Music Publishing Site Sfx.io Integrates Bitcoin Tipping To Monetize Songs

Since the dawn of the internet, people have been digitizing their music, movies & picture content to share with the world. Being able to make a copy of a song or movie at basically no cost has reshaped monetization strategies for content producers during the last decade.

Mainstream Media has adopted, somewhat reluctantly, to the fact that print was dying during the early 2000’s. Strategies of moving entire publications to online and testing out entire new models of monetizing ranged from the obvious banner adverts, to pay-walls and right through to now, an era full of ‘Advertorials’: Content which is written by advertisers to look and feel like an article but designed to sway opinion towards a product or service.

Bitcoin’s payment system has long be evangelized by supporters for its ability to send small amounts of money, as low as pennies, over the internet. This phenomenon is called ‘micro-payments’ (payments under $10) and in the last couple of months, micro-transactions have been catching the attention of advertisers and content producers as a viable alternative to traditional online monetization strategies. This may not stop the sea of highly annoying ‘Top 10 this’ or ‘5 reasons why that’ type articles but what micro-transactions do allow is for consumers to place their money where their eyeballs are and effectively vote with their wallets on what good content is and more importantly, isn’t.

As part of Linkedin’s #BigIdeas2015 campaign, CEO of the Aspen Institute and best selling author Walter Isaacson, wrote an article explaining why he thinks digital currency micro-payments could save content producers like journalists. “At the moment, most news sites are either beholden to advertisers or force readers to buy a subscription. Frictionless coin systems that allowed us to buy digital content on impulse would support journalists who want to cater to their readers rather than just to advertisers. It would encourage news sites to produce content that is truly valued by users rather than churn out clickbait that aggregates eyeballs for advertisers”.

Clay Kohut, founder of the music publishing site Sfx.io, thinks micropayments could have a similar effect on music, “Traditionally, musicians would sit in steamy subway stations with a hat out to collect change from passers-by. Bitcoin opens up the opportunity for digital busking, allowing online appreciators to throw some digital change into a digital-musician’s digital-hat — It’s all very futuristic and extremely exciting”.

The New York based music startup, who hopes to be a “lighter and friendlier” SoundCloud, kept those thoughts in mind when they were thinking about how digital currency payments could impact indie music creators. As part of their first step in this direction, they added the ability to send bitcoin tips to content creators on their website.

“Cool service! Uploaded a Bitcoin track!”

• Redditor, Djleo

Djleo, whose real name is Leo Treasure, is just one of the numerous redditors who uploaded music to the site after the announcement of adding tipping. Talking to BNC News, Treasure said he uploaded songs to the site to reach new audience and hopefully monetize through tipping. Another redditor, MadMalletMover, also uploaded tracks to Sfx.io because he had grown tired of the pay-for-data subscription model run by large music streaming sites. SoundCloud charge music creators to see data about how their profile is doing. He sees bitcoin tips as an alternative that can offer a real measurement of what people think of his music.

“The social media phenomenon of ‘tipping’, or expressing one’s appreciation over the Internet with small monetary or other digital gifts, is building momentum.”

• ChangeTip CEO, Nick Sullivan

Tipping with bitcoin has recently gained in popularity. ChangeTip, a bitcoin micro-payments company, allows people on social media like Twitter and Reddit to tip other users bitcoins. The catch however is that services like ChangeTip are Centralized and the participating website must integrate their code to have the tipping function operate correctly. An interesting development on the tipping front is the developers behind Reddcoin, the ‘Social Currency’ are planing on releasing a tipping solution sometime in early 2015, that doesn’t require websites to do anything. People can literally be tipped on reddit one minute and re-spend those coins on facebook moments later. Just goes to show how fast this Technology is evolving already.

It has become common for users to tip each other 25c or a dollar worth of bitcoins for posting an interesting article or making an enjoyable comment. ChangeTip’s recent seed round closed at $3.5m and was led by Pantera Capital.

Kohut says he has been excited about bitcoin’s potential for micro-payments for a while and was inspired by companies like ChangeTip to integrate bitcoin tipping into his own platform. “I am a big follower of / believer in bitcoin […] and the recent surge of crypto-tipping made the integration of tips on sfx.io an obvious next step for us.”

Sfx.io is the “simplest way to share sounds online”. Its founder would describe it as a slimmer and friendlier alternative to “clunky, data-heavy” SoundCloud. The company was started in 2012 as a side project but was put on the back burner. Recently the company’s engines have relit, now Kohut and his team are focusing their efforts on the company and its publishing platform.

In the future, the company will be adding more features related to tipping. “We hope that integrating tipping will encourage the sharing and propagation of quality content on sfx.io. We will soon be integrating tip-totals into our algorithmic sorting, so sounds that get tipped more may rank higher on the site”.