary token will underlie Potentiam Classic’s rating system. It will remain internal to the platform and will be the currency with which readers reward content they like. Content ratings will determine both how the platform curates the content for readers, i.e. higher ratings will garner more prominence, and determine the share of PTM which is regularly awarded to content creators by the platform.

Potentiam Classic Rating System 

Potentiam Classic accounts will automatically be credited with 100 Clout when the account is initially created. These will be used at the reader’s discretion to award to articles and content they like on Potentiam Classic. When a token is awarded to an article it will remain tied to the content for purposes of calculating PTM reward for a total of 30 days. This value is referred to as Article Power. After thirty days the token will be burned and the account from which it came will be replenished. A running total which tracks the complete number of tokens that have been awarded to the article will also be recorded and serve to determine its prominence for purposes of curation. This value is referred to as the Article Rating.

Potentiam ICO 

A total of 100,000,000 tokens will be minted for the Potentiam platform. Our aim is to render an extensive and groundbreaking experience with the features on Potentiam. Funds collected will be used for the technical development, legals, testing, deployment and marketing. One hundred percent of the total tokens allocated for our Core Team will be locked into a smart contract with an emission rate of 5% per month, beginning one month after the end of the public crowdsale. This is to create incentive for team to deliver, show our commitment and increase confidence in the value of PTM to the investors. If the crowdsale does not reach the anticipated amount, we have a strategy to re-adjust our timelines, development and marketing process to safely accommodate the outcome.

Initial Token Allocation 

The token distribution will be allocated as follows: 

  • 60,000,000 (60%) Public Crowdsale 
  • 25,000,000 (25%) Potentiam Team (Locked for 20 months) 
  • 11,000,000 (11%) Platform Development Tokens 
  • 3,000,000 (3%) Bounty Tokens 
  • 1,000,000 (1%) Reserve Tokens

Public Crowdsale - Amount of PTM that will available to the public for purchase during both pre and main sales. Team Tokens - Allocated to the founders of the potentiam platform. Platform Development Tokens - Used in conjunction with earnings from the crowdsale to finance the successful development of each branch of the potentiam platform. Bounty Tokens - Used as rewards for various community bounty programs. Reserve Tokens - Held in reserve in case of extraneous circumstances.

Crowdsale Details 

1 ETH = 4000 PTM 
Presale Hard Cap = 5000 ETH 
Total Hardcap = 15000 ETH 

ALL UNSOLD TOKENS WILL BE BURNED (This will happen in the case of not meeting our cap or in the case of Eth value increasing to the point where the hard cap cap is met quicker) 

Bonuses 
Presale Week 1 Cap 3000 Ether = 20% 
Presale Week 2 Cap 5000 Ether = 18% 
Main-sale Week 1 Cap 9000 Ether = 12% 
Main Sale Week 2 Cap 12000 Ether = 8% 
Main Sale Week 3 Cap 14000 Ether = 4% 
Main Sale Week 4 Cap 15000 Ether = 0%

The Core Team


Marcus O Adetola 

CEO 

Marcus ventured into the music industry managing emerging artists and witnessed the tremendous difficulties present. Being one who does not see obstacles only opportunities, he founded Britznbeatz a UK music discovery music platform. He is an all-round entrepreneur and a problem solver.



Ali Zain 

CTO 

Ali Zain has over a decade of experience in Full-Stack application development. He is an expert in blockchain, cryptocurrency & ICO development. He also co-founded Ideofuzion.





Ben Balogun 

COO 

Ben is a serial entrepreneur who acquired his Bsc in Accounting and Finance from the University of Plymouth. His passions are music and fintech. He is a co-founder Britznbeatz and Potentiam. He envisions Potentiam giving the control over creative direction and reward in the music and entertainment industry back to the people with the aid of the blockchain.


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author: BUNSEL

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