Cryptocurrencies, blockchain, NFT and new trends

An In-Depth Conversation with Sergio Mottola of Music Protocol

Music Protocol is set to redefine the music industry through RWA tokenising music catalogues and their corresponding economic rights. Sergio Mottola, a seasoned professional with a robust financial and technology background, is at the helm of this transformative project. Today, we delve into Sergio’s journey, strategic vision for Music Protocol, and insights into the future of onchain music.

– Welcome, Sergio. It’s great to have you here. Can you start by giving us an overview of Music Protocol and its mission?

Sergio Mottola: Thank you, it’s a pleasure. At its core, Music Protocol is a tailored layer one blockchain dedicated to bringing the music industry onchain. The mission is to upgrade the infrastructure and foundations upon which music is built. It provides the music industry with the infrastructure to tokenise music and its corresponding economic rights. In this way, it provides liquidity to a $500+ billion market for any institutional or retail investor – previously only accessible to large institutions from within the industry. Additionally, it provides the music industry with enhanced infrastructure to register, manage, and monetise intellectual property. This initiative brings transparency, efficiency, and new financial opportunities to artists, rightsholders, investors, and other stakeholders.

That’s fascinating. Can you share some background on your journey before founding Music Protocol?

Sergio Mottola: My exploration of blockchain and Web3 started in 2014 during my executive PhD in ecosystem dynamics. I became fascinated with the potential of protocol networks, and the enhancements blockchain could bring to the Internet. This interest led to a role at the Republic of San Marino Innovation Institute, where I led the national blockchain legislation as CEO under the official government mandate. Our proposed legislation was passed in parliament in 2019, positioning San Marino as one of the early European adopters of this technology.

– What inspired you to take the leap and start Music Protocol?

Sergio Mottola: After founding an NFT marketplace for the music industry called Public Pressure, I observed a multitude of inefficiencies in the traditional music industry value chain. One of the main challenges was the need for an open and transparent music market. As a result, we started brainstorming how Web3 could help with these hurdles. That’s when we came up with the idea to tokenise music, establish digital ownership of intellectual property (IP), increase liquidity for these assets, simplify licensing, and support artists with new tools to exploit and monetise their IP. We wanted to use blockchain to upgrade the infrastructure and foundations upon which music IP is built. 

– The Music Protocol has gathered members/partners with an aggregate catalogue value exceeding 1 billion dollars worth of music IP. How did you achieve such tremendous traction where other music-centred protocols have failed in the past?

Sergio Mottola: The key was not selling technology directly but focusing on first building the Web3 Music Association as an industry trade association. The Web3 Music Association is the lead contributor to the Music Protocol. Our value proposition is centred around education, learning, and collective decision-making. We’re not forcing anyone to go in a particular direction as we’ve seen in the past. This philosophy resonated with the industry and led to valuable participation from many stakeholders. Tech-first projects tend to focus solely on the technology without facilitating strategic partnerships or strong relations with the industry.

When you build all the tech and quickly launch a protocol or an app, you often find yourself unable to be agile due to the complexity of the system’s architecture. Our strategy-oriented approach focuses on understanding market needs and creating relationships rather than just selling a technological solution.

– Can the Web3 Music Association be a key differentiator for the Music Protocol?

Sergio Mottola: Absolutely. It resembles my experience running the Republic of San Marino Innovation Institute. My PhD research on ecosystem dynamics shows that every ecosystem has an orchestrator, traditionally large corporations like Google or Facebook. These orchestrators enable the ecosystem to exist by governing different network elements. In the music industry, a trade association can play this role, fostering innovation while guiding participants through appropriate regulatory frameworks.

Many make the mistake of building tech without clearly understanding market needs. We focus on building a strategy and narrative that aligns with the industry, not disrupting it entirely. This involves creating relationships and ensuring our technology solves real problems, providing business opportunities for those who contribute. The idea is to build a platform that facilitates synergy between the music industry and the technology sector, ensuring that innovations are adopted and utilised effectively.

Our strategy has always been about building trust and providing value. We’ve spent a lot of time engaging with stakeholders in the music industry to understand their pain points and demonstrate how our solution can address them. We emphasise strategic partnerships and have built a team with deep industry experience. This approach has helped us gain the trust of major labels and IP owners, which is crucial for widespread adoption. Our partnerships with over 50 respected industry organisations, including major labels and financial institutions, are a testament to our commitment and credibility.

– How has your experience with past market cycles influenced your approach to launching Music Protocol during a down market?

Sergio Mottola: Launching during a down market has its challenges, but it also presents unique opportunities. In the 2021-2022 bear market, we strategically raised funds, focusing on early market entry and community involvement. Our approach is to build strong fundamentals and a committed community that can weather market fluctuations. The down market allows us to refine our product and strategy without the distraction of market hype. It’s about creating long-term value and being prepared for any conditions. 

– How do you see this current cycle differing from the previous one?

Sergio Mottola: This cycle is characterised by a more mature understanding of blockchain technology and its applications. We are seeing institutions like Goldman Sachs and Blackrock coming onchain, launching funds, and reaching out to us. There’s also a shift from speculative projects to those with real-world utility. Investors and users are more discerning, looking for projects that offer tangible benefits and solve real problems. At Music Protocol, we acknowledge this, and we focus on building a robust, regulatory-compliant platform that addresses specific industry needs. This approach aligns well with the current market sentiment, which values sustainability and real-world impact.

– How do you envision blockchain adoption happening within traditional Web2 sectors?

Sergio Mottola: In the music industry, blockchain adoption will likely be gradual, starting with specific use cases which offer clear advantages. For example, tokenised music would enable the creation of an open market for music assets, which is a significant pain point today. We are currently working on a solution called USDM, which is solving this exactly. As these use cases prove successful, adoption will spread to other areas. The key is demonstrating how blockchain can enhance existing processes for stakeholders rather than completely replace them. Collaboration between traditional industry players and blockchain innovators will be crucial in this transition.

Can you share your thoughts on the future of blockchain and what more is needed for widespread adoption?

Sergio Mottola: The future of blockchain is promising, but widespread adoption requires several key factors. Clear regulatory frameworks are essential to build trust and ensure security. We also need to focus on user education to demystify blockchain technology and its benefits. Furthermore, blockchain solutions must be scalable and user-friendly to gain traction. Real-world applications that demonstrate blockchain’s practical benefits will drive adoption. Music Protocol aims to be a leader in this space by providing a valuable, easy-to-use platform for the music industry.

– Where do you see Music Protocol in the next few years?

Sergio Mottola: In the next few years, I see Music Protocol setting a new standard for managing and monetising music. We aim to create a more transparent, efficient, and equitable system that benefits all stakeholders. Our goal is to become the go-to platform or infrastructure for the tokenisation of music assets, driving innovation and growth in the industry. With the support of our partners and the Web3 Music Association, we can achieve this vision and make a lasting impact on the industry.

– Thank you for sharing your insights, Sergio. We look forward to seeing the continued success of Music Protocol.

Sergio Mottola: Thank you for having me. It’s been a pleasure discussing our journey and vision with you.