You’re having a pint or two with some friends on a Friday night when the opening notes of a classic song begin playing. It takes everyone back and starts a conversation about the song and musician. Sooner or later some facts are in dispute. Who first recorded it? Did Sting every cover it? Didn’t Tiny Tim play the guitar on the live version recorded at Woodstock?
Joe Mohen wants to provide an easy way to settle that argument and give music fans so much more. Mr. Mohen is the founder and CEO of Chimes Media, holders of one of the largest datasets of music production credits. That forms the basis of a searchable database of music information and a marketplace of products appealing to music fans, including merchandise, public access to artists, and even a professional automated system to hire recording artists, composers, producers and others via blockchain-based smart contracts.
Mr. Mohen began his career as a systems programmer and software engineer at Chase before joining management at Citibank. He founded Proginet, which created an enterprise systems management product that attracted equity investments from Novell and Microsoft. It went public before being sold to TIPCO.
Mr. Mohen then founded Election.com, a company that ran the 2000 Arizona Democratic Primary, which was won by Al Gore.
“Many vested interests aligned to try to stop it,” Mr. Mohen said. “Hackers all over the world tried to sabotage the online voting.”
One memory which stayed with him from that experience was how many more people from disenfranchised populations voted due to the increased convenience, Mr. Mohen said. Turnout from young people and those from visible minorities increased from 500 to more than 830 per cent . The lesson was clear – there is value in convenience and plenty of opportunity.
From 2003-2009 Mr. Mohen served as chairman of SpiralFrog, a company that distributed music from major labels free to people in return for them watching commercials as their music downloaded. Early to market, SpiralFrog launched in 2007 but proved unsuccessful as the temporary downloads were not compatible with many devices. Spotify and others soon launched and capitalized on improved wifi and high-speed wireless data networks to deliver an ultimately more successful product.
One other key takeaway for Mr. Mohen was his experience taking a company public through the filing of a Form 10, which is used to register a class of securities with the United States Securities and Exchange Commission (SEC). While he filed all of the paperwork and the company was made public, Mr. Mohen’s company was not traded nor listed on any exchange.
“The combination of those experiences taught me what to do when registering tokens with the SEC,” Mr. Mohen said.
Ah, tokens. The much-maligned and poorly understood new investment vehicle that has been abused by quick-buck artists and left regulators around the globe scratching their heads. While some entrepreneurs have chosen to go as far as they can and see whether or not the government puts a stop to it, Mr. Mohen said Chimes Media anticipates regulation and wants no disruption in their business model when the regulation inevitably comes.
Chimes Media has purchased extensive databases and repurposed them with the intention of creating the IMDb for music. On top of that foundation they intend on layering music-related e-commerce products and services made possible by cryptocurrency, Mr. Mohen said.
IMDb is one of the biggest entertainment websites with an estimated monthly audience of 250 million visitors, he added. Music should have similar demand, yet no comparable site exists. Wikipedia coverage is inconsistent, especially for the one-hit wonders or those artists who never even made it that far. Information that the true fan wants to know, such as minute details about album filler songs and guest collaborations, is hard to find.
That is the base, upon which Chimes Media plans on offering entirely new services that will appeal to independent artists and those not receiving enough attention from their label. Merchandising and even online chats where fans pay tokens to hang with their favourite artists and ask them questions.
“That may not appeal to Bono or Springsteen but the rest would be delighted to make $1,000 in 15 minutes,” Mr. Mohen said.
The Chimes Media network will also facilitate collaboration by allowing artists around the world to connect. People will also be able to hire artists with specific talents by contacting them through the network.
But is the Chimes token a cryptocurrency, and if so, how do they keep the SEC happy?
That’s where the Form 10 comes in, Mr. Mohen said.
“When you file a Form 10 the company becomes effective 60 days later,” Mr. Mohen said. “The SEC still comments and eventually clears you, but 60 days later you can operate.
“They cannot slow the process down.”
That’s not the way things normally happen, Mr. Mohen said. Many investors may be interested in backing a company but aren’t allowed to participate because they do not fit the regulations.
But if the issuer is registered, they can sell equity tokens but not list them for six months. Sixty days after filing the Form 10, the company is a registered, reporting public entity where anyone holding a token for six months can freely trade on an exchange, Mr. Mohen said.
Chimes Media is conducting what Mr. Mohen calls a “bifurcated ICO.” Chimes is offering CHI, a utility token, and CME, an equity token, during the sale. The equity tokens represent ownership in Chimes while the utility tokens facilitate a circulating, functional micro-coin for conducting business on Chimes.
“Everyone tries to do a compliant ICO,” Mr. Mohen said. “Everyone wants to trade securities tokens like stock shares, but if the company is not public, it is hard to trade them.
“The problem is people create tokens that need to operate as a cryptocurrency but they need to raise equity.”
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