The Last Club Standing | Rafael Katigbak and Malcolm Levy - RefractionDAO

Hey, welcome back folks. Uh, seated behind me are uh Raph Kadikbach and uh Malcolm Levy from Refraction with their fireside chat. Uh, the last club.

Last club standing.

The last club standing. That's what I thought. That's right. why independent venues are dying and how we can help.

Mhm.

All right. So, yeah, uh the this conversation might not sound like it has anything to do with crypto, but you got to bear with us because there is a tie-in. So, uh yeah, let's let's get going. I think the main thing we want to go over today is that independent venues are closing at an alarming rate, which means the rooms where every major artist got their start uh and where scenes are born and you know musicians and icons are made are shutting down. Uh and this is this is a big issue and we want to look into what's going on and how crypto can help.

And maybe Malcolm Levy, who is with us today, can talk a little bit about what we're building with Refraction. Um, but first, maybe I want to introduce you. Uh, I want you to um maybe talk a little bit about your years in the space because you're coming from it not as an outsider. You're coming at it as a club owner. You're coming at us as a curator.

Uh, you know, you've you've made festivals before. And I'd love for you to talk about what you're seeing in the space and how that's kind of and how it's sort of um instigated your desire to start refraction.

Yeah.

When what's going on? Yeah,

absolutely. My entire career from high school into college was DJing, throwing parties and events. And from there, starting doing raves, um, building independent venues, going all the way to curating the Olympics, building clubs, it's all been really focused on independent culture. And what we've seen over that time is that a lot of the people that we've come up with have been going through huge shifts in the way that they're able to either sustain or they actually like don't exist anymore. And when we started refraction, which was in 2020, it really came out of that need to start something new, to create a new creative ecology, to create a new space for people to really get involved that were the promoters, the artists, the venues, all of those things all as one.

And so when we did it, what we found was there was a huge response from all of these communities globally. a lot of the similar ones that you know I'd worked in a very ad hoc basis over the years before that. And so once we started refraction it being a DAO on chain all of these different people who really had nothing to do with the blockchain before that really came on and actually became involved in a lot of different ways we hadn't seen before. And I think that's a really good place to start and why this topic and its involvement in the blockchain becomes so important from there. And I think it's important to also set the stage around getting into why clubs are important to uh to sort of save really, right?

If you Well, I'm just going to trying to get through this. This does Oh, there we go. Hey. Okay. Um, so I I think setting the stage around why clubs are important.

Um, I wanted to start with an anecdote or a story I heard recently from from Charlie XEX who talked about at 14 or 15 she was discovered on MySpace and she was invited to play her music at raves and she asked her mother to drive her there and her mother would wait in the car until 5 in the morning. But for her, it was a space to be free, to try different tracks, to see how people reacted, to be inspired by the environment, by the fashion, by the energy. And I think for her and for a lot of artists out there, um, these clubs are these cultural incubators, right? These spaces that are safe spaces to kind of create new movements and and new sounds and and new explorations. Tell me a little bit about, you know, you own a club in Toronto.

What are you seeing in the space? Why why are clubs important and why should we spend so much time? Uh

yeah, absolutely. I mean, clubs are important, independent clubs in a very similar way to a space like this is. It's where people build.

It's where culture is born. It's where incubation happens. It's where interesting ideas come together. It's where people in today's world that have met online get to actually meet IRL.

Yeah. There's something different about being in a physical space with someone.

Absolutely. And why they're so important, I think, is because the clubs, the spaces, the bars are the places where basically every genre of music and also even art and culture are formed.

You know, whether it's anything from electronic music to hip-hop to punk to pop music. A lot of it at a certain level happens with these interactions and these performances and these really interesting ways that people come together within these different clubs globally and it's it becomes the foundational surface for everything that comes after right

for culture as a whole.

Right. So the risk here is, you know, as these clubs close, we're not just losing these sort of entertainment infrastructure, it's cultural infrastructure that's at risk here, right?

Absolutely. It's that cultural infrastructure that becomes wildly at risk, right?

Because without it, you lose the breeding ground of how everything happens. You

It's like where would we be? Where would punk be without CBGBs in New York, for example?

Exactly.

Yeah. Um let's talk a little bit about the you know what's at risk here. How how how what's the scale of this crisis? How bad is it? So if we think about not just losing essential cultural infrastructure, there's a financial aspect to it as well, right?

So you know nighttime economy is a three to four trillion dollar global economy, right? And that's almost like 3% of the global GDP. Uh but at the same time in the UK clubs are closed. A club closes every two weeks, right? Right.

So it's this economy is kind of weird. So maybe talk a little bit about you know what's going on there. What are we seeing like are you profits up or profits profits are down costs are going up. Maybe talk a little bit about as a club owner you're seeing this yourself.

Sure. And yeah, as a club owner and you know, all the different venues that are part of Refraction globally, um, and all the different places where we have done shows, we've seen actually a couple of them closed in the time that we've existed as a DAO. Um, and in each of those cases, it's always basically the same story. You have a space that costs more money because it's an area that becomes quite cultural and then therefore gentrified. Um, the affordability of artists goes up.

You have larger corporations, specifically Live Nation, that are doing whatever they can to control the monopoly of artists in the world right now. So, they'll just pay more money to get a specific artist so that they have them in that specific area. And there's a number of reasons for that. But what's happening is a lot of the independent venues, they're not seeing ways that they can get revenue that some of the larger corporations are. And through that, they're running into this situation where they it's very hard to survive.

Also, people drink less now. There's an affordability issue. You have all of these things kind of playing out into kind of a perfect storm around these spaces.

Yeah, I think that's that's a really good point. I think on top of I'm glad you mentioned ticket master because on top of this impossible economics, there's also what we're calling the extraction problem. Do you want to talk a little bit about where that money goes? And

for sure. So, if you're a venue and you're selling your tickets, almost all the time, all of the costs for the ticket servicing is going to either a ticket master or one of these major companies. It's very rare for you to see any of that revenue themselves. But if you put yourself against something like Live Nation, and this is where the complexity and why the whole monopoly um situation happened in the US is like what ends up happening is that Live Nation doesn't even care about making money on the show from the actual artist and tickets because the ticket services, the money at the bar, all these other things end up just making more money for them,

right? So they're out bidding the in the sort of independent venues for these artists because they'll take a loss so that they can make the money back on the ticket service fees.

Exactly. And then they'll buy out venues at the same time.

Right. And speaking of buying out venues, I I think Ticket Master also has over 400 venues that they actually own. Right.

Yeah. Live Nation has over 400 venues, which mean all of those are ticket master venues,

right? So all of a sudden you see a situation where that consolidation means it's like incredibly hard for independent culture to happen. And because Live Nation is a multinational corporation, their focus is in no way on the creativity. It's about the bottom line.

Right?

You know, I've had many conversations with people in Live Nation where they very of matter of fact said like it's not about curation or programming. It's very much about just the bottom line. They don't really even care who they're booking as long as it sells out. It's like algorithmic in the almost most dangerous way where they're programming the artists that rise. Yeah.

through just numbers and

absolutely it's the algorithmic um nature to culture today playing out in ways that are very very very

very very very real and very very scary in terms of like how culture has been built over the last you know hundreds and hundreds of years

right and there was that interesting ane anecdote I read about I think in 2020 ticketmaster uh did some research around bots and uh uh bot reselling Yeah.

And they had the opportunity to stop it, but they realized that if they stopped bot reselling, that would cost them $220 million annually in revenue. So, they had the opportunity to actually fix it, but they just were like, "No, we we we choose profits over over people really at the end of the day, which is

yeah, par for the course.

Pretty pretty sketch." Um, so, okay, let's get into the sort of blockchain side of it. So we've got impossible economics plus extraction. Tell us about the alternative that we're building with IRL.

Absolutely. So with refraction over the last year or two as we started to look at solutions over the events we were doing around the world and when I say around the world I mean basically in you know every continent all these different clubs all these different promoters all these different artists everyone came back with the same problem which is like how can we have a different way of doing this? And what became really clear is if we took the idea and understanding of how this model was working but instead of that model i.e. the ticket fees i.

e. some of these other areas of routing or supporting artists going to you know upward it could go collectively to you know a DAO into you know the tokenization of this idea that all of a sudden what you had was a situation where you could create a new creative economy and that's really what we're building with IRL as a whole. It's looking at the rails, the system of payments. It's looking at ticketing. It's looking at the artists.

It's looking at the promotion of that and how that can really work together in concert with sponsors, in concert with venues. And most of all, in concerts with people who can support that,

i.e. the consumers, etc. And what we found through a lot of research and discussions is that's what everyone really wants at this point,

right? And it's kind of a perfect storm right now because crypto has gone a little bit more mainstream. you know, there's the squeezing of the of the venues, uh, and then obviously there's a stable coin conversation, but maybe take us through, um, exactly what the, you know, process, what does it look like as someone who wants to interact with IRL? What's that experience?

Absolutely. So, I mean, the experience is really something where someone can come in and become involved by um, supporting a show. We've started the IRL tours globally in terms of um, our partnership. So we really started looking at how one could support or how one can get involved by actually building our own stack. When we were starting IRL the one thing we knew is we needed to create a product and that that product could inherently do all the things that we saw working for everyone else in a collective manner.

Right. So discovery transactions the way that people participate and how they earn through the participation. Exactly.

Tell me about the discovery side and then let's talk through transactions and and the

Absolutely. So on the discovery side, we have all of these incredible venues, artists, promoters, and community members globally. So what we've been doing is starting to build out city guides that are really promoting and talking about these different independent venues around the world, these different spaces. So it's almost like creating an alternative narrative,

right? And I love the idea of humans being behind it, right? This whole thing is sort of like anti-algorithmic in a lot of ways.

Go ahead.

And then Yeah. And by humans being involved in it and really being behind it, what we're able to do is now start to take that and start to look at having different IRL checkpoints and ostensibly places for support for participation around the world. These different venues, if you come to ESP tonight, we'll have one of our IRL checkpoints.

Right. So people are going on discovering new venues, getting recommendations, they're checking in, and they're earning points.

Exactly. And then in the long term through what we're calling IRL Rails, it's really looking at um a combination of using Privy, Bridge, Stripe, and Dice. DICE, which is our ticketing partner, all basically in one collective group together where we're able to actually build our own onchain rails that will then give that funds back to the venue, back to the artists, or into the actual treasury of IRL. So it's closing the loop a little bit and keeping it more within the ecosystem instead of being extracted out.

Exactly.

Yeah, that makes a lot of sense.

Um,

so I only got a couple minutes left. Do you want to talk a little bit about what's live now? What people can do uh maybe where they can catch us tonight if you want?

Yeah, absolutely. So um we launched IRL the DAP we're it's in soft launch right now at IRL.energy energy and you know it has all the different things that we've been talking about today. Um we started the IRL tour at the end of last year. We were looking for about 15 partners globally to launch it.

We ended up getting over 80 applications globally. About 35 were shortlisted. We ended up going with more than we thought and that tour is happening right now. And what's really interesting is that's really the thesis of what our hypothesis has been which we have all of these different venues really getting involved globally in this different in these different ways and really starting to take that on themselves.

Right.

So clearly it's working in the sense that when you're speaking with people outside of the crypto space the promoters the people that on the ground in these cities you said 30 cities around the world one happened in Mexico and one in London recently.

Yeah. They're really excited about it because in your conversations they're like, "We need this. We want to integrate this." They're seeing there's

absolutely the most interesting thing and we've had probably I'm going to say 50 conversations with different promoters, venues, advisory committee members, all these different people involved in all of them are back to us our hypothesis, right?

And it's very interesting to see that because it it means we really know we're on to something here. And as it starts to go out, they're able to add to that, lend other ideas and everything else in and around it.

Amazing. So, we got 40. We're nailing it here. 40 seconds. Even we got like a three minutes cut.

We're still hitting it. Um, how do people get involved? What are we looking for?

Absolutely. To get involved if you're a venue globally, if you're a promoter globally, if you're an artist, um, you can just email us, be in touch, join IRL, um, info@irirl.energy, energy info@refrractionfestestival.com any of those things or just hit us up on Twitter, Telegram, etc. We're there for it.

We're ready to, you know, ready to for more and more people to get involved at this point.

Also, builders and partners as well. Is that something that

Absolutely. We have a whole builders and partners program and if you go to.energy, energy. All the info is there to join and you can hit up partnerships at um refractionfestestival.com around anything moving forward and to join or just like hit us up today.

We're 3 seconds over. I want to make sure we give time to our friend over here Greg Breast up next represent. Um maybe shout out where we're going to be tonight if people want to come and see us.

We're throwing an event at ESB with um Bridge and Privy and a few other partners. Um that's really going to be a lot of fun. and it's the most beautiful, coolest listening bar in the city. Um, you playing who's one of the most incredible DJs right now and producers in the world. Um, love to see you all out there and thank you very much.

Thanks everybody.