SFX.io; “Bitcoin Could Change How We Pay For Music Online”

“Bitcoin digitizes the busking experience. I love to think of the subway musicians in New York who puts out a guitar case to collect tips and sell albums. Bitcoin can take this experience and put it online, globally,” said SFX.io founder Clay Kohut.

Last month, we reported on the music publishing website, SFX.io, that’s integrated bitcoin tipping as a new way to support musicians. The addition of tipping was met with a large amount of support from music fans and creators alike. “Since [integrating bitcoin tipping] we’ve gone from 10 to 610 registered users. People are super excited to share their music, gain exposure and receive tips.” explains Kohut.

SFX.io originally launched in 2012 but the project was shelved due to previous commitments. The company relaunched in December of last year with the mission of being a “simpler and friendlier SoundCloud”.

The project is quickly evolving, “After seeing the enthusiastic response to integrating tipping, I started to try and think of ways I could integrate crypto into the core of SFX (as I’m sure it’s only a matter of time until another major audio site slaps on a ChangeTip button).” explains Kohut.

The company’s focus has now shifted to being a “Product Hunt meets a bitcoin-based Bandcamp.” The website hopes to provide a new way for artists to monetize their work by going beyond tipping, enabling artists to sell their music as well.

“Powering sales with Bitcoin will allow for instant payouts to artists regardless of where they are in the world […] versus the 45 days iTunes takes or 3-4 days ACH transfer from PayPal to Bank Account on BandCamp. We’re going to offer awesome options for purchasing: like flat rate, pay-what-you-want, no minimum rates so artists could sell a song for 10 cents if they wanted to and still receive instant payouts.”
— – Kohut

SFX.io sees crypto-currency as particularly advantageous for artists in emerging markets. Musicians in developing countries are able to share their music with the world, but due to high transaction fees and poor payment infracture, they can struggle to fund their music. Low transaction fees, and easy international payments, could make crypto-currencies a viable alternative.

Bitcoin payment channels have been gaining traction elsewhere in the Industry. While SFX.io integrated bitcoin payment channels, the digital currency tipping service, ChangeTip, has been gaining popularity on social media websites. In recent months, the service has gained tens of thousands of users, currently claiming over 85,000 active participants.

Beyond the bitcoin industry, many mainstream media entrepreneurs are taking notice of the potential of digital currency payment channels. As part of Linkedin’s big ideas of 2015 series of articles, CEO of the Aspen Institute and best selling author, Walter Isaacson, said bitcoin micro-payments would be the largest disruptive force of 2015.

“Ever since the British parliament passed the Statute of Anne four hundred years ago, people who created cool songs, plays, writings, and art had a right to get paid when copies were made of them. A flourishing cultural economy ensued. Likewise, easy digital payments will enable a new economy for those who sell such creations online,” wrote Isaacson.

Venture capitalists have also taken notice of the potential of bitcoin to change the way content providers access funding. $3.5 million was invested in ChangeTip alone last month. SFX’s vision of using crypto-currency to transform the online music industry has been partially validated with its recent acceptance into the startup accelerator, BoostVC.

“BoostVC is full of passionate entrepreneurs working to build the future of the Bitcoin economy. We’re looking to build bitcoin into the core of our product in a lot of new, exciting ways […]There are so many smart people [at BoostVC] to provide feedback / bounce ideas off of and the mentors are second to none,”
— – Kohut

Boost has already incubated more than 20 bitcoin startups, and recently made the decision to exclusively accept bitcoin companies. The accelerator has optimized itself for bitcoin by providing ready-made solutions for unique problems within the industry, such as getting a bank account. The company has also curated a network of mentors experienced with building bitcoin companies, including venture capitalist Tim Draper and co-founder and CTO of Circle, Sean Neville.

In addition to the $20,000 in seed capital BoostVC provides, SFX.io will be given housing and office space in Silicon Valley during the three month program.

Kohut plans on using the seed capital to develop a team of designers and engineers, to bolster the website’s design and performance. The music platform will soon add a more robust profile and search-discovery system, with bigger updates for the website’s e-commerce and payment infrastructure to come.