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✘ A streaming economy inflection point
And: Babelification of the Internet; Sydney Opera House AV Performance; Hello humans; AI and adaptive music in video games; Spotify changing royalty model
We’ve been building towards this and the wave is cresting. The streaming economy has definitely hit maturity. This means it’s ripe for disruption and there’s plenty of start-ups chomping at the bit to be the one to make the difference. And yet, a mature economy won’t go away any time soon. At the same time, it’s also beset with illnesses. One of them comes in the form of functional music - white noise, rain, etc. In recent articles about Spotify, Alice Marwick mentions in WIRED that there’s 3 million hours per day spent listening to functional music. Omer Kabir goes one step further in an article for Calcalist, talking about 3 million hours per day just spent on white noise podcasts. Either way, it’s a lot of hours spent streaming audio that won’t result in many artists being paid out. Of course, Spotify has been trying to shift their business model away from the music royalty system for a while - e.g., through podcasts, audio books. In fact, Spotify’s goal has always been to be like radio where ad money is way more important than those subscriptions.
How to keep growing?
The biggest question for any mature economy is how to keep growing? If we look at Spotify, they’ve just announced fantastic quarterly results. They even made a profit, although I feel that’s a happy combination of the subscription price hike, lay-offs, and shutting down a few expensive podcasts. We’ll see if they can repeat it. Similarly, Netflix posted their quarterly results, which exceeded expectations. Whether that’s more to do with the crackdown on password sharing than anything else will only be known in the future. So perhaps the answer to how to keep growing is to behave like a mature company and starting to look at the margins, which at scale can have a big impact.
If we look at other industries, we also see platform maturity and questions around growth. Roblox, for example, has both an impressive number of daily active users and a thriving virtual economy. And yet, they need to think about how to sustain their growth. Lauren Goode recently explained how Roblox sees communication as a focus element to keep engagement at levels that will keep increasing over time. They aim to do that through ‘immersive avatar-based video chat.’
Will it work? Who knows, but it shows how mature platforms look beyond their core offering - that their users enjoy - and try to find ways to bring more hours spent on the platform.
Techno-optimism vs. deceleration
The optimism about the streaming economy is also optimism about the underlying technology. Will we, users and consumers, continue to engage with the tech? The optimist says yes. However, we also know that new technologies create their own audiences. This is clearly evident in Web3, which in a deep bear market trundles along from meme-hit (frog coin) to meme-hit (song.tech) while others redefine what an album is (Scenes, El Niño Estrella) or how music can be experienced and engaged with (F2P).
This is, of course, also about that manifesto for techno-optimism. Until I read it, I always thought I was a techno-optimist, but it turns out I could be more of a decelerationist. Dave Karpf put it well in relation to the speed of development in tech:
“But we can also affect the direction of technological development. Technological “progress” does not occur along a single, fixed path. Its course is heavily influenced by people, existing institutions, and incentives.”
And that I support. Just like time is non-linear, so is any notion of progress. Moreover, the success of a single unicorn might make it seem like the average is great, but that’s a skewed version of reality.
So, if we take this decelerationist approach to the mature streaming economy, one path forward I can see is that double-digit growth might go away, but the underlying thesis won’t. Especially from the perspective of the consumer: having all that music available is a convenience we won’t want to do without. But, there’s a finite amount of people and, more importantly, also of resources.
The inflection point equals micro economies
This, then, is my optimistic take. With our main economic driver in music maturing the inflection point, the crest of the wave, won’t lead to a crash. The advent of AI-generated music will mostly impact functional music. Artists will find opportunities to drive their own terms around copyrights not yet established properly - such as around the voice. Crypto will help independent artists establish their own worlds with their own economies at their own scale. This is not a vision where these artists, the worlds they build and run, and the tech they use to do this lead to 10x in value. We’ll need different kinds of investment - community focused and centred around network value. These will be micro economies, part of a broader sustainable economy focused on relationships over materialism. It’s a mind shift.
The winners? Nothing VC-backed, but artists who have a vision and find minimum viable communities to drive their world-building and world-running activities. From these MVCs we’ll see collectives spring up who share in any spoils. Optimistic? Yes. Doable? Also yes, and many seeds have been planted and gardens are growing in various places.
🏗️ The Balkanization & Babelification of the Internet (Ruby Justice Thelot & Rue Yi)
“Babelification is the process by which, after splintering, insular digital groups develop unique languages which makes reintegration in shared digital spaces difficult, if not impossible. When someone believes their insular language in online echo chambers is commonplace reality, clashes ensue when that same individual is placed in a context where other people aren’t privy to their language because they are fundamentally misunderstanding one another. Often, there is little by way of shared values, goals, and culture to glue these communities together.”
✘ One of the best pieces about our developing internet culture I’ve read this year. Interestingly, it comes from one of my favourite digital groups on the Internet: Folklore.
⛵ Music of the Sails turns Sydney Opera House into an audiovisual performance lasting 744 hours (Sam Willings)
“For its 50th birthday, the Sydney Opera House has become its own musical instrument in Music of the Sails. With a combination of machine learning and human creativity, the Opera House is making a generative soundscape lasting 744 hours, which it says “will dynamically recompose the everyday data flow” of the building.”
✘ I just thought this was very cool. Both in the way they used generative AI to augment human creativity and how it created a month-long exploration of a physical place through audio.
👋🏾 hello humans: welcome to FOLK (MacEagon Voyce et al)
“Many folks’ main beef with artificial intelligence is that it affronts our sanctimonious sense of intellectual property – our own individualized creative intelligence. Machines learn from copyrighted information and then use that as the basis of new material, how dare they! It’s worth taking one humbling step back to admit that that’s how we work, too. We are memetic beings.”
✘ Another deeply interesting experiment focused on how we can do things together instead of alone. I’ll be following along closely to see how their first experiment, which rails against copyright, will unfold.
🎮 Machine Learning is changing adaptive music for video games (Ezra Sandzer-Bell)
“Game music will be undergoing another round of improvements in the near future, as machine learning and generative algorithms become a core part of how games are composed and delivered. Twitch streamers and their audience will benefit from these advancements as well.”
✘ I’m a strong believer that music in games will change a lot in the near future and this article reinforced that belief. It goes into various ways that machine learning will help to bring the audio and music in games ever closer to the gameplay, creating more reactionary and immersive environments.
💵 Spotify is changing its royalty model to crush streaming fraud and introduce a minimum payment threshold. Its plan? To shift $1 billion in payouts towards ‘working artists’ over the next 5 years (Tim Ingham)
“In short, the three changes are:
Introducing a threshold of minimum annual streams before a track starts generating royalties on Spotify – in a move expected to de-monetize a portion of tracks that previously absorbed 0.5% of the service’s royalty pool;
Financially penalizing distributors of music – labels included – when fraudulent activity is detected on tracks that they’ve uploaded to Spotify; and
Introducing a minimum length of play-time that each non-music ‘noise’ track must reach in order to generate royalties.”
✘ Another sign of maturity from Spotify and them looking at those marginal gains. Of course, they know how to wrap up these changes to make them look good and with a particular focus. In the end, we’ll find out who these changes benefits the most. For now, it’s another sure sign that streaming is at an inflection point.
It feels poignant to highlight the re-release of The Circular Temple by Matthew Shipp. First, it’s a watermark record in the pianist’s career. Perhaps not just his career, but for the development of jazz in the late 20th Century. Either way, I adore this record, and especially the track highlighted below. Second, Shipp gets a wonderful write up on Bandcamp Daily, which we’re unsure how that will continue.