✘ Utility is in the ear of the holder - emergence and communities
And: Recommender System Optimization; When TikTok Music?; A needs-driven approach to music NFT metadata; Understanding two decades of music catalog purchases; Daily active users in Decentraland
At the height of the NFT craze one of the most important words was utility. It would help to achieve mass adoption of NFTs because owning one would include something or other that the holder actually wants and can use. What utility actually was, and is, was often obscure, but it usually attempted to create value for the holder in a digital or analogue sense. The idea is great, because the value of the NFT is more than the cryptographic data it represents on the blockchain or even the jpeg or mp3/flac files that might come with it. Instead, holders also get a skin to wear in a specific game or metaverse environment. Or, holders get to claim a t-shirt or vinyl record. This being crypto, though, most of this utility aims to make the NFT itself more valuable. Beyond the idea of the digital collectible, there’s plenty of people in this ecosystem just looking to flip their NFTs for profit. Whatever the reason for adding utility to an NFT drop, and at one point it almost seemed like it was sacrilegious to drop an NFT without any utility, the actual needs of the future holders wasn’t taken into account.
All of this talk of utility actually misses out on what matters most in the Web3 ecosystem - designing for emergence. Let’s talk about this.
Utility indicates that we know what people want, but we don’t
We know there’s a growing number of people who enjoy buying physical copies of their favourite artists’ music. Vinyl, CD, and cassette sales are all up year-over-year. As such, it makes sense that for music an NFT should be seen as a digital collectible. It’s something to flex your social capital as a fan in a digital environment. But this takes away from the intentions of a lot of collectors who might simply be in it to support an artist they appreciate. Or, perhaps they want to simply support their exploration of Web3 tech. These kinds of collectors might buy a Glass NFT and never watch the video, or a Catalog NFT and never listen to the music. There is no simple answer and that’s actually not that different from most new products that come onto the market. Consider why software development teams went agile. It’s because it became necessary to find a way to iterate on development as knowledge was gained and reflection took place. It should be the same for musicians, labels, etc. experimenting with NFTs and other Web3 tools. Trying things allows us to figure out what people react to.
Discover, fail, reflect, adapt
This was the theme of a TEDx event I organized in 2017. It’s not revolutionary by any stretch of the imagination, but it’s also something that a lot of us don’t allow for. Designing for emergence necessitates it. As someone entering the Web3, whether you’re an artist, fan, collector, label, we all need to figure out why we’re stepping in. Looking back myself, it was to try and figure out why people would buy an NFT and then getting involved with some DAOs, artists and others who were likeminded or who challenged me. But, I also did silly things and stepped into things which perhaps weren’t a scam per se, but which also didn’t do anything. Let’s say good intentions don’t always pay off into valuable experiences. And yet, the opposite also happened. I made new friends, learned together with others, and developed knowledge that I enjoy sharing. It’s important to allow for that discovery, to then be okay to fail and turn that into a moment of reflection and adaption to move beyond it and try something new.
It’s exactly in these moments of experimentation that the most connections take place. In these phases, we find people who also like to hit the wall and ponder how to climb over it. Only for someone else to come along and point out that there’s actually a door you totally didn’t see before. In other words, the solutions to any problem are rarely obvious and when staring into the black hole of a problem it’s always necessary to either jump in and fail or to get some advice that illuminates another path.
Minimum viable community = emergence
This may sound wishy-washy, but it’s how I’ve seen most minimum viable communities develop. There’s never a utility to start with, but there is that human connection. It’s possible to imagine two types of communities around music in the Web3: financial and relational. I argue that where these two overlap you find your mininum viable community.
There’s no escaping the financial aspect, and we shouldn’t want to either. On the one hand, crypto financialized all relationships. This isn’t a negative; crypto music is a great way to co-fund instead of bootstrap an early-stage artistic career. On the other hand, another value lies in the relational aspect. If it’s purely financial, then any utility will be tied to the potential financial upside of the NFT involved. Bringing in the relational aspect in a way negates that pure financial aspect. It’s what allows us to allow each other to experiment. Where the two sit together is where the strongest connections are made. It’s also where there’s the highest tolerance for emergence, for experimentation, for failure.
As I’ve said before, minimum viable community is a mindset and finding that in a group of people might be the best utility of all.
Towards Recommender System Optimization. Part 2: How Can Artists Influence Recommendation Algorithms? (Dmitry Pastukhov)
“The second essential building block of an RSO strategy is on-platform optimization, drawing parallels to on-site SEO — a practice of optimizing elements accessed by the search engine directly through the website (as opposed to optimizing external signals, collectively known as "off-site SEO"). Similarly, on-platform RSO is concerned with optimizing signals that can be accessed by the recommender directly on Spotify.”
✘ This is really important research by Music Tomorrow and if you’re an artist or if you work with artists, I’d highly recommend reaching out and doing an experiment.
A needs-driven approach to music NFT metadata (Dan Fowler)
“In conclusion, we propose taking a more minimalist, needs-driven approach to ironing out a music NFT metadata schema that is grounded in the modern artist/fan journey in Web3, instead of adopting a more standards-driven approach that we have seen elsewhere in the music and tech industries. The purpose of this approach is to foster more of the creative, boundary-pushing experimentation we are witnessing in the music/Web3 ecosystem today, while ensuring sufficient interoperability, synchronicity, and continuity among future experiences built on top of music NFTs.”
✘ A subject close to my heart, this is an excellent breakdown of what could be done versus what is actually there right now. It gets quite technical, but I often say that this is the kind of stuff you need to understand if you want to operate in the music industry.
Understanding Two Decades of Music Catalog Purchases (Kaitlyn Davies, Henderson Cole, David Turner)
“The evolution of music IP from art to financial asset has had many steps, but a recent development that has significantly altered this ever-changing space is the introduction of large private capital investment in music IP. The deep pockets of these investment firms and their ferocious appetites for purchases, have inflated the values of music IP on the open market, and have allowed songwriters and other music IP owners to set high price tags for the rights to their repertoire. With streaming and other traditional music revenue streams providing paltry payouts in the current streaming-centric music economy, financial strain has led more and more rights holders to sell some or all of their IP to these large investment firms. This was only accelerated in 2020 with the coronavirus pandemic shutting down live music, which for many musicians, especially ones with robust catalogs, was their primary method of making money. But what is it exactly that these investors are buying and what are the goals of these large-scale acquisitions?”
✘ Please read this whole report, it’s thorough and will make you re-evaluate how you think about the value of music. Music as an asset class picked up before streaming and the idea of the long tail. Instead, it’s part of a kind of growing up of the recorded music industry as it moved through various stages of both popular music and technological change.
TikTok Parent ByteDance Plans Music-Streaming Expansion (Jessica Toonkel, Anne Steele, Salvador Rodriguez)
“ByteDance has discussed in recent months launching its Resso music streaming service, which is currently only available in India, Indonesia and Brazil, in more than a dozen additional markets, according to some of the people. The U.S. wouldn’t be part of this next phase of expansion but ByteDance has said it wants the service to be available globally so that users can discover songs on the short-form video app and then easily subscribe to music, they said.”
✘ ByteDance negotiating with all the rightsholders to make this happen and I’m sure it all hinges on how both sides want to leverage TikTok. ByteDance will want it to be seen as a promotional tool. The rightsholders will want it to be seen as a service that requires licensed music and thus as a revenue generator. This article does well to place ByteDance move into a broader perspective.
Daily active users in Decentraland
The initial article by Cameron Thompson on Coindesk claiming 38 DAUs
The reaction article by Robert Hoogendoorn at DappRadar on unique active wallets
The follow-up article by Cameron on Coindesk explaining how DAUs will be recalculated
✘ Data is difficult, especially if it doesn’t reflect what you’d like it to. The underlying question here is what would be a good number of daily active users for platforms like Decentraland and The Sandbox. Should we expect numbers similar to those of Fortnite or Roblox? Or is it actually okay that only several hundred or thousand people currently work inside these ecosystems until we have more seamless experiences that more people will be attracted to?
I have been blasting this record since it came out last week. It somehow seems to have found the ideal convergence of the more intense sounds of the underground but still feels like it could be storming up the pop charts (it won’t unfortunately). TSHA is amazing and deserves as many ears as possible.