Will major labels ever get on board? 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.

We need a new streaming model

Happy New Year gang. I hope it was a restful and restorative transition into 2023. To kick off this year’s first Beat, here are some words from Universal Music Group’s Chairman and CEO Lucian Grainge in his annual memo to staff:

“[W]e need an updated model,” he penned. “Not one that pits artists of one genre against artists of another or major label artists against indie or DIY artists. We need a model that supports all artists — DIY, indie and major. An innovative, ‘artist-centric’ model that values all subscribers and rewards the music they love. A model that will be a win for artists, fans, and labels alike, and, at the same time, also enhances the value proposition of the platforms themselves, accelerating subscriber growth, and better monetizing fandom.”

Grainge doesn’t say anything about web3 – or explicitly propose a “how.” He simply spins a rosy “we will be working on the innovation that is absolutely essential” pledge. Is he speaking about web3, a movement that centers itself around reconceptualizing industry frameworks toward “artist-centric” and non-zero-sum-game mechanics? 

Like the other majors, UMG is dabbling in blockchain-enabled projects, but Grainge’s message is hardly an explicit embrace of web3. Really, he’s not saying much that anyone would disagree with. But how do we actually get there? And what factors might be contributing to the distance he’s putting between the organization and the status quo?

Is there too much music?

Well, speaking of subscriber growth, this past year painted a grim picture for streaming, as 2022 saw significantly less growth than each of the two years prior (the excellent MIDiA research group suggests the pandemic may be responsible for maintaining growth numbers that were as high as they were).

The slowdown is showing up on balance sheets, too. Last year at this time Spotify had approximately the same valuation as UMG – which is also a Spotify shareholder (UMG owns about 3.5 percent of the company). Now? UMG’s valuation is approximately three times that of Spotify’s. 

One rising expenditure for Spotify is its server costs. There are about 100,000 songs being uploaded every day. And yet studies indicate that people are listening to less new music than ever before. Are they related? 

The industry loves shallow catalogs – e.g. when songs work, let’s just beat them to death with remixes and tempo changes. Sped-up versions of songs are becoming more popular than the original songs, and old songs now represent 70 percent of the US music market (the new music market is actually shrinking). “The internet has collapsed linear time, making the music of three decades ago fundamentally as accessible as the music of today,” writes Jon Caramanica in the New York Times. “It has also eroded the value of newness.”

In 2017 I interviewed Ben Frost, the composer best known for scoring the labyrinthine German thriller Dark. At the time he’d made some headlines for a cherry-picked interview quote in which he essentially said there’s too much music and that some people should stop making it. 

Maybe that seems ridiculous but in the face of today’s paradox of choice and musical infinities, is that wrong? Could our predilection for catalog music stem from nostalgia – not just for the music but for a time when human selectors served us pre-qualified tunes and we weren’t reliant on black-box algorithms? Could algorithms be responsible for our perceived preference for older music? 

Back to Grainge: “In order to entice consumers to subscribe, platforms naturally exploit the music of those artists who have large and passionate fan bases. But then, once those fans have subscribed, consumers are often guided by algorithms to generic music that lacks a meaningful artistic context, is less expensive for the platform to license or, in some cases, has been commissioned directly by the platform.

“There is a growing disconnect between, on the one hand, the devotion to those artists whom fans value and seek to support and, on the other, the way subscription fees are paid by the platforms,” he continues. “Under the current model, the critical contributions of too many artists, as well as the engagement of too many fans, are undervalued.”

What does 2023 hold in store for web music?

Ok so web3 is here to save the day, right? After all, artist sovereignty, customizable and artist-determined pricing and the removal of disintermediaries are core tenets of music and web3. Is this the next model Grainge has in mind?

Maarten Walraven thinks we’re headed into a year of maturation for web3 music. Writing for Music X, he cited the Artist Web3 Strategy constructed by the NVAK Collective – a next-gen record label and artist advocacy group that’s breaking artists using web3 structures (check out their case study on the rise of artist, Annika Rose). It’s a playbook of sorts for curious artists looking to enter the fray.

And as more artists flock to web3, it’s inevitable that patterns for success will emerge and interested parties will seek to formalize those structures so they can be rinsed and repeated – and hopefully these new formulas improve upon the system Grainge censured in his memo. 

But as suggested by the title of the Music X piece – “There's no playbook to success in the music industry” – that’s not going to be altogether simple. The work NVAK and others are doing to generate playbooks for success is admirable – they’re self-help guides looking toward a more equitable reality. But consider the best possible scenario that many web3 enthusiasts envisage, where barriers to entry – e.g. the frictions of onboarding – are dismantled and the floodgates can be opened to the masses. What’s to stop the same ‘too many fans, too many artists’ issues from recurring in web3?

Is web3 music ready?

The music non-fungible token (NFT) marketplace Catalog recently published a commendable “Hidden Gems” playlist to highlight the tracks on their platform that are still without a collector. “Collectors have purchased original one-of-ones from 75% of the sound benders on Catalog. We’re proud of that number, but anything less than 100% means we've still got work to do,” reads their latest newsletter. 

Catalog curates all of its drops, which protects them against quantity problems that plague platforms like Spotify, allowing them to focus on a more intimate set of creators. And a lot of early web3 success stories come from cultivating tight-knit, intimate communities working toward a shared vision of new industry models. 

But what happens at scale? What about the sundry issues with copyright infringement where 80 percent of the NFTs on OpenSea are either fraudulent or spam? Or the data ingestion issues Jesse Grushak foresees when NFT platforms don’t have proper licensing: “This might not be an issue if you're here for the $ but for longevity this is a real issue.” 

Or the issues around artist education and misaligned expectations – on display through the Ooh La La drama I outlined in the last Beat, Ooh La La recently tweeted a thread of weary apology surrounding their misunderstood intentions, and in response, the artist Mark de Clive-Lowe summed up the disconnect pretty succinctly: “pretty wild that artists who willingly put their music on chain and are bullish about the tech are now taking issue with how their music is accessible on a permissionless technology. smdh”

So what’s the playbook? How do we work toward something better? Same as it ever was, it seems: “Set out to create the best relationships that will allow you to pull together a squad of people who can make something work together,” writes Walraven in his piece, “Let’s Forget About Scale in 2023.” “Then set out to create a world and build the right trust systems so you can distribute the ownership.”

So here’s to finding your people and building cool shit in community. The vision remains strong. Let’s be patient with one another and not fuck this up.

Coda

Back in 2010, I was working for the Chicago-based radio station WXRT. We had a tent at Eric Clapton’s Crossroads Guitar Festival, and we were doing guitar-based trivia for all the dad rock buffs in attendance. I didn’t know who Jeff Beck was at the time – and I was lambasted for my ignorance. So when I scored station DJ Lin Brehmer’s VIP pass when he had to leave early, I made sure I saw him. 

I witnessed his genius, and then got to know him. He rose to prominence with The Yardbirds alongside Clapton and Jimi Page, and though his name never garnered the same celebrity, it’s not for lack of talent. He’s one of Rolling Stone’s top five all-time guitarists and one of a handful to be inducted to the rock and roll hall of fame twice. Last week we said goodbye to him. 

If you don’t know him, give him a listen – save yourself from dad rock shame: 

See you next time. Go see some live music.