NFTs | MUSIC x

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.

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 NFTs: why buy them?

Posted on March 3, 2021 | by Maarten Walraven-Freeling

The more I read and hear about NFTs the more sense it makes to me for artists to get in on the act and find a new way to broaden their revenues (here’s how artists can go about creating and selling an NFT). But what about the buyer’s perspective? Why should they get in on it too? Is it about having a collectible, a one-of-a-kind? Is it just about supporting a specific artist? Or, is it an investment? Moreover, and this is the focus of this article, what’s the potential for artist-fan relations in light of the functionalities and possibilities of the blockchain?

Screenshot of audiovisual NFT by Teebs & Yuma Kishi on Foundation

The buyer’s value

Just one month ago Bas spoke about NFTs in the context of Mike Shinoda‘s first sale. In that article he argued that buyers step into this world because they’re building a world, a metaverse. In that metaverse, we need items that will help us showcase our identities. An NFT is one way of expressing identity and there is value in that. Similarly, in her The state of music NFTs [paywall] article from 14 January, Cherie Hu argues that one way to look at the tokens is as a form of rare digital merch. This, again, relates to confirming your identity, this time as a fan. Continuing along those lines, Hu asserts in a follow up article [paywall] that we shouldn’t even be paying that much attention to the crazy bids driving the hype through auctions but on the potential of selling multiple NFTs at a fixed price point. That’s what will allow artists to tie their fans to them and open up new fan-to-artist interactions.

The buyer’s value, then, is much closer to what happens with certain membership platforms. One example is Hanging Out With Audiphiles, Jamie Lidell‘s podcast, which has a Patreon where he shares the sounds he makes for each episode. His patrons can then make music with those audiofiles. An alternative would be to mint each sound file as an NFT and in that sense give some extra ownership to those ‘superfans’. Even more exciting is when the NFT ownership provides access to more than just, in this example, the sound file. The NFT can then come with special access to the artist (kind of similar to 3Lau‘s recent auction where the highest bidder gets creative direction on a new song by the DJ).

From membership to equity

In a world where what’s called the creator, or passion, economy is growing the distance between artist and fan is shrinking at a similar pace. Livestreaming during the pandemic has provided access to artists in their private spaces and often without lights and make-up. Similarly, services like Cameo and Clubhouse allow the type of interaction between artists and fans that was often unthinkable just a few years ago. With greater access to your favorite artists through a variety of social media and the ability to support those artists directly through membership platforms the logical next step is to consider the artist as something you can have equity in. Jess Sloss from Seed Club explained this idea to Colin and Samir:

Viewed simply, this just looks like moving from paying a monthly subscription to support an artist to buying NFTs with the same result. Where this evolves, however, is when FTs come into play. Once an artists gets their own token, they can start playing around with various layers of access. Because this token represents real value – for example on the Ethereum blockchain, but there might be more potential with something like Polkadot – the investment changes. The point of a membership is that you can cancel it at any given time. Conversely, the only way to get rid of the equity you buy into an artist is by selling it. In other words, to shift it to another fan.

From equity to growing revenues together

There’s a bunch of start-ups working in what Rolling Stone dubbed ‘equity crowdfunding‘ back in 2019. The idea, roughly, is that based on future streaming royalties, fans can invest in their favorite artists to help them create new music. By investing in an NFT or, for example, a social token, the fan engages in the potential for revenue growth. Whether this is through a resale factor, which usually holds a percentage for the artist in the smart contract, or through a secondary right attached to the token (see Jacques Greene‘s publishing rights).

Besides the artist and the fan, there’s also a space here for the developer. As Bas argued in his article on NFTs, we should view the whole blockchain experience as a metaverse in itself. As artists and fans find their ways to connect within that metaverse, there’s also a lot to be gained by the developers that pave the roads that allows those connections to grow. Where these three levels find each other, is where we will see the most growth in this world. What’s more, those types of collaboration will hopefully advance mainstream adoption both for fans and artists throughout this year.

In short, NFTs are one logical next step in a world where the interaction and proximity between artist and fan respectively grows and shrinks and moves towards levels resembling collaboration.

How SoundCloud should tackle fan-artist payments and reconquer lost ground from Bandcamp, Instagram & TikTok

Posted on February 16, 2021 | by Bas Grasmayer | 1 Comment

SoundCloud is rumoured to announce new plans to “let fans pay artists directly” which some commentators interpret as the music streaming service exploring user-centric payment systems.

While user-centric payments definitely make the landscape fairer and realign incentives by making sure the money generated by fans of certain artists actually end up in those pockets, it’s definitely not a silver bullet solution to make up for the difference between desired and actual revenue artists receive from streaming services. In other words: for the vast majority of artists, the immediate change in royalties from a shift to user-centric would be negligible.

Furthermore, it’s complex to negotiate, as SoundCloud’s VP of content partnerships Raoul Chatterjee pointed out during a recent session of the UK streaming inquiries:

“The whole investigation into user-centric is a very detailed and complex investigation that needs to be taken. It’s one potential path we’re exploring… and it would require industry-wide conversations and support to be impactful.”

SoundCloud is doing ok (especially compared to a few years ago), is reporting growing revenues, but it’s losing relevance. SoundCloud does not have time for lengthy negotiations. As a platform, they’ve lost their footing at the center of music subcultures and the longer it takes for SoundCloud to regain its position, the harder it will become.

Keep the lawyers at the (virtual) negotiation tables, but in the meantime, claw your way back.

SoundCloud’s relative interest over time based on Google searches.

Instagram, Bandcamp, and the post-Covid landscape

Two questions.

Firstly, where do music scenes go to connect to stay connected with each other in 2021? I’ve argued that Instagram has usurped community building from SoundCloud. Of course it should be noted that TikTok is playing an increasingly important role there, especially for certain genres. To a lesser degree, groups on Facebook, Telegram, and Discord form places for people to share their latest tracks, get feedback, find people to do collabs or exchange remixes with, etc. As such, they’re also great places for fans to keep track of the latest developments in music.

Secondly, where did musicians turn when they struggled to make ends meet with just the income from Spotify, Apple Music, YouTube, etc.? They turned to Bandcamp in a massive way. SoundCloud, with its creator-centric roots, wasn’t well-positioned yet to accommodate these artists, because what it offers artists hasn’t changed much from its early beginnings. In 2020, being creator-centric meant helping creators make money – and SoundCloud didn’t have much to offer beyond what it offered artists since the service’s early days. That is: a place to upload your music and present it to other people. That addresses a pre-2015~ market need: making music easy to access. Access has been solved. Monetization hasn’t.

Another place that made music easy to access, YouTube, has been SoundCloud’s most important competitor. YouTube, since its early days, has offered social functionality similar to SoundCloud’s, in that one can follow creators (once innovative! Spotify only launched this 4+ years after launch), comment on tracks, and see other users’ profiles.

By 2021, YouTube’s suite has evolved to include membership clubs with monthly fees, monetization through content identification, and livestream monetization through social features that make fans more visible in the chat (similar to Twitch).

This is the landscape SoundCloud must address & find relevancy in.

(more about this landscape in my piece for Water & Music about the rise of the fan-centric music streaming service (paywall))

The social opportunity

SoundCloud was strongest when it catered to its early adopter users or users who exhibit that type of behaviour. Behaviour commonly associated with early adopter users is word of mouth, being a power user, and a willingness to overlook certain flaws as long as the product delivers exceedingly well on its core value proposition. These users are not well-addressed, since the value proposition has diluted over time in order to target wider audiences (e.g. through its Spotify-like subscription service). SoundCloud has made some great initiatives to woo creators in recent years, but the unifying aspect for all users on the platform is its listening experience – and that’s a social one.

People go to SoundCloud to discover new music. To find what’s ‘Next Up’ before it’s uploaded anywhere else. If you’re into a particular type of music, you’ll follow many of the same artists as other fans of that music and you’ll see some of those fans appear in the timeline comments on tracks.

Timed comments on Masayoshi Iimori’s track Alcohol.

On profiles, which have the same feature sets for fans and for artists, this social functionality is also present by displaying who someone follows and is followed by, as well as any tracks they’ve liked and comments they’ve left. For users who don’t upload any music, the main profile real estate consists of reposted tracks (similar to a Twitter user who only retweets). All of that is social.

Do the majority of users explicitly engage in social behaviour on the platform? Unlikely and it’s probable that a small minority of users create most of the (visible) activity, as on Twitter. SoundCloud is a community product where a minority of users create the value that the majority of users get off of the platform. Unlike Spotify, which tries to help users get as much value out of the catalogue as possible, SoundCloud should focus on the value users can get out of communities and the artist-fan relationship.

Lessons from gaming

This is not dissimilar to what fueled the success of games like Farmville or Clash of Clans. In free-to-play games, the majority of users will never spend any money. Instead, they create value for the ecosystem, so that a minority of users becomes willing to spend (big).

In order to leverage these dynamics, and create revenue for artists, SoundCloud must double down on social. How?

Step 1: Leaderboards on tracks and profiles. Show off the top fans of tracks and artists. Dedicated fans will want to earn their spot as the top fan. It’s not just fans: if you’re part of a certain music scene and want to make sure you’re ‘seen’, you’ll play new tracks on repeat, so you appear on the leaderboards on day 1. (just imagine K-pop stans, if you find it hard to imagine how fan communities would approach these types of dynamics)

This functionality already exists inside the stats dashboards artists have access to. All SoundCloud needs to do is make leaderboards visible on the various pages and perhaps create a setting so people can exclude themselves from public leaderboards.

Screenshot of the top listeners of a particular track in a 7-day time period (stats dashboard).

Step 2: Track and profile pages as real estate. Leaderboards create social competition and a way for fans to earn status. Now comes the monetization: let fans pay to claim pages in a non-obtrusive way, similar to how YouTube’s Super Chat feature lets you claim visibility in a chat during a livestream. You could let artists set prices or create some type of market dynamic for this.
Step 3: Place activity & payment on the same currency. As in gaming, certain users will spend more time creating value through activity and other users will fuel the economy through payments. By creating an on-platform currency, SoundCloud could reward active users with tokens that accrue value as people purchase tokens to spend on the platform with ‘real money’.

The tokens could then help artists mint their work as NFTs and create a more sophisticated dynamic for ‘tracks as real estate’. Basically, artists could earn money from playback, from selling tracks as NFTs, and by making commissions off of people speculating and reselling music NFTs (a commission percentage can be defined in the smart contracts associated with an NFT). From here, SoundCloud could come to function more as a protocol and create a metaverse-friendly version of its other early value proposition: music playback that embeds everywhere. This time with music as a vanity item that all can enjoy, but can only be owned by one person at a time while always staying associated with the creator – even when NFT ownership transfers from one person to another.

As the user-facing part of the platform shifts towards creating more value from the artist-fan relationship and the activity inside fan communities, subcultures, and scenes, lawyers can negotiate with industry gatekeepers to change royalty administration to a user-centric model.

Some of the above is actually what the Audius protocol is trying to accomplish. You could also go a lot further than what I’ve described, as Audius intends and as Mat Dryhurst explored in his essay SoundCrowd: Tokenizing & Collectivizing Soundcloud. Long term blockchain visions aside, for 2021, being a creator-centric company means being a company that helps monetize, so SoundCloud must focus on the short term and employ an “opportunities multiply as they are seized” type of strategy. That means: not standing still to evaluate distant forks in the road, because what you do along the way will determine the paths you can take from that fork.

User-centric is too slow for SoundCloud

Is user-centric streaming the right thing to do? Yes. Will it help SoundCloud in the short term? No, because artists will not see significant enough returns in order for them to drive more traffic to the platform.

Spotify is cool.. but @Bandcamp put double glazing on my house this year.
— Om Unit (@om_unit) December 3, 2020

How can SoundCloud be as significant to artists as Bandcamp was in 2020?

SoundCloud must emphasize its community nature, since that’s how the type of value can be created that part of its core users will pay for. That won’t be most of the audience that SoundCloud has been marketing its music streaming subscription to (which can’t beat catalog-centric Spotify or value gap YouTube).

The platform must be selective about what type of behaviour it wants to cater to and the value it can create out of that. For that, it makes sense to use its DNA as a social music platform – something that Spotify, Apple (through Ping & Connect), and others have not been able to figure out. It needs to focus on the users that can amplify community excitement around significant monetization functionality and help make SoundCloud as culturally relevant as it was half a decade ago.

Signed,

A long term SoundCloud user with a 3-letter username: Bas (and more recently Viva Bas Vegas).

NFTs are blockchain’s hottest new use case for music. They should not come as a surprise.

Posted on February 8, 2021 | by Bas Grasmayer | 1 Comment

Linkin Park‘s Mike Shinoda just sold a digital piece of art for $30.000 and took to Twitter explaining some of this thoughts in a thread:

“Even if I upload the full version of the contained song to DSPs worldwide (which I can still do), i would never get even close to $10k, after fees by DSPs, label, marketing, etc.”

The ownership of this piece of art is tracked through a non-fungible token on a blockchain. Blockchains are commonly used as distributed ledgers: databases operated by networks of users, like Ethereum. They keep records of any changes to the ledger and can track things like ownership of tokens or cryptocurrency, e.g. Bitcoin.

But so what if a piece of art is recorded into a distributed database? Why the hype?

The current cultural moment is strongly influenced by the pandemic. Artists saw a big drop in income. Streaming revenue isn’t cutting it for most. So the big experimentation began. Artists searched for revenue through things like livestreaming, fan clubs, ticketed virtual meet & greets, online courses, and NFT auctions…

Why are people buying content that can easily be duplicated?

Many a music industry conference panel has bemoaned the fact that people are willing to buy a cup of coffee or bottle of water, but won’t spend that money on a download and instead chose to pirate it (in the days long before Spotify counted 150M paying subscribers). Two decades later and many of the same philosophical debates about the price and value of music continue. Meanwhile, gaming, an industry that faced the same piracy issues as the music industry, pragmatically pioneered ways to get people to pay for completely virtual items.

Gaming gave the ownership of virtual items a valuable context. People who spent many hours a week inside games would find value in virtual real estate or vanity items that translates into real world currency. This is not something recent. In 2013, someone paid $38,000 for an in-game item in Dota2 – an item which doesn’t improve a player’s performance, but just makes them look cooler. In 2010, virtual real estate by the name of Club Neverdie in online game Entropia sold for $635,000.

Now, ten years later, we’re seeing the same dynamic emerge for music. Owning an NFT doesn’t necessarily mean that nobody else can enjoy the work of art associated with the token, much like with physical art that’s exhibited. With the emerging metaverse, some are expecting NFTs to become its property rights.

It works like an auction; the value is determined by the bidders. At the end, one person gets the NFT. Think of it like like owning a 1 of a kind item in a game, or like “owning” an instagram post. It’s a weird thing to own, yes, but:
(more)
— Mike Shinoda (@mikeshinoda) February 6, 2021

NFT x Metaverse

The idea of the metaverse essentially boils down to a virtual shared space. One prominent example of this concept is Roblox, which is a gaming platform in which people can build their own experiences that are all interconnected through Roblox’ economy (its currency being Robux). Another is Fortnite, which has some of the ingredients already, but hasn’t yet developed a marketplace with low barriers to entry like Roblox has. Despite that, one of the best primers on the topic of the metaverse is the below interview with Tim Sweeney, CEO of Epic Games, which owns Fortnite.

It’s the convergence of various pandemic-accelerated trends (VR / XR, virtual economies, crypto) and the expectations of people in these domains that is currently driving NFT art’s success stories ($750,000 CryptoPunk sale, Panther Modern‘s $666 sale, virtual critters for $100,000 a piece). If you want to know what the future holds, look at what the smartest people in the room are doing, because they’ll be the ones building that future.

12 years after the initial release of Bitcoin and the world’s introduction to blockchain, crypto is starting to emerge as an anticipated layer of connectivity for transactions occurring in the metaverse. With a market cap higher than Facebook at the time of writing, Bitcoin has made many early adopters very rich (as have other cryptocurrencies). Besides figuring out how to build an infrastructure in which they can effectively use their blockchain-riches, we’re seeing this money flow into other spaces, like art (and soon Tesla).

Simplified: to understand some of NFTs’ success, you should look at the crypto space as a metaverse without an interface that looks like a video game. The participants of that space are still players: they’re building their own world, their own infrastructure. They care about what they look like in that world, just like how people in virtual worlds care enough about their looks that they’re willing to buy in-game currencies like Robux (to the sum of billions of USD in 2020). Owning art is cool – it gives you standing in your micro-community which is part of larger meta-communities (e.g. a gaming clan is a community inside the community of one server of a game, which is a community inside the global player-base of that game).

And sure, there’s altruism too, because it’s cool to support art. However counting on altruism tends to spawn panel discussions to compare bottles of water to digital art. Focus on non-altruistic value.

Lastly, regarding the game item or IG post comparison: it doesn’t matter if you think a current bidding price is too high for a digital collectible. It matters that one person thinks the the price is worth it.
(more)
— Mike Shinoda (@mikeshinoda) February 6, 2021

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What to watch out for in 2021: scarcity models, return to live, and sustainability

Posted on December 29, 2020 | by Bas Grasmayer

MUSIC x focuses on long-term thinking about music & surrounding industries, so instead of looking back at the year we’re taking a look at trends we expect to be influential in the coming months with regards to tech, the pandemic, and sustainability. Here’s what to watch out for in 2021.

This article is jointly written by Bas Grasmayer and Maarten Walraven-Freeling.

Tech: Scarcity

Music was once a scarce good; the only way to experience it was live. Throughout the twentieth century technological developments have driven music from scarce to ubiquitous:

The inventions related to recorded sound go back to the late-nineteenth century and the patent for the first gramophone disc stems from 1887. It wasn’t until the 1920s that recording techniques changed to make it easier to record music and this helped the spread of music beyond the live experience. It also spurred on the music industry as we know it today.
Moreover, the 1920s saw the advent of radio which brought recorded music into most homes. Not only did this broaden the scope of the audience for music, the medium also influenced the format of music itself and the popularity of it and its performers. Fan culture was born.
Of course, radio was thought to kill the phonograph industry. But it didn’t. The equipment used for radio broadcast helped to improve recording standards for music and with it the sale of records which doubled from around 100 million in 1921 to 200 million in 1929.
We jump to the 1950s and the rise of television and film. New opportunities first and foremost for composers and musicians to find new revenue streams. But, of course, this new medium was thought to kill the old radio industry. Again, it didn’t. Fan culture got a massive boost.
The trend continued into the broader acceptance of video and the rise of MTV in the 1980s. Video killed the radio star may be a popular song, but it didn’t happen. The age of the CD broke and recorded music industry revenues grew astronomically. More people got access to more and more music.
1999, Napster. The internet did actually nearly kill the recorded music industry. Suddenly, all music was available for free at everyone’s keyboard-fingertips. The response? All bets on ubiquity: From the failed early experiments of the major labels through YouTube to Spotify. Music is everywhere and we, the listener and fan, expect to have it all, always.
For more than 100 years the music industry has been on a wave towards ubiquity with technological innovations as a catalyst forever thought to do more harm than good. Moving into the third decade of the twenty-first century, in order to maintain growth, we’ll need to jump on the scarcity wave.

Where to find scarcity?

How many people, publications, musicians, labels, etc. do you directly support? How many in 2018? How many right now? It’s likely you support a few and that this number has grown in the past three years. To keep you supporting you’re usually given access to exclusive content. In other words, exclusive content = stickiness.

This year, the virtual Music Tectonics conference provided a couple of days of being online together with some of the frontrunners in music and tech and you would have been forgiven if you came away thinking direct-to-fan is what everybody does. This isn’t true yet, but it has grown significantly in 2020. Three things to keep an eye on:

Equity investment

From major players such as BTS’ label Big Hit Entertainment going public and the ARMY taking a stake in their own fandom to something like Bumper Collective which allows fans to buy a stake in the future royalties of their favourite artists’ music. This investment idea – and subsequently the idea behind all the major catalogue acquisitions of 2020 – comes from the belief that the music streaming economy will grow. More and more people will become a part of the music industry of ubiquity, but that also provides opportunities around the scarcity of ownership.

Non-fungible tokens

In our recent update on blockchain in 2020 we dove into so-called ‘NFTs’. One week later, a digital artwork by Beeple sold for $777,777 on Nifty Gateway, a platform that makes it possible to own digital goods, making them scarce again. Days later, rapper Lil Yachty sold a digital collectible for $16,050 through the same platform. While earlier auctioned collectibles relied on being physical, such as the infamous single-copy Wu-Tang Clan album purchased by Martin Shkreli (the story of which is being turned into a movie on Netflix), the phenomenon has now gone digital.

Gated content

When Cardi B signed up to OnlyFans earlier this year, she announced it would be a place for only her and her fans. While doing stuff out in the open may get you fans and makes it easy for people to spread the word, gating content allows fans to feel like they’re accessing or are part of something special and helps the artist feel like they’re talking to their ‘true fans’. Cardi B and OnlyFans are far from the only examples. Membership models are rising in popularity through Patreon, Substack, and good old YouTube, among many others. If 2020 didn’t do so already, 2021 will see membership access models for artists go mainstream.

Corona: live/stream

Andrea and Virginia Bocelli during Believe in Christmas — Andrea Bocelli’s Believe in Christmas livestream

The pandemic and the enforced lockdowns have accelerated many changes that were already bubbling right underneath the surface of the music industry for years. None of these accelerations went faster than with livestreaming. While the live music industry was decimated, livestreaming took centre stage. At first most everything was free and poorly produced but that thankfully changed and we’re now faced with ticketed events of high production value from major artists like Dua Lipa, Billie Eilish and BTS. Similarly, there are artists who started going live often with good productions and on a subscription basis (exhibit A being Melissa Etheridge) leaning hard into their superfans. Meanwhile, the return to live seems to creep further into 2021 as we flow from lockdown to lockdown. With the vaccines, there will surely be live concerts as we head into the second half of 2021 but how will they be organised? Thus, the double-headed beast of live, streaming events and in-person events, is the trend coming through pandemic 2021.

The livestream will develop into an ever more interactive medium, both for fans and artists. There will be more productions that will include elements like BTS’ geotagged lightstick, the ARMY BOMB, during their Bang Bang Con virtual concert. Similarly, the way Billie Eilish provided engagement even the day before the show and pulled up 500 fans during one song as they were watching from behind their screen will be further developed to enhance interactions between artist and audience. Once live music returns these livestream events will remain a staple of the touring artist. Take, as an example, the Genesis Reunion tour, postponed twice due to the pandemic and now scheduled to start in April 2021. Let’s imagine for a moment this tour will go ahead, but the band has no interest in touring beyond the UK and Ireland. One full month of touring and most of the world is left without an option to attend. They can decide to bring a full camera and production crew to one of their gigs and film the whole thing as is. The other option is to take one extra date, create something more interactive and bring that as a live event around the world. Instead of 18 months of touring the globe, the band can perform once and ‘tour’ from one geofenced url to the next. This will be attractive to artists not eager to tour full time and to fans who are traditionally in geographical locations where most touring musicians don’t visit.

Pandemic, or even epidemic, in-person concerts will see new hygiene regimes enter the everyday vocabulary for concert- and festival-goers. We’ve reported before about the scientific trials taking place in Germany, the Netherlands, and Spain, among others. What these show is that a combination of rapid testing, staggered entry, mask-wearing, ventilation, and protocols pertaining to movement will become normal. You won’t have to decide whether you want to watch the support act, instead you’ll arrive at a very specific time to be able to enter a venue. Tickets will become just that little bit more expensive as the cost of the rapid test will be included in the price. It will be a long slog and hard work to put these types of events on and to attend them, perhaps also to perform them.

And, of course, tours could get cancelled. How the risk of cancellation will be attributed will be a spearpoint for 2021: artist, promotor, venue? What role will governments play? One of the reasons everything has been postponed is that this has deferred the losses that would have come from cancelling. At what point, however, will it become impossible to postpone a tour – again? As these risks become real as the year advances more governments will step in to make sure venues, promotors and artists alike will feel safe to plan events (Germany leading the way again). This type of risk deferral will look different for major artists and companies like Live Nation and AEG than for smaller artists and independent venues and promotors. The former rely on more long-term planning and have access to different types of funding (see AEG’s staff cuts and its owner’s loan). They will certainly be able to hold out one way or another until live and in-person events return. Smaller artists and independent venues will depend more heavily on support structures, both from governments and fundraising activities.

Sustainability: think local

European Commission Executive Vice-President for the European Green Deal, Frans Timmermans.

Will sustainability be on anyone’s priority list in 2021 as many feel they’re making up for lost time, and revenue? Hard to answer, but it absolutely should be as our environmental crises are of an order of magnitude disproportionate to one pandemic. No music on a dead planet, as they say. Before the pandemic broke out, climate and the environment in general had a lot of momentum as topics in popular culture. This was, in part, due to movements like Extinction Rebellion and Fridays For Future, the latter of which spawned movements of school kids protesting weekly in countless cities all over the world. The latter has largely moved their protests online, while also trying to figure out pandemic-friendly protests offline that can easily be amplified through social media. While this cultural force has become momentarily less visible, it’s ready to mobilize as soon as it’s possible again.

While you can find an overview of initiatives and resources regarding this topic on MUSIC x GREEN, what we think you should be watching out for next year is the following:

Regional collaboration between the music sector, government, and other industries.

In many countries, but more specifically cities, we’ve been seeing various levels of cooperation and coordination between the music sector and (local) governments & institutions. This can be over restrictions and limitations, corona-proofing venues, scientific experiments, layoffs & furloughing, or bureaucratic aspects like insurances and cancellation. This relation should be preserved coming out of the pandemic in order to drive positive change around music & sustainability.

A prime example of this is Massive Attack’s work on decarbonising live music and coming to the conclusion that the primary partner for this are cities, rather than promoters or venues, because it’s about transport infrastructure, power, and waste. For this type of innovation & problem-solving, live events can be useful trials (as we’ve highlighted before). This echoes some of the thoughts put forth by Shain Shapiro, founder of Sound Diplomacy. In a multi-part series, Shapiro points out new trends in localism such as the 15-minute city and the fact that the music sector is as organised as it’s even been. Those are two very important ingredients to actionable change. While change is also anticipated in other areas, such as more artists employing more circular models for their merchandise, 2021 will be a year of disruption with a local focus being an easy way to counter risks, and an important opportunity for bringing about sustainable change.