A conversation with Mark Panay: talking music, NFTs and Web3!
By David Maher Roberts. Top image: Dalle-2
I’ve known Mark Panay for years. We met over 10 years ago as we were both active in the Bristol and Bath tech startup ecosystem. He’s the co-founder of Simpleweb (alongside Tom Holder) which is a software agency that also runs an incubator offering up tech resources and expertise in return for equity in startups.
He’s invested in a lot of great startups, one of his recent successes is Olio – an app that connects people to businesses to reduce food wastage. They recently raised $43m in Series B funding (September 2021) and have received countless awards and lots of positive media coverage. Mark spotted the potential in Olio right from the start when nobody was really focussing on food wastage and how to solve it.
Mark is always well ahead on technology trends – he has a nose for this kind of thing. He was one of the first to develop this incubator model (certainly in the region) and he’s always understood, developed and adopted technologies well before they’ve become commonplace. So, with NFTs becoming such a hot topic over recent months, I felt the need to catch up with him to help me grasp a better understanding of it all and to find out what he was doing in this space.
DMR: Let’s start with an obvious question, what the hell is an NFT?
Mark: It is what it says. It’s a non-fungible token. It’s a thing that exists once. Here’s a thing and it is unique. But, the thing is everyone gets confused because some people are saying things like “we’re releasing a load of NFTs and they’re all the same…” but that’s not an NFT. If they’re all the same it’s fungible!
DMR: But if I have a limited series of 10 things they can still be NFTs even if they are the same, right?
Mark: Yes because the technology associated will in effect make each one unique even if the piece of art or piece of music is identical.
DMR: When did you first come into contact with the concept of NFTs? When did you go ‘Bam! I’m in!?’
Mark: I wrote a white paper on this in 2013 before NFTs were a thing before they’d even come up with the name. And my first dealing with it was with records. So we used to run a little record label. We’d do dub plates. We used to get them pressed in this proper old Jamaican shack. In London. Brilliant. And we’d go in there and we did 500 copies as thick vinyl, like half a centimeter thick kind of thing. That’s the ultimate NFT. Cause we’ve got 500, they’re immutable. You can still copy it and create facsimiles of it. But you’ll never have the original unless you go and buy the original vinyl.
Mark: So when me and Tom started Simpleweb, one of the first things that we ever built was Music Wall. It was one of the first music apps on Facebook. We created this thing where you could release a limited supply of music. And because you are in a closed system, it can be non-fungible. So you can literally limit the supply because the database is scoped to Facebook and it just took off immediately, all these labels all over the world, saying ‘yeah we want that’, blah, blah, blah, blah.
Mark: But I come from the music industry, and I knew there’s no money in this. So we just left, literally dumped it after about two months. But that was my first thing. I thought that at some point there’s going to be technology to solve this problem outside of Facebook. But we just didn’t have it. And then I wrote a paper in 2013 about it, and it was when Bitcoin was starting to become a thing.
Mark: And I’m like, what happens if we look at Blockchain or Bitcoin as a media token rather than a token of value. No one gave a shit. Literally. There’s a music forum called PHO, a lot of music industry luminaries are on it. And they didn’t give a fuck. I still have the thread now. I still have the post. The comments were all, “No, this will never work.” I’m like, well ok.
Mark: And then what we’ve done [at Simpleweb] over the last 10 years is we’ve got into the Blockchain world, you know, the ICO [initial coin offering] world. Tokens and all that kinda stuff. And then in the last few years NFTs have become a known thing, it’s got a label. As soon as something’s got a label. It becomes real. So then we started to get into the cryptopunks.
Explainer: The CryptoPunks project launched in 2017 and the 10,000 pieces of unique digital art are commonly credited with starting the NFT craze of 2021 (along with projects like CryptoKitties and Bored Ape Yacht Club). Each one of the cryptopunks was algorithmically generated through computer code and thus no two characters are exactly alike. They were originally released for free for people with Ethereum wallets, but have since fetched millions of dollars at auction.
Mark: Those cryptopunks are shit, right? They’re relics. They’re exactly everything that NFTs shouldn’t be. But because they’re historic, they’re really desirable. This is where it started and because they’re immutable you can collect them. But they’re JPEGs and you’ve got no rights. You can’t do anything with it. You can’t make a t-shirt. You can sell the item (NFT), but you can’t go and make a thing. Which is why the Bored Ape guys have nailed it. They got it before most people (even now).
DMR: What do they do that’s different?
Mark: So everyone just says, “they’ve made 10,000 monkeys”. My view is like, yeah… no, that is not what they’ve done. I mean, that is, that’s what they initiated. What they’ve actually done is create a whole new paradigm in licensing. Like completely changed the IP world. Because when you buy a Bored Ape, (which originally was $800 and now is about $400,000) you can then claim a Mutant Ape and what makes them special is the licence. So at its simplest, once you own a Bored Ape ape, you want to go make a million t-shirts with that image, you can do it. It’s up to you. You wanna go and, you know, put it on the side of a car, you can do that or whatever you like, as once you own the NFT you own the rights.
DMR: They’ve also decided to create a film, right?
Mark: We use the film as a really good example. So they’ve hired a script writer. And the script writer has basically written a script for Apes. And then they’ve gone back to the community and said, we need to license the characters for this film, back from the people who bought the apes. So people who bought the apes are now licensing their things back to the film. Genius. There are books coming. And there’s a club that you can only get into if you’ve got a Bored Ape.
DMR: That’s incredible.
Mark: I mean, it’s elitist twattiness. But it’s fucking genius as well.
DMR: So how is this manifesting in other areas. Like movies, art, music?
Mark: One of the big trends we’re gonna see is films funded by NFTs. So they’ll create stories and the characters, then they’ll sell them to the fans who will then own them. That will raise the money. Then they’ll license them back.
Mark: You’ve got games where players earn yield from their characters. The kids are making more money than the adults! I’m watching young people in their 20s making loads of money. I know a guy who’s a wicked artist. Really good artist. He’s just given up his day job because he can earn some money. And he’s doing his own collections and selling them for $500 each and doing 3000 at the time.
Mark: That’s serious money, you know. These young people are creating highly profitable micro businesses without ever having to touch anything real. Which is slightly terrifying, But kinda cool.
DMR: It is kind of cool. What about music? What’s happening with NFTs and music right now?
Mark: So I am all over that, as you’d expect. It’s interesting. Because at the moment you’re starting to see music NFTs. You’ll see people starting to look at them as collectibles in the same way as the art stuff.
Mark: There’s a startup called catalog. I don’t think it’s very good (yet) to be honest, but it’s still super smart. They’re doing one-off collectibles for normal people. So I could go on there and sell one copy of a tune I made 20 years ago, as long as it hasn’t been released before. 2 ETH. Which is eight grand [at the time of the interview 1 ETH = $4k]. And this is happening at the moment and these people are then tweeting going, “I’ve made more money from selling one thing in this particular medium than I’ve ever made on Spotify and ever will make on Spotify.”
Mark: And then you’ve got another model. These guys are badass. They’re called Block Tunes. What they’re doing is they get in multiple artists to record stems, and then what they’re doing is, basically using a really simple AI to make tracks from these stems. And then they’ve got maybe three or four variations of the original based on the same BPM and switching the stems. This is not a new thing really. But what is new is it’s gonna mint that for you automatically. So you’ve now got this finished version. You own it. And if I wanna go make an advert and put that on it, I can do that.
DMR: And what about you… what have you been working on in the music / NFT space?
Mark: One of the things that we are doing is called Amplify. So we started Amplify after the pandemic. The entire music live industry was fucked. The venues were fucked, the musicians were fucked. Shocking. And so Irfon Watkins (from Dovu) and Ian Mathews (from Kasabian) came to me and said, “Mark, how can we solve this problem?” I’m like, ‘What?!’
DMR: Gulp!
Mark: Yes. How can we solve the live music industry? I’m like… give me a week.
Mark: Anyway, so you know that the promoter, (like Ticketmaster), they take all your money and they hold/invest it while they’re waiting for the gig. And then they take all the money from the investment, whether it’s just interest or whatever it is. They’re like a bank.
Mark: We were like, why don’t we democratize that a little bit, make it a little bit fairer for everybody else. So a promoter (or the venue) comes to us and they give us say 10% of their ticket sales and then we’ll match that. So, we both put some money in, and then we put that in a pot and that pot generates some kind of yield (Annual Percentage Yield).
Note: since this interview, Amplify has launched its live sessions to put this whole model into practice. The first one was in Bristol (England) back in July and it featured Emz. You can see how the pot is performing for that particular gig by checking it out here.
Mark: Then the gig happens and then the artist gets involved and the artist basically creates assets from the gig (NFTs, which we call ‘memories’). So they’re creating memories and they might be one-off collectibles or they could be collections of multiple things, and then they sell them to fans. So we’ll say 20% of that goes automatically back into this pot and continues to generate yield. And then that yield is streamed back to the artist, to the venue and/or the promoter and to us (Amplify). And what that means is the artist in theory can create revenue from that gig forever. So it’s the gig that never ends.
Mark: We did a test at the Square bar. We got Tiny Dino, a local band. They did a little gig and we put £500 into this and they’ve been earning, I think, $10 a month from it. Which is not gonna change the world. But once you’ve done that a hundred times, you’ve now got a grand of money. And it doesn’t necessarily stop.
DMR: What else excites you about NFTs and tokens at the moment?
Mark: So gaming or social tokens, you know, that’s another thing. Social tokens are going to be massive. The future of social networks is NFTs in my opinion.
DMR: What do you mean by social tokens?
Mark: Like I mentioned earlier with the Bored Apes. You can only get into their website if you’ve got one of those in your wallet.
DMR: Okay, so it opens up and creates community, it’s a private members’ club. It’s status.
Mark: It’s authentication. It’s status. It’s all of those things.
Mark: Another thing we have been working on is we built a thing for slack to reward good work with tokens. You know in Slack when someone does something cool, you give a thumbs up. And so we’ve basically enabled anyone with slack to add tokens. So you basically have your own company token (a corporate DAO) [Decentralised Autonomous Organisation]. So you’ve got your Dialect token and you’ve got say 10 million of them. Right. Doesn’t cost anything. It’s magic. And you are all in slack together. And when somebody does something cool, you give them a ‘strong work’ emoji. And as soon as you give them a strong work emoji, it gives them your dialect token. So they get rewarded a Dialect token, or two or 10. And then what we’ve done is we’ve built a plugin for Shopify and you can now go to Shopify and spend your Dialect tokens.
Mark: There are so many other areas to discuss. Banking, marketing, events, contact sharing, etc… but maybe that’s for another chat.
DMR: We need to plan for a part 2 to this interview at some point in the future as there’s so much more to explore.
I have to let you into a little secret… that’s not really how the interview ended. In fact, Mark and I chatted for another hour or so about crypto, DeFi and how Web3 is disrupting marketing. But I thought it would be best to keep all of that good stuff for another day.
What I wanted from our chat (other than to spend time with him and eat sushi) was to better understand what NFTs and Web3 could mean for the entertainment industry. His understanding of what is changing here is so much more advanced than mine or than most people I have spoken to, and he really helped to open my mind to the opportunities.
From my perspective, the features he spoke about that really stand out (and that can make a big difference) are smart contracts (and the ability to bake in revenue shares into the code), exclusive access (using NFTs to access private areas online) and the concept of ‘investing’ income to generate (potentially) income that never stops. Other than the top artists, musicians really struggle to make a living and if Mark and Amplify can really deliver on the idea of ‘the gig that never ends’, they are likely to have a long line of artists at their door wanting to work with them.
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