A Vancouver blockchain startup is adding Stephen Harper to its advisory board, hoping the former prime minister can give it a little help with its expansion plans.
Canada’s 22nd prime minister will be announced on Tuesday as a member of the advisory board of Beatdapp Software Inc. The Vancouver-based software company uses blockchain technology to better monitor and collect music royalties that streaming services, such as Spotify and Apple Music, owe to musicians and rights-holders. Beatdapp, which will also announce an early stage $3.2-million venture-financing round, promises to find up to 15 per cent more royalties for songs that might be left out of routine song-play calculations.
The company was co-founded by Andrew Batey, who has directed growth initiatives at other startups, and Morgan Hayduk, who helped lobby Ottawa earlier this decade on behalf of the record industry to extend the copyright term on sound recordings to 70 years from 50. The company was previously self-funded as it developed its technology and began working with record labels to prove its accuracy.
Beatdapp has also named music-industry, global relations and blockchain stalwarts to its advisory board as it navigates sector-specific, global-trade and technological issues. Advisers, it said, include former Universal Music Canada and Sony Pictures Entertainment executive Sarah Scott; Barry Shrum, the Nashville Songwriters Hall of Fame’s general counsel; James Villeneuve, former Consul General of Canada in Los Angeles; and Aly Madhavji, who is managing partner of the Blockchain Founders Fund.
But Mr. Harper’s presence on the board is most likely to turn heads outside of the music industry. It was Mr. Hayduk who, during his lobbying days, first connected with the Prime Minister’s Office.
More recently, with Beatdapp, he was hoping to tap into Mr. Harper’s contacts and global-trade expertise. To the co-founders’ surprise, he agreed to advise the company, which declined to confirm if it is a paid role.
“'He’s a former PM, is he really going to care about a startup?'” Mr. Batey remembers thinking. “We were so stoked to find out that he really does care," adding, not only about startups, but about artist rights.
Mr. Harper gave Canadians occasional glimpses of his music fandom while he was in office, including performing the Beatles’ With a Little Help from My Friends with Yo-Yo Ma, presenting a Diamond Jubilee Medal to an overall-wearing Justin Bieber, and inviting Nickelback frontman Chad Kroeger to 24 Sussex Drive.
“Today, I spend most of my time working with companies and teams that need help navigating global markets,” Mr. Harper said in an e-mail Monday. Citing the 2015 sound-recording copyright extension, he said he has also had a long-term interest in protecting artists’ intellectual property. “As streaming platforms have evolved, it’s logical that new ways to measure and track play rates would be necessary to ensure that artists, writers and labels are paid fairly.”
Since leaving office four years ago, Mr. Harper has joined the board of Colliers International, advised for the law firm Dentons and established his own consultancy. He also advises the San Francisco startup Terminal, which helps American startups get access to Canadian talent and tax credits.
There are few standard payout rates for royalties across the world’s many labels and streaming services, as many deals are proprietary and complicated. With blockchain’s transaction-recording technology, Mr. Batey says, Beatdapp could make it much easier for the industry to keep track of many plays from many places.
“I was very skeptical of blockchain, because I think that there are potential solutions that would be easier to build,” Mr. Batey said. But he came to believe that the music industry’s royalty-collection needs present a strong-use case: “Blockchain is the solution, for better or worse, that will be adopted.”
The startup has already begun partnering with labels to begin deploying its technology – including the music arm of Entertainment One. “When the team came to us with the idea and the opportunity to be involved early, we jumped in,” said Chris Taylor, the company’s global president for music and one of Canadian music’s most well-connected dealmakers.
The Beatdapp team says one of its major growth opportunities is in India, where music from Bollywood productions is a massive source of royalty income. The founders believe that Mr. Harper’s connections could help them gain a strong foothold in the market.
“There’s a huge opportunity there to help bring cutting-edge technology to one of [the] largest markets in the world, with its own unique content," Mr. Batey said. “In order to be able to facilitate that there, we needed someone who knew the market well and knew the political operatives.”
The venture round is being led by Panache Ventures, whose managing partner Patrick Lor was initially skeptical of investing in blockchain or the music business, given their sectors’ struggles. But when he got to know Mr. Batey and the team through the Creative Destruction Lab, the accelerator first developed at the University of Toronto, he was gradually won over.
“All other solutions we’ve looked at in the market basically cannot keep up with the volume that all these streaming services are currently providing,” Mr. Lor says. “This is probably one of the best applications of blockchain we’ve ever seen.”
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