✘ How the music industry can actually benefit from NFTs
And: Tipping point, right here; how to build an AI voice model marketplace; NFT tickets changing festival experience; Renaissance in online music communities; What happened to the creator economy?
It’s been a while since I first wrote about NFTs here in MUSIC x. At that point, I was mainly curious about the question: what’s in it for the fan? Also, knowing a little bit about copyright and its complications and density, I wondered what it would take for music NFTs to work within that system. Together with a few others, we worked throughout a season and a half of research at Water & Music on the modular NFT contract builder. We tried to make music NFTs work within the existing system. There’s a counterargument to that, which Vaughn McKenzie has put forward in his piece ‘Keep music out of music NFTs’:
“A music NFT, a token whose metadata points to a URL, could point to anything that can be represented digitally, limited only by our imaginations. But once our music NFTs point to a music file, they inherit the rules of the system they hope to offer an escape from. How can we expect to establish a better system if we begin by rebuilding the old one?”
Drawing a line
The first line to draw is that NFTs, or even the blockchain more generally as a technology, is going to change the music industry. All the incumbents are too strong and their incentives are too unaligned with the Web3 ethos. On top of that, we shouldn’t even want to rebuild the old system it’s based on, like Vaughn said. In other words, we shouldn’t try and bring the streaming economy with its fraught royalty system onchain.
So what do we do? It starts with what an NFT is, which is a token that can point to a URL or some form of media. It can also be a lot more, it’s dynamic, it’s a container that can be filled with creativity. Musicians can use it to create new artistic expressions where they utilize the tech to generate or build their music. It also allows for new ways of interaction between artist and fan, which will really kick into gear with the wallet upgrades that are on the horizon. In the latter case, it’s important to realise that the terms of those artist-fan relationships should be wholly on the artist’s side. At the same time, NFTs also constitute a new form of both monetization and rights.
Until recently, it was difficult to pin down digital rights of an object such as a recording. With the NFT that layer automatically gets added to the conversation. From the Water & Music project on NFT contracts:
Our contract template provides basic language and explanations that present strong starting points for developing NFT contracts, while also foregrounding the tensions and unsettled issues between traditional legal ownership, contract enforcement and digital, “ersatz” ownership.
So, there’s a potential for a new kind of copyright in town and we tried to fit it into the existing world. At the same time, you see forces applying pressure to fit that potential new copyright into existing structures. The potential value perhaps too big to ignore. And yet, what if we can avoid this? What if we can add to the overall revenue structures that we already have in the music industry? This should be the goal and this is what we should be building for.
But that doesn’t mean that there’s no room for NFTs in the incumbent music industries. While the entire royalty system won’t come onchain, there are parts of it that can benefit from implementing various parts of it. Let’s take the example of all those catalogue sales. There’s a lot of issues surrounding responsibility for updating mandates and claims with CMOs when this happens. It can also be that you suddenly have Hipgnosis as the songwriter instead of Justin Bieber. It’s an extreme example, but think about it. If we can create a system where each CMO has the record in their system as an NFT that can automatically update its metadata. Of course, it will remain crap in-crap out, but at least it would allow the industry to move away from putting the updating in the hands of the artist and leave that responsibility with the CMO.
Learning is important
We shouldn’t forget that every new artist or collector who comes into the ecosystem is new and needs to learn everything, from the tech to the jargon. There’s not a lot of moments in our adult lives that we’re faced with completely new structures to learn. Stepping into Web3 is one of those moments. There’s a whole ecosystem to get to grips with. It will always remain easier to keep framing that in terms of what we already know, but we should really focus on trying to see what the technology can help create anew. Only when we do that, will we actually grow the famous pie, or create a new one, instead of just figuring out ways to redistribute the current sized one.
LINKS
💁🏽 The music industry’s tipping point is right here, right now (Mark Mulligan)
“Which is why, the time is now to start building plan B. To elevate a music world centred around fandom, identity, creativity, and exceptionalism. These are the fundamentally human elements of music that can (at least for now) clearly demarcate what is inevitably going to become a two-track music world.”
✘ This can be seen almost as a companion piece to what I wrote above, but we do need to think about this now and start building for it. I’m counting on you, dear reader.
🎤 How do you build an AI voice model marketplace? (Declan McGlynn)
“Maybe I’m an optimist but I’m hopeful that models like these can give artists back autonomy over their talent. With so many legacy deals gone sour, this could be a chance to right the wrongs of the past and create a genuine new revenue stream for artists and musicians who have struggled in the age of streaming. Yes, things like sample packs have always been an option for producers, but their market was limited to their peers. This technology in its essence is truly accessible, and has the potential for incredible scale, with meaningful and dignified income for those behind the models.”
✘ This is a long one, but I wanted to share the part that showed that Declan is still optimistic. Bookmark it and read it when you have time to give this the attention it deserves.
🎫 NFT tickets will change the way we experience music festivals forever (Ashley France)
“One significant advantage is that the issuer of the ticket can control the initial and resell value price, limiting resellers who want to take advantage of buyers. Additionally, the issuer can track the seller history during resale, unlike traditional ticketing sites, enabling more consumer data collection on festivalgoers. This data can help artists and concert promoters improve and tailor their shows to their specific audience.”
✘ I often say how NFT tickets are best use case for NFTs and this article is another explainer why that’s the case. On top of that, it also shows how the tech can extend what we currently think of as the festival experience.
🌅 Modern-Day Fan Forums: The Renaissance in Online Music Communities (Nyshka Chandran)
“Today's revitalised community movement might be rooted in tech, but it's actually more centred around psychology, examining how people share ideas and innovate. Private messaging and posts–standard functions on most social platforms–are fine for discourse but not ideal for sharing ideas or jointly developing blueprints for a growing business. Author Amber Atherton, formerly head of strategic communities at Discord, recently published a book on this topic. The Rise of Virtual Communities explores the workings of Reddit, Second Life, Friends With Benefits, Water & Music and other web worlds, focusing on how they foster earnest cooperation and subvert the transactional nature of conventional social media.”
✘ Having recently written about a similar topic, this one speaks to me a lot. As with the other Water & Music curated articles in Resident Advisor this one is again a combination of a great overview of tools with practical insights and examples of how to utilize them.
🪩 What Happened to the Creator Economy? (Evan Armstrong)
“Now, enter creator economy startups. These companies are tasked with serving a market full of customers that look like this. Most will never make it, some consider it a side hustle and make very little money, and a few blow-up. Plus the things that matter most (creation, monetization, and distribution) are best served by the biggest and baddest tech companies in the world. If you’re a venture-backed business serving a market like this it is very challenging. Let’s talk about why.”
✘ This is very focused on the businesses that build the tools for creators to be able to do their work. But musicians are creators now, so it’s good to understand the changes that Evan writes about here.
MUSIC
If you’re not familiar with African Head Charge, you’re in for a treat. The first album of theirs I encountered was the 2005 Visions of a Psychedelic Africa. There’s a sonic world there that you can really get lost in. Coming Friday, they’re releasing a new record and there’s a great interview with Adrian Sherwood and Bojo in The Quietus that also serves as a helpful guide into their vast back catalogue.