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.

Exposure for exposure’s sake

Music is human. It’s one of the few bipartisan beats – a cause that transcends political dogma. It’s “an important and critical part of American history and culture,” said Jim Jordan, the Ohio Republican likely to become the next chairman of the House Judiciary Committee. “It’s also a massive engine of commerce and is one of our most important cultural exports.”

Jordan’s comments were in reference to the American Fairness Act, which would require U.S. terrestrial radio to pay royalties to artists for the first time. New York Democrat Jerry Nadler oversaw the vote that sent the act to the full House.

Radio has long contested that exposure inevitably leads to sales – that it acts as an integral discovery tool. Artists argue – Matty Karas explains via his newsletter MusicREDEF – that other countries have implemented radio royalties, why can’t the U.S.? As you can imagine, this conversation isn’t new.

There’s a similar debate happening around web3 music players. “Who gave you permission to stream my music for free?” asked the artist Wayak of the web3 music player and aggregator Ooh La La. After some back and forth in a Twitter thread, Wayak requested to have his music taken down (to Ooh La La’s credit, they took it down and sent the artist a direct message to continue what is/was hopefully a productive conversation).

Dozens of artists subsequently became aware that their music non-fungible tokens (NFTs) were being streamed, too, and without their consent, culminating in a 5+ hour Twitter space with 1,100+ participants. 

The ethos of data collection in web3 is open source and permissionless, and because blockchains like Ethereum are public, anyone can technically build on top of something like a music NFT. But as the inimitable research decentralized autonomous organization (DAO) Water & Music remind us, that doesn’t preclude copyright law, which automatically confers ownership rights in most jurisdictions.

But isn’t that a good thing?

We’re still in unchartered territory when it comes to regulation, and many in web3 are exploring synergy with CC0 – aka creative commons – a copyright license that, like public blockchains, is permissionless. 

I spoke with Supertight Woody earlier this week, who just captained the release of Noun Sounds, a Nouns DAO project and music platform focused on providing free-to-use music for creators. He sees a way for NFTs to help facilitate a paradigm shift surrounding intellectual property, and he’s already released dozens of his own tracks on the platform for completely free use. (Woody is a graphic designer for DeCential Media and we’ve also used some of his music for one of our podcasts.)

“This NFT is on the blockchain, so you can prove that you own the original,” he told me. “So if you encourage people to use it – ‘Hey, go remix this, use my loops, sample it, et cetera, et cetera’ – the proliferation or the marketing of those assets then adds value back to the original.”

There’s a strong case to reassess copyright in a permissionless context – perhaps projects like Noun Sounds can create a middle ground between exposure and ownership where artists are still fairly compensated for their work. When Disaster Girl was turned into an NFT, for example, it earned $500,000 for Zoë Roth, the girl in the famous photo, a testament to the economic potential of meme proliferation (h/t to Kyle Smith for making this connection for me).

So who’s right in the exposure for exposure’s sake argument?

Back to the Wayak/Ooh La La Twitter thread, where there was another noteworthy commenter: Rory Felton. “Notify your PRO, pub admin (if you have) and SoundExchange to collect royalties from any digital service provider, Opensea included,” he tweeted in response to Wayak.

Felton is the founder of HitPiece. Earlier this year the aptly named music NFT platform was thrashed by the music industry after leveraging the Spotify API to sell NFTs without artist consent. (It’s worth noting that, similar to what Ooh La La is doing on top of NFT marketplaces, Spotify’s API is publicly available to third parties, so others can build on top of it and Spotify subscribers can stream through it. The difference, of course, is there’s a royalty system – albeit a shitty one – in place to compensate the artists who earn those streams.) Hit piece after hit piece torched the platform for their blatant disregard for copyright infringement, and the company went dark for several months.

So it was just another opportunistic NFT platform built by someone who doesn’t understand how music works, right? Not quite. Felton ran a Sony Music subsidiary for 12 years. He’s a former Billboard 30 Under 30 Exec. He may be tone-deaf, but there’s no misunderstanding here, and last month HitPiece successfully raised $5 million in a round led by Pelion Ventures. “We founded HitPiece to connect artists and fans in an empowered boundless frontier,” wrote Felton in the announcement. And it’s not without artist buy-in: Rick Ross is dropping his genesis collection on the platform.

Felton also penned a 2019 treatise on LinkedIn on what “winning” is going to look like in the music industry by 2025. He painted a hyper-competitive landscape that uses AI to assign scores to things like “artist performance quality,” leaning further into proprietary algorithms that pre-qualify how “good” something is – which is decidedly not in touch with web3’s spirit of collectivism. 

On Twitter, @thehumanfly_ resurfaced the piece to contextualize it within the HitPiece fiasco. “While I don't think he immediately has the wherewithal to do this, it does say a lot about where this music tech bro headspace is at,” he tweeted in a dossier-esque thread that goes as far as plumbing Felton’s social graph and political leanings. “It's about doing things faster, having more control over listeners' taste, and mistakenly believing that artists want those things.”

So what do artists want? And how can we empower them and their communities when the industry has reduced them to byproducts of a formulaic system?

There will be grifters, alas. And the bandwagon participation of major labels and web2 platforms will likely seek to maintain traditional power structures as they move toward web3. 

In October, WMG’s Imprint Probably a Label sold 5,555 NFTs in seven minutes for $500,000. It  used tiered NFTs to allocate three roles that emulate traditional label positions: scout, manager, and label head. NFT holders get various perks, from voting rights to dinners with execs, and now they’re going to get to participate in artist development for the first time, starting with the creation of a virtual artist.

“This is a vehicle for us to explore new ways of working as a label,” says Sebastian Simone, VP of Audience & Strategy at Warner Records UK.

The pessimist in me thinks WMG just found a way to get people to pay them to be in their focus group. The glass half full part is excited to see models like this taking root in entrenched players. Let’s see.

UMG has also been busy, launching a virtual world for its web3 label, 10:22pm, for its Bored Ape NFT band KINGSHIP, and hiring SoundCloud’s former Director of business development to be the SVP of New Business, where he will focus on “important opportunities” in the web3 and metaverse sectors.

Current SoundCloud President Eliah Seton said the next big format for the music business is fandom, which feels vague – when hasn’t the business of music been about fandom? – but likely alludes to the kind of direct connection that on-chain tokens enable. Could SoundCloud lean into web3? Perhaps referencing the tokenized community structure Mat Dryhurst proposed in 2017?

And then there are the select few artists that have little incentive to subvert the existing system. Last year Bad Bunny was Spotify’s most streamed artist with 9 billion streams. This year he doubled that, getting streamed a mind-boggling 18.5 billion times (millions of songs have never been streamed once). And in the past year he also grossed $435.38 million touring, breaking Ed Sheeran’s record of $429.5 million set in 2018 – all while artists like Lorde and Santigold cancel tours, citing financial concerns. Billboard dedicated a piece to the disparity across touring, giving it a fitting title: From the Top, Touring Looks Better Than Ever.

Kinda sounds like the world at large. Nothing against Bad Bunny (hate the game not the player), but his sustained status reveals the disappointing reality that the rich get richer. The misalignment of incentives between economic and moral success is a societal failure. We still lionize the rich and pity the poor, and mistakenly equate financial success with wisdom and wherewithal – and vice versa.

Web3 is an opportunity to reorient that misalignment, and really what artists want – like the rest of humankind that isn’t looking from the top – is equity. A level playing field. We have an opportunity for music to be steered by the people who create the most value in the industry: the artists and the communities that amplify them.

Coda

We lost some legends these past couple weeks. One was Christine McVie, one of Fleetwood Mac’s three singer-songwriters. Manuel Göttsching, too, the leader of Krautrock groupA Ash Ra Tempel, who was kept contemporary by Larry Levan in his legendary Paradise Garage sets, and later in dance remixes by the likes of Detroit techno pioneer Derrick May (h/t Matty Karas and MusicREDEF).

We also said goodbye to film composer Angelo Badalamenti, who worked most notably with David Lynch, scoring projects like Mulholland Drive, Blue Velvet, and Twin Peaks. Before you head on holiday, take a moment to warm your heart and watch the video below, where Badalamenti remembers Lynch coaxing him toward the iconic Laura Palmer theme in real-time.

See you in January. Go see some live music, and happy holidays to you all.