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Rock and roll and blockchain

Musicians get a lot of revenue from their live performances, but they lose income due to things like scalpers and ticket scams. So musician Jason Robert is creating a blockchain-based event ticketing platform to cut down on fraud, reduce price gouging, and help maintain the health of the live entertainment industry.

As a professional musician, Jason Robert has played in venues around the world, including Bonnaroo and the Newport Folk Festival. He opened for The Roots, and wrote songs for shows on NBC, ABC, Fox, Showtime, and Netflix.

Now, he is co-founder and CEO of HelloSugoi, where he’s working to create better opportunities for musicians and other performing artists. The blockchain-based platform he is building for ticket purchasing aims to cut down on fraud, reduce price gouging, and help maintain the health of the music industry.

Preston Gralla spoke with Jason about his musical inspiration, how it brought him into the tech world, and the music business problems that need to be resolved.

Q: Why and when did you first get involved in music?

A: As the story goes, I was banging on pots and pans from an early age—actually they were paint cans that my dad filled with different amounts of water to make different tones. Around that time, my mother's cousin was studying drums with the legendary Alan Dawson at the Berklee College of Music in Boston. I expressed an interest in learning to play after seeing my cousin play live, and he was gracious enough to give me drum lessons.

My first lesson was at age 7, and I was totally hooked from there. Music became my obsession.

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Q: Why did music become an obsession?

A: It was the feeling of having the ability to inspire others, the ability to control the temperature of a room. The energy of a room is very compelling to me. I saw very quickly that I could use my instrument to communicate something intangible to an audience. It's a different kind of expressing myself, and I was very, very attracted to that from a young age.

Q: A lot of people take music lessons when they’re 7, but very few become professional musicians. Tell us a little about how you became a musician and what your professional life was like.

A: I played my first paying gig at age 14. I was in a high school band called Good Samaritan, and we were hired to play the bass player's girlfriend's sweet 16 party. From there, we played a lot of school dances and the like. We were really into covering Jimi Hendrix and Led Zeppelin. I was a big fan of Led Zeppelin’s drummer, John Bonham, as many young drummers are.

In college, I began studying jazz seriously, which is still my favorite style of music, and I played in the jazz band at the University of New Hampshire. I'm also a big fan of hip hop, and in my senior year, I joined a band called The Press Project, which was a seven-piece hip hop jam band.

Only a few months after forming, we were asked to open up for the legendary band The Roots. We also toured and opened for acts like Slick Rick, George Clinton, Robert Randolph, and Boyz II Men. We played major festivals like Bonnaroo in Tennessee. From there, I played in an indie rock band called The Honors. The highlight of my experience with them was playing the Newport Folk Festival in 2008.

I felt that I could use technology to help solve the many problems that musicians face.

Jason RobertHelloSugoi CEO

In 2011, everything changed when my brother showed me how to sample records and use music production software called Logic. I realized I could produce compositions without having to rely upon notoriously unreliable musicians, which was incredibly liberating for me.

I packed my bags and moved to Los Angeles, and in true Hollywood fashion, I produced songs and within the first year, using the Lost Midas name, was signed to a U.K.-based label called Tru Thoughts. I produced two full-length albums, which received critical acclaim from the BBC and NPR. I toured the U.K. and North America, and generally had an amazing time as a solo artist. From there, I signed a songwriting deal with BMG, one of the largest publishing companies in the world, where I wrote music for TV, film, and commercials. I played a number of songs on major TV shows on networks like NBC, ABC, Fox, Showtime, and Netflix.

Q: That’s quite a successful run. Why did you leave the music industry and turn to tech?

A: I was really frustrated and jaded by the music business, and on top of that, I was having a hard time making it. I no longer had that passion, that drive, which originally inspired me to pursue a music career.

I decided I needed a change, so I began exploring other interests. My father was a marketing executive at Apple. He began there in the late '90s and rode with Steve Jobs all the way to his retirement in 2011, so I had a lot of exposure to technology, which inspired me. It's another passion of mine.

I also felt that I could use technology to help solve the many problems that musicians face.

Q: How did you end up founding HelloSugoi?

A: Originally, I planned to write a music curation tool. And to get help with my idea, I attended just about every coding meetup in Los Angeles for the better part of a year, which is where I met my HelloSugoi co-founder, Angello Pozo. From Angello I learned about Bitcoin and Ethereum. At first, I had no idea what he was talking about. Then I stumbled upon a paper written by a team of researchers at the Middlesex University of London called “Music on the Blockchain,” and that changed everything. I totally identified with the ways in which blockchain technology could be used to solve the many problems I faced as a musician.

I had also taken an eight-week product management class in L.A., which firmed up my software product development skills. My thesis was developing an event ticketing solution. Once I read “Music on the Blockchain,” it became clear to me that event tickets, as verifiable assets, could help solve one of the problems regarding event fraud and all of the games that are played in the secondary ticket market.

Q: What problems are there with live-event ticketing?

A: A lot of people are taking money, almost literally, out of the pockets of musicians. These days, artists get a lot of their revenue from live performances, but scalpers and tickets scams are getting money that should go to them. And that's a major, major problem.

The problems have to do with the primary and secondary ticket markets. If fans are lucky, they can buy tickets in the primary market. But that doesn't happen very often. Something like 50 percent of the primary market tickets are withheld from the general public. Brokers, scalpers, and bots buy up a large percentage of these tickets in the primary market. That creates the illusion of a sellout, which artificially pumps up the price on the secondary market. So a scalper may have purchased a ticket for $50, but it ends up on third-party websites for some crazy mark-up, like $150. Fans are forced to pay that because there's no more inventory left. And none of the markup for those tickets goes to the musicians or the music industry. It mostly goes to brokers and scalpers.

Not only that, but upwards of 20 percent of tickets sold on secondary market platforms are fraudulent. A broker, scalper, or nefarious reseller will buy a ticket, then create a fake PDF version of it. They’ll list that PDF on several secondary market platforms that don't talk to one another, whose databases don't know the inventory. Maybe one of those tickets is legit, but the others are frauds.

Q: How do you hope to solve the problem?

A: We’re working on a blockchain-based event ticketing platform which will enable event organizers and musicians to program the rules that govern the behavior of the ticket. For example, they can set a cap on how much the ticket can be sold for on the secondary market. In fact, they could restrict secondary market sale all together. So, if an artist wants to sell a ticket for $10 and have zero secondary market, they can do that. Also, by setting the terms of engagement, artists could get additional revenue if they allow a percentage markup on the secondary market and require that they get some of that money.

On the platform, everyone can see the transactions that happen on the blockchain. So, as a fan, I can go online and could see how many hands it's passed through. I can see the original face value of the ticket. And I know the ticket is verified and authentic, because it can’t be digitally reproduced. That solves the problem I described earlier about fake PDFs. Also, because the ticket money circulates in the music industry instead of going to scalpers, the industry becomes more sustainable.

Another possible use for blockchain is rights attributions for creative works. If I'm an artist and I release a song and get it on some TV show, I can define the rules of how much the music supervisor pays for that song. I also can see in real time who is using that creative work, and I get paid instantly, as opposed to having to wait six months or sometimes a year. 

Q: You’ve been both a musician and a technology executive. Compare the two professions.

A: Both require a tremendous amount of passion, discipline, and an undying commitment to your vision. You really have to commit yourself to wanting to solve a problem or to creating a piece of art and sharing with the world. And both are ultimately about grit, above all else.

The challenge of building a business is similar to that of the challenge of being a musician. The odds of failure in both are super-high, and the odds of success are super-low. There's massive risk exposure, but the payoff could be huge. So for me, the risk of failure is actually the fun part. It's what motivates me and drives me, makes me feel like I'm alive.

Q: What are the best three concerts you’ve attended? The best three performance you've played as a musician?

A: I would have to say my number one favorite concert would be the Pat Metheny Group at the Orpheum Theater in Boston. It was the first concert I ever went to. I love the Orpheum, and I’ve since been there so many times, so it would have to be number one.

Number two isn’t really a concert, but more of a night: the Funk Jams at Wally's Café Jazz Club on Massachusetts Avenue in Boston. It's the oldest family-owned jazz club in America, dating back to 1947. It’s where I cut my teeth as a drummer with some of the best musicians in the city in the early 2000s.

And for number three, I'd say My Morning Jacket in the Tennessee rain at Bonnaroo. I still remember Jim James, waving his bandana in circles on the stage; it was totally epic. They played for like four hours.

For my favorite three performances as a musician, number one would be opening for The Roots at the University of New Hampshire. For number two, I'd say that performing at the Newport Folk Festival in 2008 was an honor, because so many greats have played there through the years, including Bob Dylan. And for number three, it would be playing at Oval Space, which was my first show in London, in 2014.

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