Nigel Eccles and Rob Jones, co-founders of Vault previously put together a little project known as FanDuel, so he knows something about building disruptive technology. He left at the end of 2017 to build what became Vault, a mechanism to connect with fans and later to monetize them. Vault is built around music and art, using the old-world idea of a key protected locked safe and updating it into both online connectivity and crypto space.
The company was formed in 2018 and has raised $9 million in part because of Nigel and Rob’s prior success. They have a 50-person development team based in the UK, working to build the tools which power Vault. They chose the Solana
block chain because it is affordable, scalable and much less energy consuming than working on Ether
Ultimately, everything Web 3 has to do with community, and Vault has an interesting play. The current model of selling art, music or NFTs gives ownership but not exclusivity. The items are available online for anyone to see or enjoy. Vault builds a paywall, in that the items contained in the vault, like the items contained in a safe deposit box, can only be accessed by the key holder(s). That is the intention of the management team, and Vault’s differentiating factor.
Exclusivity is always a good marketing strategy. Vault’s proposition is that there is something contained within the Vault you purchase which is only accessible by key holders. Each Vault is unique, and the concept is that your key gives you access to whatever it contains. Currently, the key unlocks a single vault which contains a specific piece of art, or music. Therefore, the keys are fungible.
However, this is not an evergreen replenishing content set. It’s what was there is what is there. New content will go into a subsequent vault which requires acquiring that key too. It’s a new spin on if you want to have the new recording you must buy it. The old record remains exactly as it was when pressed.
When building a relationship with fans, it’s important to know how to sort them. There are incidental fans, casual fans and those who feel a deeper connection to the artist and the work. These “true” fans tend to collect both the artist’s output and the merchandise which signifies to others that they are in tune with the art. This is true whether it’s a Grateful Dead skull T-shirt or a limited release pressing in yellow vinyl. With both art and music creating more digital output, there is a need for new ways to badge ownership of what otherwise lives in the cloud.
This is where the key aspect of Vault becomes intriguing. There have long been private clubs which admitted only those who belonged. However, it was the Playboy Club, with its vaunted key which caught the public’s imagination. Certainly, the intersection of exclusivity and sensuality was critical to driving attention, but do not discount the use of a key as a marker of membership.
The Vault key has similar properties. It unlocks whatever the vault contains, and only the key holders have access. In this new digital world, the key can be purchased or sold across the internet. These keys have some crypto properties in that they are government by smart contracts which remit 8% of the sale price back to the artist whose material is contained within the vault.
Vault’s first artist is Thomas Pipolo “Pip” who created a vault into which he put his eight song EP along with a music video and some “explainer” videos about his songs. Pip understands the value of proposition of getting superfans to buy items which puts money into the artists’ pockets rather than just letting streaming platforms build their base on top of the music for which they pay essentially nothing.
Pip’s Vault is only accessible by 500 keys, which were selling at the rate of 50-75 weekly. Pip believes that major label artists might make better returns by doing a limited release in which keys are sold to a vault containing a new release rather than sharing the revenue with labels and covering the expenses of distribution.
Vault may very well be a mash-up of the fan club model plus streaming of material to which few have access. For the artists, it allows them the ability to understand their direct fan base and design both art and ancillary products to best serve them. It’s more targeted than social media because those algorithms require constant drops of songs, videos, and social media content.
My conversation with Nigel and Pip was enlightening. It’s below in both video and audio podcast format.
What the Vault team is doing in the space now will create leverage in the future because they will be able to barter services. It’s hard these days to building something which consumers will share for. Vault’s nod to the idea of ownership in crypto space drives interest and the exclusivity of the product only accessible to key holders makes it sticky.
Pip says lots of artists are coming to him asking about Vault. They have big record deals, are earning a living and still curious about Vault. That’s indicative of supply. Demand is yet to be seen, but then again, the adaptation of FanDuel was quicker than anyone thought, so the track record is in place.
Vault’s underlying premise aligns the financial interests of creators and fans. The fungibility of the keys to specific vaults and the ability to buy or sell them freely makes the economic proposition attractive both for collectors who can monetize their collection at any time, but also for creators who share in the proceeds of each sale. That sort of a mutually beneficial ecosystem tends to survive and prosper. Who knows, we may just find that in both art and music there is a repository of value. It may no longer be at the end of the rainbow. Instead, it now lies accessible to those who hold the key to a Vault.