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.

Is there such a thing as too much music?

Last week, Spotify joined the tech tumble and announced it's dismissing about 600 employees. Meanwhile the company’s market cap sits around $22 billion – a far cry from its $69 billion peak in 2019. The company’s co-founder and CEO Daniel Ek blamed himself for being “too ambitious,” and you don’t have to look back far for examples of his zeal. 

Last summer the Spotify boss said that he wanted the company to have 50 million creators by 2030 (there were 11 million in 2021). Compare that to the social music creation platform BandLab,  which already has 60 million creators – a contrast Music Business Worldwide’s Tim Ingham just made. BandLab is kind of a GarageBand tool meets TikTok ethos where music-makers of all (or few) talents can “mess around.” 

The discrepancy suggests that social perhaps is the route to success at scale, and that Spotify’s streamlined hyper-focus on consumption – one that’s axed many social tools and left thousands of unmet demands for them – may have been short-sighted. 

The wilder stat, though, is that there are 17 million songs being released on BandLab per month, far outpacing the already ridiculous ‘100,000 songs uploaded per day’ reality of Spotify and Co. 

By my calculation, at three minutes per song, 17 million is about how many songs a person could listen to if they streamed music for 24 hours a day and 365 days a year for the next 100 years. Not that I’m trying to listen to them all, but how does one navigate such a monstrous amount of content? Where does one start? And how can we possibly conceive a world where even some small fraction of those creators are earning a meaningful revenue?

Even the major labels are clamoring for changes to streaming’s pro rata model, the much maligned payout formula that only serves the artist gentry. Why are they starting to make noise now, after such a fruitful alliance? Veiled in pleas for equitability lies a simpler truth: their portion of the pie is shrinking. 

Writing for MIDiA Research, Tatiana Cirisano suggests there are numerous factors behind that change: “the growth of independent music, fragmentation of consumption, localization of music scenes, and the vast amount of music hitting streaming services.”

Both Cirisano and Music Business Worldwide’s Adrian Burger proposed a number of nuanced adjustments to the current streaming model – one of which is differentiating royalty rates between lean-in (e.g. listening to a song after actively searching for it) and lean-back (e.g. listening passively to a mood playlist) behaviors. 

It sounds simple, but Cirisano contends “this reset of the system” would support existing consumer behavior and “reward both scale and core fandom of the ‘1,000 true fans’ type.”

1,000 true fans

Web3 music builders, of course, are designing for that 1,000 true fans type, using non-fungible tokens (NFTs) and other blockchain tech to create more variable, artist-centric models. The fact that an artist can leverage something like a music NFT – which can simultaneously demonstrate status, identity and equity – to segment and cultivate their community makes seeing someone ‘actively searching for a song’ feel incidental, but major streaming platforms still have the people and that makes all the difference. That such a small change could be this valuable is testament to streaming’s failure – all of those subtle, missed opportunities to bring fans and artists closer to one another.

And for that well-established shortcoming, many web3 builders are focusing on fan-artist relationships. This is usually conceived as a well-intentioned but vague solution that fails to account for the massive issue of taking on a Spotify-sized incumbent. Then there’s the infinitely varied relationships artists can have with their audiences – ones that are difficult to make homogeneous so they can be monetized. 

“People…tend to have their own way of expressing the value they find in music, and you’ll find that it doesn’t always have to result in a transaction,” Maarten Walraven writes for Music X. “This makes it hard when you’re building a product, but it’s what makes it beautiful to build a community.”

Progressive Decentralization

In a recent essay, Variant Fund’s Jesse Walden named this new order “progressive decentralization,” seeking to “resolve this tension” between early, centralized product leadership and long-term community ownership. His Variant partner Li Jin – who has long riffed on the 1,000 true fans theory – asserted that the same logic can be applied to community-driven content creation. “Building a creative community ought to start with great content made by a small team, before relinquishing control and layering in community ownership,” she writes.

In that vein, at the top of the year, Metalabel’s Yancey Strickley released his “After the Creator Economy” essay, testifying to a new paradigm built atop collectives, where collaborative “metalabels” orient around a shared vision and work toward releases. Community ownership flows around that vision, and around that work.

Friends with Benefits (FWB), the prominent social decentralized autonomous organization (DAO), helped typify that design, building from a corps of influential culture makers and, in iterative cycles, spinning out what’s become a paragon of collaborative world building. 

One of the community’s most recent projects is List3n, an ​FWB-adjacent DAO focused on supporting emerging artists in the web3 music space. According to the proposal – which passed with nearly 70 percent of the vote – List3n is “an opportunity to signal FWB's commitment to nurturing talent and our belief in web3 as a tool which can be used to build a more equitable music industry.” It’s the latest of myriad web3 on-ramps that provide tangible benefit to musicians, a testament to the faith that builders have in this new world.

Start with the lovers

So whether  you’re an artist or a product builder, the key seems to be to start small – fuel the passionate few. “It’s better to have 100 people love you than 1,000,000 people sort of like you,” recently tweeted resident helmsman Cooper Turley, presumably quoting Airbnb’s CEO, Brian Chesky. 

Turley is also doubling down on his successful Music NFT Launchpad with a similar series targeting web3 managers – he just announced the freshman class. Elsewhere, Catalog just announced its third wave of curators – folks entrusted to invite artists to mint on the platform (I was honored to be chosen as one of them, stay tuned). And Sound.xyz rolled out Open Editions, which introduces a mechanic that leans away from drop hype and speculation, allowing people to mint as many editions as they’d like in a given timeframe. The ecosystem is maturing, and mechanics are starting to account for nuance. 

My friends outside of web3 are amazed that I’m still involved – the bear market, FTX and other markers of doom are challenging crypto’s mainstream outlook. But I see a lot of hope, and a lot of willful people stomping through the muck, side by side. People are starting to eschew the lonely ambition of genius in favor of the interdependent auspices of mutual benefit. That, in and of itself, is worth sticking around for.

Coda

For MusicREDEF, Matty Karas remembered a bit from David Crosby’s 2019 documentary Remember By Name, when he was wasted and passed out in a bathroom after having taken “everything we had and anything anybody else had.” John Coltrane, still soloing on his saxophone, kicked down the door and brought him back to life through sheer musical force.

Alas, Crosby could not be resuscitated this time, and he died on January 18. From the Byrds to Crosby, Stills & Nash (& Young) and beyond, he soared.

Let’s also remember Tom Verlaine, co-founder of seminal New York punk band Television, who died on January 28, and Lin Brehmer, the “voice of Chicago” and long-time disc jockey at trailblazing radio station, WXRT. My first job was at WXRT and I had the pleasure of working with Brehmer. He was always kind and affable and armed with stories of Hendrix- and Zeppelin-shaped encounters. He sadly passed away on January 22.

See you next time. Go see some live music.