Audius

The Decentralized Autonomous “1,000 True Fan” Organisation

Posted on June 1, 2021 | by Bas Grasmayer | 1 Comment

Decentralized ownership registries helped enable digital art’s NFT boom of the past year. Next, blockchain, the distributed ledger technology, will underpin fanbases and the way artists build careers, teams, and engage with industry infrastructure.

Can you put a fanbase on the blockchain? Here’s what it could look like.

Decentralized Autonomous Organisations (DAOs)

If you spend some time in Web3 circles, you will encounter the term DAO. It refers to organisations that utilize blockchains’ distributed nature and (often) smart contract functionality in order to govern themselves.

These organisations are grassroots, meaning that there’s no central leadership and the members of the organisation decide what things they want to incentivize, and what rules they want to create. They allow people to pool funds, govern those funds and use them to coordinate or incentivize communal efforts and contributions.

At this point there are way too many DAOs to give a comprehensive overview and they come in many forms. For example, Stake Capital’s StakeDAO allows its members to earn stakeholder revenue share for their participation, for instance by supporting the Discovery and Creator nodes Stake Capital runs for the Audius network, a decentralized music streaming platform. Another well-known DAO, with the stated aim to push culture forward, is Friends With Benefits ($FWB) which requires new members to invest into the DAO by buying membership tokens, so that the community is invested in itself (you can read more about how they govern these funds here and what types of things you might expect in the community here). MetaCartel is a community of people that funds “post-hackathon” projects through grants. Decentraland, pictured above, is a game akin to Roblox and Second Life, but is governed by a DAO.

The Mint Fund, which was founded to fund underrepresented creators’ NFT minting costs, aims to become an “artist-owned curation DAO”. Mat Dryhurst (@) suggested a decentralised structure for SoundCloud in 2017, when people feared the company was running out of time (and cash) as it let go a large chunk of its staff. Back then the concept was novel, but it’s quickly becoming mainstream.

There are even tools like Aragon, Colony, and DAOhaus that make it relatively easy to set up a DAO in which the community participates in the ownership and governance of what’s created through the sum of their work, contribution, and participation.

The Decentralized Autonomous Artist

Not everyone’s music will drive millions of streams, not everyone is able to tour constantly, not everyone will go viral… but the one strategy that I feel almost any artist can apply is that of building a community of fans that can sustain you (sometimes referred to as “1,000 true fans”). There’s benefits to thinking small.

How can a fan community contribute to an artist’s success? Well, it depends on the artist, but they can financially sustain the artist through various types of patronage, they can amplify what an artist is doing by increasing their reach and leveraging network effects, but there are also other types of contributions that may be framed as collaborations, fan art, or other. In fact, when the community includes the artist and ‘artist team’ (ie. the business roles surrounding an artist), you can disintegrate some of those roles and place the associated activities inside the community through incentive structures.

What if the BTS Army was a DAO allowing people to either purchase or earn $BTS tokens in order to unlock various types of experiences and opportunities that are completely fan-organised? BTS wouldn’t even have to play a role in the DAO, though if what the DAO is doing is sufficiently valuable (which it would be), it may decide to let people trade $BTS tokens for tickets to concerts, livestreams, merch, or NFT collectibles. BTS can then choose to sell those tokens for fiat money (e.g. dollars or won) and cash out or retain $BTS and take a more active role in the DAO (token holders are often rewarded with increased influence in the governance of the DAO, corresponding to the amount of tokens they hold).

Since it can all be logged to a blockchain, much of this experience becomes portable beyond any specific platform, allowing the fanbase to organise itself wherever it prefers. This way experiences can travel beyond the walled gardens of Facebook, Apple, or virtual platforms and into the so-called metaverse in which the DAO and its members own their data and collect the value from it. Work is also being done on making various blockchains more interoperable, so things will be less locked into blockchain ecosystems than they are now.

Instead of communicating with an audience as followers on a social media platform owned by others, you can involve them directly in the organisation of your fan experience in a transparent, open, grassroots way through DAOs. The bonus: community ownership. We’ve seen countless artists open up Discords and other types of communities next to their social media presence – what we’ll see next is the Web3 version of this: decentralized autonomous fan organisations.

Help me take my writing to the Web3 & support me in Mirror‘s $WRITE race on Wednesdays. Vote here.

Streaming services: it’s time for Two-Factor Authentication

Posted on April 20, 2021 | by Bas Grasmayer

Scams, fraud, bots and theft: the ugly side of streaming provides a stark contrast to that beautiful feeling of having the world’s recorded music at your fingertips.

What is Two-Factor Authentication (2FA)

You are already using 2FA. Certain accounts, like Google, Facebook, or Apple, require multiple forms of authentication in order to sign in from a new device. This often works by verifying it’s you from another device, or by entering a code sent to your phone number, email address, or generated in an authenticator app.

It adds a layer of security to accounts that makes it hard to get in with just the username and password.

Why don’t streaming services use 2FA?

Popular streaming services like Spotify and Netflix famously don’t use 2FA, although the latter has recently started running tests with it, presumably to tackle account sharing. The reason for not implementing 2FA? Likely because it doesn’t help growth and in fact may hamper conversion rates.

Jorge Castro on developer community dev.to sums it up well through this fictional conversation:

Developers: We want to implement 2FA in our platform.
Netflix executes: Ok, and how much will it cost us?
Developers: Around two months.
Netflix executives: Ok, and it will increase the number of viewers?
Developers: Well, not really. It is about security.
Netflix executives: So, it will not increase the number of viewers but it could be a burden for some customers and it could decrease the number of viewers.
Developers: Yes, but it could be optional.
Netflix executives: So optional, an option that it plays against the number of viewers and it will cost us time (and money). Sorry but no.
Developers: But the security.
Netflix executives: We already invested in our security. If our customers have trouble then we could reset its password. It’s their responsibility, not ours.

However building in a little more friction could be beneficial to all… and tackle certain types of fraud more efficiently than a switch to user-centric streaming payments might.

Black market for streaming service accounts

For years, there has been a thriving market for streaming service accounts, with Spotify accounts selling for under a dollar. Many though not all of these are hacked. It’s so common that people commenting on their hackers’ music tastes has become somewhat of a meme and a quick search on Twitter pulls up countless examples.

Vietnamese blogs speculate that black market accounts are what led to Spotify and Netflix halting their free trial offers in the country last year.

This is not an issue that is exclusive to Spotify and Netflix, but there’s a high availability of examples since they are two of the most popular entertainment services without 2FA.

Fake plays, scams, and fraud

Just like it’s possible to buy ‘fake followers’ on social media, it’s possible to buy fake plays for streaming services. Jacking up the numbers can help to game the recommendation algorithm and build fake legitimacy for those looking closely at big numbers (but perhaps not closely enough).

Who cares if that is what someone wants to do? Well, everyone should, because it eats away at the pool of money distributed to all artists. Hackers have been gaming this system openly since at least 2013 in order to generate revenue.

An article by William Bedell from 2015 explains how he was able to do the same. At the time, not only did Spotify not use 2FA:

“There wasn’t even a CAPTCHA or email verification when creating accounts.”

The lack of better security leads to these types of fraud having to be traced & fixed retroactively, which often leads to streaming services taking music with fake plays down. That sounds good, but there are two issues: 1) we don’t know what percentage of fraud goes undetected, and 2) this opens up an attack vector (want your competitor’s music taken down? Just boost it with fake streams).

Audius (primer article), a new streaming platform and protocol that awards people tokens (called $AUDIO) based on their participation, is also running into this issue. Bots are used on the platform to game the system and get music into the charts. This messes with the platform’s weekly reward system, as WeirdCityRecords on Reddit points out:

“Curators have been robbed by bot users almost every week since the rewards inception (not only in terms of $audio but engagement being buried below bots), and now with a song being clearly botted to #1, it seems like this week 1 artist or possibly more will be deprived as well.”

The track accused of being ‘botted’ to the top outperforms the #2 by over 14 times, despite the artist and account being new to the platform and seemingly not having a significant presence on other music platforms.

Two-factor authentication would make it a lot harder to create loads of accounts like in the examples above, especially if you limit to 1 account per phone number.

Report fraud

Recently, I became familiar with another scam. Unfortunately that was due to falling victim to it on Spotify, though it may also exist on other platforms.

Botnets get employed to report people’s playlists for inappropriate content. This results in the playlist title and description being taken down. Bada-bing bada-boom: it is now easier to be the #1 search result for those same terms on Spotify.

Hi Bas! Your playlists are targets of botted attacks that report your playlists with false motives to keep them from appearing in search results. These atracks are going on for many months now and Spotify still has not implemented a solution.
— Crow Man’s Sky (@Crow74) April 9, 2021

As soon as I reported the erroneous report to Spotify and had them restore the playlist title and description, the botnet took it down again. This repeated half a dozen times over 2 weeks with my playlist existing without a title or description for the majority of the time.

I’m not alone in this and have found various playlists that also seem to be suffering from this issue (click here for an example if you’re curious about Romanian Manele music and here for GTA’s excellent soundtrack). This thread in Spotify’s support forums has other users reporting the issue.

The attack seems to have ended, but I almost gave up restoring my playlist every time it got taken down (I did consider writing a script that would auto-reply to Spotify’s takedown emails, though).

Since playlists are user-generated content, Spotify needs some type of system to deal with reports and make sure content that goes against the terms & conditions is taken down. After the 5th time my playlist got taken down and I asked if they could protect my playlist from the next auto-takedown, I got this answer:

“All user-created content can be reported, and while it may be possible that a report is invalid, all such reports need to go through our official report channel so we can handle them properly.”

So that’s a no. This means that anyone building playlists on Spotify with an unverified account can fall victim to this. Sure, the reporting account may get banned, but if it’s a botnet targeting you that doesn’t matter. That’s problematic, because unlike my hobbyist playlist with 100 followers, there are curation brands and artists with playlists that depend heavily on Spotify. They’re all exposed to this type of attack that seems to rely on either hacked accounts or easily-created free accounts.

Investment without security

People around the world are putting hours of effort into their streaming accounts: building playlists, followings, brands and in some cases companies using their presence. They’re exposed to insecurity.

Even accounts on platforms with better security get hacked, e.g. to misuse the trust someone has built up and run a cryptocurrency scam on followers (as fellow music-tech writer Cherie Hu recently became a victim of on Twitter, which besides Audius and the report fraud above was my third prompt for writing this piece).

Even if a streaming service can reinstate an account after a hack: the hack can damage your brand, e.g. if the hacker changes playlist titles and imagery to something offensive or scams, or just makes it impossible for you to keep running your playlist brand due to repeated reporting. If you enjoy services’ algorithmic recommendations, a hacker’s temporary account takeover can mess that up for you also.

Two-factor authentication is a basic standard for security. Maybe it’s time for streaming services to give it some priority and prevent fraud, scams, and theft.

Web3, the internet of value, and concerning barriers to participation

Posted on March 30, 2021 | by Bas Grasmayer

The current NFT furor is partially fueled by early crypto buyers converting virtual money into something that might retain value better: art. This has been the case pre-Bitcoin, as this BBC article from 2017 about traditional art investments points out well:

“As art has no correlation to the stock market, it means paintings can go up in value even when the market crashes, making it a good diversification for an investment portfolio.”

One of the reasons why people are excited about blockchain is the fact that it allows for further decentralization of the web. Whereas the ‘web 2.0’ focused on feeds, social data, APIs and ultimately led to the creation of mega-platforms, discussions around the current ‘Web3’ tend to focus more on protocols, not platforms. That’s exciting, because we’re discussing the building blocks of the next generation of connected applications and their infrastructure.

One of the concepts the Web3 enables is the ‘internet of value‘: an internet where anything of value, from money to intellectual property, can travel as fast as information itself. Currently, transactions of money often flow slowly since they move through centralized bodies (hello, last year’s royalties) and that’s exactly where technologists hope to reduce friction.

This is also why there’s so much talk about trust. Systems, and the networks that support them, need to carry a certain legitimacy for people to adopt them.

One of the most exciting developments in the internet of value, and one that may shape fan culture for the next generation, is that of social tokens. Oversimplifcation: a creator of music sells ‘tokens’ to a community of fans, in order for those fans to unlock perks. These tokens become more valuable as the creator becomes more successful. If you thought BTS fans were everywhere already: just imagine a scenario where they’re holding tokens and the more popular BTS get, the more valuable their tokens get.¹

Here’s my concern, though:

Many of these communities (and economies) are currently designed in a way that you have to buy yourself in by converting cryptocurrency into tokens or earn your way in by creating value for the wider network. The latter phenomenon can be seen in ad-free free-to-play games like those of Supercell, where the majority of users create valuable context for a small minority of users to spend their money. After decades of creating value on other people’s platforms and then having to pay to reach your own audience (e.g. Facebook), the token model is a very welcome change – but how do we make it inclusive?

Not everyone is able to buy themselves in early. While it’s true that you don’t always have to buy yourself in, e.g. in the case of Audius airdropping tokens to its users, the amount of effort required to earn your way in later on may increase with the value of tokens. Yet it’s not exactly about effort.

The goal is typically to make sure that those that provide an adequate amount of value to the network or platform get a token, so they can share in the overall value of the network. Kind of like getting a share in Facebook for posting cat pictures that get tons of likes (or your own music). However it’s not just a share: tokens often represent access. Access to communities, access to voting on the future of the network, access to features or perks, etc.

Tracking value

For the sake of inclusivity, it’s crucial that such systems accurately track and compensate value creation. But value is abstract, as anyone familiar with discussions about the value and price of music will know. Unfortunately, many systems are set up with the assumption that all value will be fairly compensated. While I admire the idealism and drive behind them, it does mean that people will be left out – either because they can’t afford to buy themselves in, or because they don’t get awarded a token for the value they create. For example, the person posting cat photos in the above example might get a token, but the people who took those photos don’t get anything.

The NFT market currently also has this problem, with minting fees being a barrier to entry to many artists who can’t afford it. This is an issue that’s being addressed, but for the time being it can be prohibitively expensive to mint NFTs on some of the more popular blockchains like Ethereum. Meanwhile, the Mint Fund is a great example of an initiative that helps artists fund their NFTs, placing emphasis on the underrepresented.

Without taking these exclusionary issues into consideration when designing systems, we risk the next generation of ~~internet~~ culture to be one of currency and speculation. An internet where people with less money (fiat or crypto) get locked out or have less power over the platforms they use, despite perhaps creating more value that can’t be translated into currency.

That’s possibly still a step up from the internet of extractive megaplatforms like Facebook. Plus, if a platform or community decides that’s actually the way they want to work, that’s fine. However, there are a lot of instances where this is not an explicit decision, but rather something that’s believed will be resolved in the future through improvements in technology.

We messed this up with the web 2.0, where the promise was an interoperable internet, but we ended up with an internet where a few platforms extract value from everyone at the cost of privacy and the value of content. 20 years later, we have another shot at this. Let’s get it right this time. From the start.

Photo by Max Böhme on Unsplash.

^{1 It’s not always a good idea to create extrinsic motivators for behaviour that is already the result of strong intrinsic motivation.}

Music streaming as a protocol: why I was wrong about Audius

Posted on December 1, 2020 | by Bas Grasmayer

Last week I wrote about blockchain-based streaming platform Audius in this newsletter. I criticized the strategy of ‘becoming the anti-SoundCloud’ and its plans for dealing with takedowns while recognizing the exciting potential of a more complex music economy. The next day Holly Herndon and Mat Dryhurst released a new Interdependence podcast episode where they go in conversation with the Audius founders. It made me completely change my mind about the platform.

Don’t be too quick to dismiss Audius: separating the content & functionality layer is one of the keys to unlocking a new music economy.

Protocol or platform, not service

Audius should be thought of as a decentralized platform rather than as a startup or streaming service. While there is a team behind the project, it seems they mostly work to bring into existence the components outlined in their whitepaper (PDF). These aspects are open-sourced and governed by the user community of the protocol.

While a service’s success is dependent on whatever interface is slapped on to the technical infrastructure, a protocol is less dependent on any one interface. For example, a company poorly redesigning an email client isn’t going to kill email, but it may kill the app or the company behind it. The most exciting aspect of Audius is not the current interface; it’s that they’re trying to create a protocol for digital music that could have any number of interfaces plug into it.

Clipped from the Audius whitepaper linked above.

One of the most important elements of that protocol is a concept I was previously very skeptical about.

Artist-determined stream pricing

Audius wants to let artists set a per-stream rate for their tracks, so if someone wants $1 / stream, they could do so. If they want something close to whatever are the current average Spotify or Apple rates, that’s possible too.

Why I was skeptical about per-stream rates is that it creates a form of metered streaming: load up your wallet and watch the currency tick away as you listen to music. If you’re creating a SoundCloud lookalike (or: ‘like Soundcloud, but better’) to fit into the current landscape of streaming services, then metered streaming is a constraint that will inevitably scare users off. It won’t just scare people off in the sense that they won’t want to load up their wallet if they don’t know what they’re going to listen to yet, but more importantly it will have people make economical decisions about established micro-behaviours around music listening. I think in the end, that would be stressful and exhausting and users would stop coming back. However I’ve come to realize I’m wrong about this.

Differently priced music does not have to live in the same streaming interface. Lower-priced music might be what fuels background-listening type radio apps. Higher-priced music may be at the center of interfaces that connect you to new releases by your favourite artists. There are some pieces of classical music that I listen to maybe once a year, that I value more than some music that I listen to weekly. Per-stream pricing could help make up for the fact that that classical piece gets only 1 yearly stream from me versus 52 streams for a random track — whose creator I don’t even know — in a playlist I use to focus on writing.

What Mat and Holly communicate very well in their podcast with Audius is that ‘music’ is not one thing, yet the online landscape doesn’t reflect that fact well. To some degree, the compensation model embedded in the licenses dictates a lot of the user experience. In the past I’ve led teams at two music streaming services wanting to do things differently and while you can go quite a long way, in the end you have to exist in a landscape dictated by just one economic game: maximization of streams.

A change to that landscape would be refreshing and a welcome way to generate more revenue streams.

Content / interface-layer challenges

There is still a whole range of challenges to deal with in such a system. Who sets the per-stream price for example? Is it whoever has the highest degree of ownership of the sound recording? What if they change the price while it’s live and because of that the track is no longer playable through certain interfaces? Or if it all lives in the same interface: do you interrupt playback to give people a warning before an expensive track starts playing? What if their phone is in their pocket? These are just some of the design problems developers would have to think about in a decentralized system with such principles.

It’s possible that the decentralization of the functionality layer doesn’t go as far as I imagine. In any case, Audius or the apps using the protocol will have to deal with the existing national and international copyright regimes which inevitably dictate some of the economics.

In the end, it’s not about Audius versus SoundCloud; it’s about creating a new layer for music streaming. Imagining music streaming as a protocol, rather than a competitive space of services, is refreshing though. It allows for a rethink of the principles underpinning the digital music landscape without going through the arduous mental exercise of imagining small iterative improvements to solve streaming’s flaws.

Why Audius needs to be more like Roblox to succeed in creating a music economy

Posted on November 24, 2020 | by Bas Grasmayer

Recently blockchain-based music streaming service Audius distributed tokens to 10,000 of its top users, giving them ownership of the platform and rights to vote on its future plus make changes to its structure.

While its advisory board — which includes Twitch co-founder Justin Kan and EA Games co-founder Bing Gordon — is impressive (though all-male), I have my reservations about the platform. I’ll explain why in a moment.

Despite my reservations, I do believe Audius is on to something. When it distributed the tokens, they didn’t all go to artists, but also fans. Music is in desperate need for a digital economy more complex than one-directionally spreading out subscription fees over stream counts.

The ‘anti-SoundCloud’

From the beginning, Audius set itself up as “like SoundCloud, but not SoundCloud.” There’s a real difficulty in positioning yourself that way. SoundCloud is a company with more than half a billion USD in funding to date. It has relations with most of the music business, technical integrations with all kinds of hardware & software, and has spent over a decade building up its community, team and infrastructure.

The standards for music streaming are incredibly high now compared to the landscape that the current incumbents started out in. While I definitely think SoundCloud and other music streaming services of that generation are leaving space for newcomers to claim, I think it’s important to focus on what in particular a newcomer can do better and excel in that. In terms of doing a particular thing better, I’d argue Instagram has become the anti-SoundCloud.

How do you deliver a good user experience and an audience to people? How do you get them to regularly visit your app / platform? How do you grow beyond the front of the adoption curve? All of these have answers, but how do you do that better than others? Setting yourself up as a one-size-fits-all service creates expectations you can’t fulfill.

Takedown issues

On to a more complicated matter. Audius, as a decentralized service, will pass takedown requests on to uploaders who will have to take action. If it can’t be resolved, it moves to an arbitration committee made up of Audius users:

“That group can vote on whether a track legally should be removed or its revenue reattributed, and both plaintiffs and committee members must put up a small financial stake they’ll lose if their claim is frivolous or they make erroneous decisions.”

I appreciate the idealism in letting its community resolve these issues. The financial stake part also makes sense, assuming the party issuing is on the platform, but it also reads like the type of maximalist thought usually associated with blockchain or “disruptive startup” culture. It assumes as a newcomer it can set a new status quo that everyone will have to interact with — even people who are not on the platform. In actuality, as a newcomer you’re an outlier and the type of strategy you have to employ is growth, so you can actually become the status quo.

What does not help growth is artists finding parts of their catalogue on the platform without uploading it themselves and then going through a tedious and risky process to right the wrong.

A more complex economy

Another company I had similar reservations about in terms of being able to stand out as a compelling streaming platform is Resonate, a community-owned cooperative. However what excites me about Audius and Resonate are their visions for a different music streaming economy. In particular, giving fans and artists equal participation in that economy.

Money in streaming flows in one direction and that’s away from fans. It feels like that’s the point, but it’s also a limitation. There’s a reductionist vision that music services are solely about listening to music. Yet what could be created by incentivizing platform participation? What if the $10/month subscription fee was more like an entrance ticket or season pass and there’s additional, optional value exchange happening on the platform, much like in video games?

Some users wouldn’t be able to afford a fee higher than that $10. As a matter of fact, I know music fans who only stream from free services. By participating in the platform’s economy they could still unlock perks they’re after. They could do so by creating value on the platform, e.g. by building experiences, creating fan art and other value for communities, or by participating in platform improvements like the cleaning of metadata or, I suppose, DMCA takedown arbitration.

This type of thing has been happening in games for years. A current prominent example being Roblox (est. 2004), which recently saw Lil Nas X perform in-game.

The starting point isn’t the economy though — it’s to envision what you want players to be able to do in the world created for them. From engagement flow the opportunities to shape an economy (another reason why I’m skeptical of consumer-facing startups whose value propositions focus on the economy more than the user experience). In order to create robust digital economies around music, the likely question to figure out is how to create a compelling platform for fan culture at large.

Then starting by focusing on a specific problem.