✖ Music & blockchain as 2020 concludes
And: Spotify's plagiarism detecting AI; PRS for Music proposes higher livestream tariffs; New YouTube features; Germany's event cancellation fund for 2021
It's not that things have gone quiet around blockchain. It’s just that things were really loud when it was being touted as a silver bullet to all of the music industry's productivity.
Meanwhile the technology is reaching its plateau of productivity, so let's take a quick look at what’s bubbling up among the initiatives leveraging blockchain technology in the music space right now.
(If you need a primer on blockchain, read my 2016 piece "The Music Industry Isn't Ready For Blockchain" in which I shared my skepticism about the silver bullet way of thinking at the time)
The following is not intended to be a complete overview — if you’re doing something in this space, feel free to put yourself on my radar by pinging me on Twitter.
Ownership of songs can famously be complex. One of the startups trying to solve the problems around this is Verifi Media (formerly Dot Blockchain). This year the company partnered with music distributor FUGA to let its users register their (meta)data on a blockchain that tracks changes to proprietary data. Then, Verifi partnered with rights management platform Unison Rights bringing together rights metadata on the work and recording level.
The promise of the use of blockchain in this space is that changes to data can be made real-time and transparently, which also creates benefits for faster and more accurate reporting and payments.
Facebook’s long-awaited ‘stablecoin’ Diem (formerly known as Libra) could launch as early as January. One of the Diem association’s members is Spotify, which has long shown interest in the space. They’re furthering their commitment now and are looking to hire someone to their payments strategy & innovation team that is specifically focused on digital assets such as the blockchain-based Diem.
Rapper Lil Yachty is the most recent star to launch their own cryptocurrency, called “YachtyCoin”. The token will allow fans to earn perks similar to things you might see in Patreon tiers or Kickstarter rewards. How exactly is still unclear. The token is powered by Fyooz, a platform that encourages creators to ‘become a token’.
In the case of Audius, a blockchain-based streaming platform I’ve written about (a lot) recently, blockchain is used to distribute value more directly between participants of the platform (e.g. artists and listeners). Their tokens also allow users to participate in the governance of the platform — creating a more decentralized approach to platform-development than the status quo of streaming — akin to common practices in open source software.
Marketplaces & Non-fungible tokens
Through tokenizing the trade of goods, market places such as Foundation and Zora (the latter of which recently raised $2M) allow creators to participate in the secondary market of limited-edition goods. The latter launched a token with musician RAC, which is built on Ethereum (a popular blockchain for cryptocurrencies) and is rewarded to his “most loyal fans”. Holders of the token, which can only be earned and not bought, will have exclusive early access to new merch released through Zora by RAC (who’s also an investor in Zora).
Whether physical or digital, so-called non-fungible tokens (NFTs) are used to prove the authenticity of goods and are already leading to sales of digital art for $100k. It could create an interesting avenue for digital scarcity and what 2020 was for livestreaming in music, 2021 could be for NFTs for high profile artists. New startups keep popping up, like Catalog where artists can sell single-edition music recordings and make money off of the secondary trades.
Up until now, these types of experiences would mostly appeal to collectors and superfans due to the associated price tags, but it’s interesting to think about what applications could be for more accessible types of digital scarcity (e.g. creating a song that can only be heard once and then must be sold on through a bidding mechanism).
As music professionals had to figure out models of digital scarcity and unique virtual experiences as a response to the pandemic, those insights can now be used to explore completely new avenues, some of which may be blockchain-based.
💳 Payments platform Stripe launched Treasury - a set of APIs to easily let people interact with and offer financial services. Stripe is one of the most popular payment services and is used by Shopify and Substack, among many, many others. It will be interesting to see how music-related platforms will utilize this, as I’m sure people in ticketing or any sphere of royalty distribution can see value in this. For now, read Ben Thompson’s analysis of the implications and how it positions Stripe as a platform for platforms.
📺 YouTube has launched a set of new features. The one that stands out is Live Redirect which allows for livestreams prior to a Premiere. The move makes a lot of sense and allows artists to build up hype, connect viewers, and give fans more of a sense of community when premiering something new. The platform is also testing out ticketed livestreams, teaming up with BLACKPINK for an upcoming show and using its membership platform to sell access.
🔗 If the phrase ‘Creator Economy’ is not on your radar, add a blip. It’s typically used to refer to DIY creators outside of the music sphere that monetize their fan relation on platforms like Patreon, YouTube, Etsy, Skillshare, etc. Hugo Amsellem mapped out the creator economy identifying over 150 companies and tools to utilize. Great source of inspiration for generating additional revenue streams & building audiences in novel ways.
🤔 You have seen the yearly Spotify Wrapped campaign. You have likely seen more than a handful of articles about it. I want to shine a light on Liz Pelly’s critical perspective which discusses the cultural issues around it, such as play count as proxy for value and the financial forces in the driver’s seat of music’s most popular interface.
🦘 Sound Diplomacy’s Shain Shapiro writes about how Australia’s New South Wales passed reforms to live music regulation across various state departments simultaneously, calling it a blueprint.
“If you host live music, it benefited one’s license application, not detract from it. This is not the norm. And it is game changing.”
🇩🇪 Germany has announced a €2.5 billion cancellation fund to mitigate risks involved in planning events in the second half of 2021.
❄️ MusiCares announced a help for the holidays program “offering $250 essential goods e-cards to the first 4,000 eligible applicants”. It has also updated its relief resources guide which can be particularly useful for US readers.
💰 Travis Scott made more than $20 million from his Fortnite appearance earlier this year. That number includes merch and is about 15 times higher than his record-grossing tour stop last year. Comparing a global livestream to one tour stop is admittedly awkward though, due to the different dynamics at play.
💼 UK collection society PRS for Music has proposed that ticketed or sponsored livestreams should pay at least 8% of their gross revenue as a tariff (compared to 4.2% for normal live shows). Many artists and managers, represented by the Music Managers Forum and Featured Artist Coalition are not happy and are urging reconsideration.