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What BITKRAFT’s recent investments suggest about music’s future and the metaverse

Posted on August 11, 2020 | by Bas Grasmayer

Forget the usual suspects: venture capital firm BITKRAFT is easily one of the most interesting funds to watch in the entertainment space. Since the start of June, they have participated in 5 funding rounds totalling over $44 million into companies pioneering possible futures for digital media.

With music mostly detached from its “real world” context of live gigs, it has become obvious that music’s virtual context of livestreams, virtual events, and online communities is set to shape tastes, genres and experiences. Professionals from across the industry, from labels to studios to artists, are increasingly involved in virtual aspects of our culture. Two recent examples:

Sony Music Entertainment is actively recruiting engineers and designers familiar with the Unreal 3D engine.
Entertainment management CAA recently signed its first avatar: Miquela.

So what do BITKRAFT’s recent investees enable? A look at 3.

Koji

Co-founded by Dmitry Shapiro, who previously founded Veoh and served as CTO of MySpace Music, Koji is a tool that makes it easy to remix posts for social media.

The posts are shareable and interactive, allowing people to remix them using content from various platforms, so Koji sees them more like “mini-apps“:

“If you’ve experienced WeChat Mini Programs, Kojis are the cross-platform, standards-based, modern versions of that.”

What appears to be the strategy, is for other platforms to allow these interactive forms of media inside of them, similar to how most social media platforms now have Giphy integrations to bring GIFs from the Giphy platform into your favourite social network.

So that sets it apart from other remix platforms, like TikTok or audiovisual mashup platform Coub which emphasise the on-platform experience. Unlike TikTok, Coub is not a walled garden, but most of the activity related to the platform seems to be happening in the garden regardless.

What does it mean for music?

Remix culture has gone through multiple iterations and isn’t done yet. Since the start of the digital era, we’ve seen these important steps for music’s remix culture:

Anyone with a computer being able to acquire (through piracy or a purchase) music production software at reasonable costs and distributing their creations through networks and filesharing apps. For example the rapper Benefit becoming an internet underground legend with a $5 mic and a $12 sound card.
As time went on, the above development spawned mash-up culture which moved from filesharing platforms over to the blogosphere.
SoundCloud emerged and made it even easier to follow and exchange with other producers around the world, spawning remix-heavy genre subcultures like Moombahton, ‘EDM Trap’, and ‘Cloudrap’.
Anyone with a mobile phone being able to produce, mix or remix media.
‘Remix’ becoming a default interaction through the dynamics of Snapchat, Instagram Stories, Musically and TikTok as people use face filters, music, and various imagery as overlays to interact with friends and connect to new people.

Koji’s bet seems to be that there’s room for remixable media inside these platforms – think embedding a TikTok post (content) into an Instagram Story (context), but then being able to change elements of the content independently from context.

If this sounds vague, go play around with Koji: open one and hit the remix button.

Short version: we’ll see remixable content appear in countless contexts and will be able to move that content from one context (e.g. Fortnite) to another (e.g. Instagram Stories) without having it attached to the context (e.g. a screenshot of something (content) inside Fortnite (context)).

This will allow for an integrated web where you can interact with media from very day-to-day layers (like photo-based social media) to layers further removed from the physical world (like virtual reality). Like that time Zuckerberg demoed Oculus VR and Priscilla Chan (in ‘the real world’) called him while he was plugged into VR (see the Mixed reality section).

Voicemod

Sticking to the theme of layers: Voicemod allows people to adjust their voice digitally in real-time. In a virtual environment, you can design your avatar however you wish, but unless you’re great at voice acting your voice will sound kind of ‘normal’.

In more every day terms: we’ve all seen Instagram and Snapchat filters that add dog features to friends’ faces — Voicemod makes the voice equivalent of that.

While their technology seems targeted towards demographics in immersive, fully virtual environments like online games or VR-environments, they also cater to YouTubers.

One of the things they’ll do with their investment is double down on mobile, for which they’ve already teamed up with T-Pain who’s well-known for his use of auto-tune.

What does it mean for music?

The first aspect to point out is that voice modification has become increasingly easy and cheap to achieve, even in real-time. The second aspect is that BITKRAFT and Voicemod see a future with a high adoption of voice modification and the avatarisation of voice.

We already have virtual pop stars, so the boundary between virtual and ‘real’ is blurring, especially now that we can simulate elements that up until now were artefacts of “the real world” like our voice. Whereas today’s virtual pop stars didn’t emerge from the virtual landscape, future music personalities could come from this landscape, including their pre-programmed voices. Consider an influencer who’s mostly known for their in-game personality; now what if that influencer becomes popular for their music?

It’s the next generation of digital native.

Playable Worlds

The first thing you need to know about this startup is that it’s founded by Raph Koster, who was the lead designer for Ultima Online (UO). UO was an incredibly influential MMORPG: massively multiplayer online roleplaying game. It was released in 1997 – years before Runescape and World of Warfcraft. And people are still playing it today, lauding its open world of worlds where gameplay is as much player-made as it is scripted.

The next thing you need to know is that Playable Worlds intend to accelerate the development of a concept called the metaverse. The metaverse is the idea of being able to plug into a virtual environment that connects all kinds of different virtual environments. Minecraft and Roblox are often mentioned as examples due to the ability for people to creatively craft various environments and objects. Fortnite also has characteristics of this, as beyond a gaming environment it now also contains an environment to hang out in and perhaps even enjoy a concert called Party Royale (pictured above).

Playable Worlds‘ first goal is to create a “cloud-native sandbox MMO” game, which sounds reminiscent of aforementioned Ultima Online. Sam Engelbardt, one of the company’s investors, says that “Koster’s vision and demonstrated ability to give players a compelling sandbox for the expression of their digital identities makes him exactly the sort of founder that he likes to back. Englebardt is backing companies that he believes will lay the foundation for the metaverse.”

What does it mean for music?

While Koji and Voicemod are tools that help people immerse inside and across “the metaverse”, Playable Worlds’ team is building out the technology to enable such a metaverse and then building a game with that technology.

Soon, our assumed digital identities will be as important as our given day-to-day identity – which is something that has actually already occurred for many people in the earlier days of the internet with its internet forums, chatrooms, and networks, before using your real name and identity were the status quo.

With that emerging landscape come new types of fan culture and many new possibilities to connect with people who may have a variety of identities across virtual environments. If that sounds niche: that’s how it starts. Ultima Online provided a stepping stone towards the landscape of Twitch, Fortnite, and other virtual experiences which the music industry is committing itself to now, 20 years later.

If this post feels overwhelming or just too “out there” and you’re curious about how music has already been impacted by gaming, I suggest reading my article Hidden in plain sight: a global underground dance music scene with millions of fans from 2016. It was a bit “out there” at that time too, but by now it’s obvious.

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How I got over a quarter million plays on my Soundcloud

Posted on November 25, 2017 | by Bas Grasmayer

Building up a following as a DJ in the social web’s early days: a how-to for time travellers. 💫

Back when I was in college, my friend and I would go to a lot of parties. We also used to rap in a band together. Up until then, I had always been writing a lot of lyrics and would visit every hiphop gig in my city. When there was nothing better on, we’d go to student parties in a local club that gathered around 800 people every week, and in between dancing and chatting, we’d be rapping our lyrics over the beats of popular songs.

Then one day we stumbled upon the drum ‘n bass scene (with regular parties in my hometown being hosted by the renowned Black Sun Empire). I always thought electronic music was not for me, but it changed the way I looked at electronic music. Instead of trying to make beats on FL Studio, I started playing around with making electronic music. Then, one day, I stumbled upon a simpler tool that allowed me to mix tracks together. It carried the tacky name Mixmeister, but it is still my all-time favourite tool for making mixes from the comfort of (what was then) my bedroom.

I still wish a company like Native Instruments or Ableton would buy this firm, and release a better and renewed version of their software that hasn’t worked on my Mac for years. But I digress.

Up until then, I had been writing lyrics. Lots of them. Daily. I was involved in the “textcee” scene, which is how people participated in online rap back when it was still a little tricky to record and upload tracks. I participated in battles, topical challenges, wrote about complex (and often silly) subject matter, and really got my creativity out — all in text format. It was easy to distribute, light-weight, and it had its communities and forums.

Pre-Soundcloud

For DJs, it was harder. Bandwidth was not great, and back in 2006 or so, when I started, there were no good online communities. There was no Soundcloud, there was no Mixcloud, and YouTube only allowed videos of up to 10 minutes. My tools of choice, for hosting DJ sets, were YouSendIt, uploaded.to and MegaUpload. They were iffy and you always had to monitor that your files were not taken down, but they would do.

I thought a lot about the format. I never mixed over 80 minutes, because I wanted to make sure that fans (if I had any, and it was hard to tell pre-Facebook & Twitter) would be able to burn it to CDs and listen to it from their cars or home stereos.

I would write detailed information about my tracklists, for a number of reasons:

It’s only fair that the creators of the music get acknowledged – especially since I was sharing their music without permission;
If one of my listeners liked a track, I wanted them to be able to know what it was (there was no such thing as Shazam);
I put detailed time markings, so that people would be able to identify the transitions and the amount of work I’d put into blending tracks together.

I would post them to the forums where I was already going (as well as my MySpace), where I already had my fans because of my texts, together with the links. Here’s an example of such a tracklist:

Then I started a blog on Blogspot to post all the mixes. People would subscribe via RSS and get the posts through their RSS reader. I even added a way to get email updates when the RSS feed would be updated, by using a popular tool at the time called FeedBurner. When posting my mixes to forums, I would also always include download links but also a link to the blogpost, so I could build up my followers there, too.

I didn’t know it at the time, but what I was doing really helped with SEO. If people were Googling those tracks, they’d often find my blog, because not everything was on YouTube, today’s major streaming platforms were non-existent, and the underground was not represented well on iTunes. By sharing my mixes everywhere, I was also generating a lot of backlinks. I was publishing multiple mixes per month. Throughout 2007 I published as many as 35.

Then Soundcloud arrived on the scene

I’m not sure how or when I discovered Soundcloud, but it must have been in its early days back in 2008. I managed to register my first name as my username, which I have held on to ever since, despite people trying to hack my account and even being hit by a trademark claim by an American rapper (after I rejected offers to buy it).

This is where things really started taking off. Now I was able to collect streams instead of downloads. It was so incredibly convenient. No wonder DJs flocked to the platform. All fans had to do now was hit play, but the option to download and listen in high quality was there too. On top of all that, I was able to timestamp my mixes in a much more interesting way: by commenting the tracks.

Something else happened too. By tagging my mixes, it was possible for others to find my work. And by browsing tags, I was able to find other DJs. This was a first. Never before had there been as big a community of DJs. Never before had it been so easy to connect to others. Never before had it been so easy for producers and DJs to connect from the comfort of their bedrooms.

I started listening to other DJs. Commenting everywhere. I continued the same strategy of tracklists and tagging, which maybe also helped my SEO on Soundcloud. But I also didn’t give up on my website until many years later when Facebook was more established and it was getting hard to get people to visit websites. Owning your audience was important, and I always knew this. I needed to have my own place to keep the people who are interested in what I do connected to me.

Then in 2009, Soundcloud changed the rules of the game for DJs.

The first big DJ revolt on Soundcloud

When Soundcloud started, they allowed everyone to upload 4 tracks every month. Tracks could be of any length, or at least long enough to fit a DJ set, but if you wanted to upload more than 4 in a month, you would have to get a paid account. This was great for DJs, but it didn’t last.

In October 2009, Soundcloud switched over to a model with a maximum amount of minutes per account. Even if you’d upgrade to the most expensive monthly package there was no way to get rid of the maximum. It caused an uproar (link to discussion with participation of the founders – but layout is messed up, because it’s a cached page). I participated and tried to be understanding. The model made sense for producers, who were more likely to spend money on Soundcloud. It sucked for DJs though. I wanted DJs to think about what kind of model would allow for Soundcloud to monetize them and very actively participated in the discussion.

The people who participated in that discussion got lucky, and it’s really a token of how user-centric Soundcloud was in those days. A link was shared with the participants, where they could list their accounts, and they were given 30 extra hours. For me, that was about 30 extra DJ sets and it has lasted me to this day (I never matched my 2007 streak) — and I should have probably mentioned this in my ‘Benefits of Being an Early Adopter‘ piece. And props to David Noel, who was Soundcloud’s community lead. The email exchanges (and exchanges on Soundcloud’s support community) that I had with him stuck with me. I was writing my thesis at the time and when I graduated and got into music startups those exchanges were a big inspiration for my early career.

Life goes on

As Soundcloud grew into the giant it is today, I grew along with it. My taste grew, my following grew, my tactics and strategies evolved, and I saw new genres flourish on Soundcloud, such as moombahton.

Before all the download-gate bullshit, that make you jump through hoops, follow random accounts, like Facebook Pages, etc., it was pretty convenient to get free downloads from Soundcloud. I actually set up an IFTTT script that would automatically download tracks I favourited to my Dropbox. This way I could discover new music while I was working at Zvooq by day, in passive mode, and then by night play around with the files in my mixes.

I participated actively in the new, emerging online scenes. Commenting on tracks and connecting to amazing new talent emerging from the internet, rather than from a particular network of DJs. This got me a lot of listeners. I started making mixes in which all tracks were available to download for free. This had value in different ways:

I knew for sure that all DJs would be ok with me uploading this;
People would listen to them, because they knew they can find and quickly download new tracks through there;
I would link to all the tracks and afterwards comment on them to let people know I had featured their work. Sometimes they would share my music on their social media (this is before the repost function on SC).

If you’re not communicating your music this way, if you’re not networking with your inspirations, you’re not doing it right. This is probably how I got most of my plays from 2012 to now. Tactics and landscapes change, but some principles are true forever. Participate!

Other tactics not listed above:

Make playlists on 8tracks with the tracks of my mixes in order to promote my mix;
Try to win followers via social listening platforms like turntable.fm;
Make short mixes and post them on YouTube in order to find new audiences;
Facebook & Twitter accounts through where I would connect to segments of my audience.

My demise as a net-DJ

Then things got harder. It wasn’t any particular issue, but a lot of factors combined to halt me.

I switched to a Traktor S4 controller with Traktor software, so now I had to do all my mixes live. I’m a perfectionist, so this decreased my output. Digging also got harder: the communal nature of Soundcloud changed and a lot of DJs stopped offering their tracks as downloads (even when they’re not selling them). Others would put their stuff behind download gates, which just made it a pain in the ass to collect tracks and way more time-consuming. This also decreased my output.

As the number of mixes I put out decreased, so did the growth of my followers and my exposure to my audiences that were not directly connected to me. Followers ‘churn’ even when they stay part of your follower count. This means that followers go inactive on the platform they follow you on, so the follower count no longer translates to playback or other forms of engagement. This doesn’t matter so much when you’re new, but if you’re working on something for over a decade, it matters.

All of this compounded. It’s been about 5 years since I had a mix that got ~5k plays. And 8 years for 15k. But the lesson here is: to rack up following & plays, you can get lucky with a hit or just be insanely productive.

I’m at peace with what happened and now that I’m in Berlin, with talented friends as producers, plus friends in companies like Ableton and Native Instruments, I’m slowly getting back into DJing and producing. I haven’t put out a track in a decade, and no mix in 2 years, but I’m surrounded by the right people to get back into it… and do things right with all the experience I’ve collected plus that surrounds me. (if I actually end up having enough time — the irony of working in music)

Key takeaways

If I had to distill this into key lessons (and I do, because I owe it to you after reading 2000 words), these would be my main takeaways:

GET THERE EARLY. I got really lucky with being early to Soundcloud, but it also helped that what I was doing back then was not as common as it is now. Stay on top of developments in sounds and genres, and be slightly ahead of the curve, so you can shine a spotlight on up & coming talent. It will pay off when someone blows up.
BUILD YOUR FOLLOWING. Don’t trust in platforms: own your following. Connect them to your presence in many places, get their email addresses. Make sure your following is loyal, build trust, be consistent. If you’re slightly ahead of the curve, they know they’ll always discover new artists through you.
ALWAYS CREDIT PEOPLE. Scenes are small. Help each other. If you play someone’s music: list it. Don’t have time to provide a tracklist? Then you don’t have time to be a DJ. Sorry.
BE HELPFUL. This is connected to crediting: help people to understand the music they’re listening to. They’ll connect to you for this.
BE CONSISTENT & PRODUCTIVE. My best days were when I was a student. I don’t know how I found the time in between college and 12-20 hours of side jobs per week, but often I’d get home and get to mixing. I’d be doing stuff with music almost every spare minute. That’s the only type of dedication that really works.

I’ve had my run. Maybe I’ll do it again, but in a different way. I still like DJing, but prefer to do it live now. Besides, I have other ways to enjoy music now, such as my day job at IDAGIO, as well as MUSIC x TECH x FUTURE.

But to the generation that’s out there, on the cyber highways, hustling: best of luck & I hope this piece helps you.

Online music is about to experience another MySpace moment

Posted on April 17, 2017 | by Bas Grasmayer

An emerging void signals new opportunity for innovation in digital music.

The benefit of writing thoughts down is that you get to revisit them. Six years ago, I penned a piece for Hypebot called The Next MySpace. At that time, people in the music business were desperate to for another MySpace to emerge: the site had been a ray of hope, but as it collapsed, online music was scattered across an immature ecosystem of rapidly growing startups like Soundcloud, Bandcamp, Facebook, Spotify, and many others that were eventually acquired or perished and forgotten. I argued:

The closest we will ever get to a “next MySpace” will be either a music network or a social network that manages to gather, organise and integrate the fragments in spectacular fashion.

Defining the MySpace moment

What I call a MySpace moment is not when everything was going well for MySpace: it’s when decline set in. People started replacing MySpace’s music players, which sucked, with Soundcloud’s beautiful waveform players. People started moving much of their social lives to Facebook (for friends) and Twitter (to connect to strangers). Up until then, the dominant social network had been music-driven — people, especially teenagers, expressed their identities by making long lists of bands they liked.

From the ashes of MySpace, which never managed to recover, rose a new ecosystem of music startups. They’ve managed to make it easy for artists to connect to fans, get paid for online playback, let fans know about new shows, and be able to very specifically target people with ads.

That moment, that void, was a massive opportunity and many companies benefited from it.

That moment is here once again.

The new MySpace moment

There are two main factors contributing to a new emerging void for entrepreneurs to leap in. One has to do with product adoption life cycles, which I’ll explain below. The other has to do with the important position Soundcloud claimed in the online music ecosystem.

Soundcloud came closer to being the ‘next MySpace’ than any startup has. And let’s be blunt: the company is not doing well. After years of legal pressure to tackle the problem of works being uploaded to the service without rights holders’ permission, they were forced to adopt a service model that does not make sense for Soundcloud. The typical $10 a month subscription doesn’t make sense. People are on Soundcloud for the fresh content, the mixtapes, remixes, unreleased stuff: the things that will not be on Spotify for weeks or months (or ever!). Why inject the catalogue with music of long deceased people?

There have been reports that Soundcloud would consider any bids higher than the total amount of money invested into the company to date. That’s not a good sign. The road they’ve been forced into is a dead-end street, and the only end game is a quick acquisition.

I don’t think Soundcloud will die, but it is hard for the company to focus on what they’ve always been good at. Now that they’ve been forced into the Spotify model, those are the types of metrics that are going to matter. Subscriber numbers, conversion, retention. So it may struggle to do as good a job serving the audience they’ve traditionally serviced so well. (small note: I love Soundcloud, and the people there: prove me wrong!)

This leaves a vacuum.

Adding to that vacuum, is the fact that Spotify (and other streaming services) are looking beyond early adopters. To understand the phenomenon, have a look at the below graph:

The top part of the graph details the product life cycle. The bottom part explains the type of audience you address during the steps of that life cycle. As we’ve all noticed from the jubilant press reports on streaming’s expansion, we’re in the growth part of the cycle. This means services like Spotify and Apple Music have to get really good at targeting Early Majority and Late Majority type consumers.

If you’re reading this, you’re in the Innovator or Early Adopter segment. Startups typically start off by targeting those segments. So when Spotify moves on from Early Adopters (their de-emphasizing of user generated playlists is a big hint!), it leaves room for new startups to target and better serve those types of users.

Filling the new void

What happens then? Well, we’re going to get to the next phase of the digital music ecosystem – which is mobile-driven, and flirting with augmented reality, VR, and artificial intelligence. Early adopters are likely to keep paying for their Spotify subscriptions – it’s too big a convenience to give up… So entrepreneurs will have to figure out ways to monetize new behaviours.

Now is a great time to look at very specific problems in music. Don’t try to build the next Spotify or the next Soundcloud. For a while, everyone was trying to build the next MySpace — all those startups are dead now. Instead, take a specific problem, research it, build a solution for someone, test it, try it again for a broader group, and if it works: double down and scale up.

Personally, I’m very curious to see where startup accelerator Techstars Music’s current batch will be five years from now.