Can ‘music as asset’ save the industry from streaming apathy? We’ve got you covered on the latest in music + web3 – just stick to The Beat.

Welcome to The Beat, Decential’s bi-monthly breakdown of the music-web3 byway. 

Like most things in web3, the music space moves at breakneck speeds, issuing regular bouts of hope, cringe and FOMO. That combination of qualities blur the essence of the movement – on the enduring solutions to legacy industry problems and the people building them. Let’s focus on the essence; the rest, as Alex Ross wrote, is noise.

Systems of apathy

Fallout from FTX continues. In February, Coachella partnered with the exchange to sell $1.5 million worth of membership NFTs. Many of those are now inaccessible, stuck in some balance sheet black hole alongside a few billion other dollars. What good is blockchain’s celebrated data portability if the data itself is inaccessible? Hoodwinked.

Hoodwinked, too, are all of us unassuming music streamers, says Shawn Reynaldo in his excellent First Floor newsletter. “Many of them likely want to support artists, at least in theory, but they usually wind up falling short. Why? Because they’ve been led to participate in systems that were set up to capitalize on their apathy.”

Reynaldo is describing the dynamics of streaming, where 98.6 percent of Spotify artists are earning an average of $36 per quarter. People won’t steal your records from the shop, but they may stream your music at thief rates in a normalized, legal format. That’s made easier when platforms decontextualize the artists by prioritizing playlists and lean-back listening. It doesn’t matter what you’re streaming as long as you’re streaming, they say – the ‘who’ doesn’t matter so much. Without the context, we lose the narrative – maybe we even forget there are people behind the music. 

Could web3 save the day and firmly plant humans as integral to the creation of music? (It feels absurd to have to write that.) 

The web3 SoundCloud?

In his newsletter One Big Day, Austin Hurwitz wonders if Sound.xyz is the next SoundCloud, which made comments and other social components core product features. Hurwitz identified three of the platform’s qualities – context, community, and clout – as remedies to the consumption-driven UIs of streaming platforms. He doesn’t go as far as calling Sound the Spotify killer, but he hails the service for “bringing presence back to music.”

Presence though, in the crypto world, often comes gilded in the pearly potential of profits. The web3 music platform Royal just launched its own music rights marketplace, where artists and fans can buy and sell the rights to music. In the feature announcement, Royal co-founder Justin Blau described music rights as “a new asset class” and introduced the platform’s new “portfolio view.”

With evidence that NFT collectors are earning $100k+ just flipping Danial Allan’s music NFTs, it’s not surprising to see platforms accommodate financialized behavior. Money talks. But should we be borrowing investment terms to describe our interactions with music? Did anyone categorize their CD collection as a portfolio of music assets? I didn’t.

NFTs in legal terms – blow by Blau

Justin Blau is better known by his artist name, 3LAU. 3LAU made headlines last year when he sold his record Ultraviolet as NFTs for $11.7 million. The sale was in celebration of the album’s three-year anniversary. One of his collaborators on the LP, the artist Luna Aura, is now suing Blau because he “did not seek Luna Aura’s permission or a license… to include her work in the auction, nor was Luna Aura adequately compensated for her work.”

Aura co-wrote and sang on “Walk Away,” one of the Ultraviolet singles used in the NFT sales, and owns a 30 percent publishing stake in the track. “Justin’s team tried for months to reach a deal with Flores in good faith, but she stopped responding and instead chose to file a lawsuit,” said Blau’s manager, Andrew Goldstone. 

Blau allegedly offered her a flat fee of $25,000 – though no agreement was signed – but it’s unclear whether any of this happened before or after the NFT sale. Goldstone continued: “There are no set standards for how to approach an NFT project like this, which involved much more than just the music.” 

Should ethical standards be contingent upon legal standards? “If you need an artist’s permission to use their work and you’re having trouble getting it, do you just go ahead and use it anyway?” asks Matty Karas in the superlative MusicREDEF. Indeed – are artists obligated to respond? If artists don’t want to touch NFTs with a 10-foot pole, shouldn’t that be their prerogative? Things to ponder.

Let’s throw money at apathy

Money may be an effective retort to apathy, but I’d like to borrow Maarten Walraven’s suggestion that this all works a lot better when people think “beyond their financial interest in the project.” I’m not discounting the benefit of shared equity between artists and people who buy their NFTs – just the overtly financialized messaging. 

People have always flocked to music because music is fucking awesome. Signals of identity and community naturally arise from music because, again, music is fucking awesome. The fact that we’re codifying music as a financial asset is kind of sad, but alas, the fact that 98.6 percent of Spotify artists are earning less than forty bucks a month is even sadder, so I guess let’s look on the bright side.

And the concept of composable tokens as unifying signals of fandom are definitely a bright side – as are the names who continue to buy into it. Santigold just became the most recent major artist to join Medallion, a blockchain-powered platform for building personalized fan clubs. The musician joined a diverse crew of artists – including Sigur Ros, Tycho, and Jungle – just six weeks after canceling her tour in protest of “an industry that has become unsustainable for, and uninterested in the welfare of the artists it is built upon.” Could Santigold’s path be a template used by more artists? I’m hopeful.

Coda

What to make of all this? There are some cool things happening, but everything still feels too much about the filthy lucre. Maybe I’m being naive to think we can cultivate the ecosystem with less capitalist bravado. Maybe I’m not. I see immense promise for music within web3, but only if the music is kept at the center. It’s worth keeping Brian Eno’s condemnation of NFTs – “a way for artists to get a little piece of the action from global capitalism” where “artists can become little capitalist assholes as well” – back of mind, lest we prove him right.

See you next time. Go see some live music.