The Beat

Welcome to The Beat, Decential’s weekly 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 – 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.

The arbitrary nature of war and NFTs

I saw Oppenheimer over the weekend, a grandiose film made all the more visceral after my recent trip to Hiroshima, where I visited ground zero of the first atomic bomb ever dropped on human beings. When there’s war at hand, it can be difficult to justify the time and attention we give to things like non-fungible tokens (NFTs).

As I write this, a meeting of authoritarians is taking place in Russia, between Kim Jong-un – who left North Korea for the first time in four years, by armored train no less – and Vladimir Putin. Assuredly, weapons are a central topic of discussion. Nuclear warfare, of course, has been an insidious shadow of the war in Ukraine, a sizable consideration that arises during talks of deterrence and provocation.

And though covering Patreon’s new chat feature or Limewire’s new AI studio feels arbitrary in the face of annihilation, so too do the political whims of zealots and egoists. A primary reason Hiroshima was chosen over Kyoto, as highlighted in Oppenheimer, is because then-U.S. Secretary of War Henry L. Stimson honeymooned there. That choosing which city to decimate can be determined by such offhand contexts is unsettling indeed.

The fingerprints of power

Everywhere we look, there are visible fingerprints from the fierce clutches of power, from Putin’s war to Elon Musk’s sudden Twitter rebrand to the budding Google lawsuit, in which the US is challenging the tech giant’s search engine supremacy.

Could Google go the way of Microsoft, when it faced similar antitrust charges in the late 90s? That litigation centered the company’s bundling of Internet Explorer and Windows, and it nearly split the Bill Gates behemoth in two. Although an appeal and settlement prevented the division, court-forced behavioral remedies opened the doors for competitors across both Internet browsers and operating systems.

Apple’s MacOS was one of the products that flourished in its aftermath, and the space for more competition helped Apple become a corporate dreadnought and the only company in the world whose market cap is larger than Microsoft. Rest assured there are now other Apples ripening on the branch, waiting to seize any newfound margins this case leaves in its wake.

For all its wealth, Apple just made minor headlines for a rather modest acquisition, purchasing BIS Records, a small classical music label out of Åkersberga, Sweden. Motives have been elusive, with theories of product differentiation and industry credibility leaving me unconvinced. Most compelling are the hypotheses that suggest dubious intent, of buying up music rights to avoid paying royalties, controlling assets that can be exploited and given preferential treatment — like replacing content they don’t own with content they do. Manipulating behavior, as Ted Gioia writes in his cogent theory behind Apple’s purchase, has proven to be the most profitable move in the streaming landscape. And when Apple can afford to buy all of the major labels without blinking an eye but instead chooses to buy this little-known entity in Sweden, it should raise eyebrows.

The new deal

Meanwhile, the most outspoken leader of those three major labels, Universal Music Group's Lucian Grange — himself a grossly overcompensated Chief Executive Officer who has demonstrated he will prioritize himself much higher than the artists he claims to represent — announced a new "artist-centric" deal with the French streaming platform Deezer.

The deal’s most salient points are the adjustments to how royalty payments are weighted. One modification finally differentiates between passive and active listening, providing a 2X boost to people who actively search for and choose a song. And while this is definitely a piece of progress, the other notable adjustment is not. There's a preferential boost to so-called professional artists that halves the royalty weight of artists with less than 1,000 monthly streams and 500 unique monthly listeners.

While there’s an argument one could make to suggest this change reduces fakes and release-spammers, it also cuts out emerging artists. As MIDiA Research founder Mark Mulligan notes in his examination of the initiative, artists with under 1,000 streams represent about 80% of all artists. “It is redistribution of wealth in reverse,” he writes, “taking income from struggling, emerging artists and sharing it among those who have already found success.”

It’s a reverse-Robin Hood that benefits labels because it benefits their artists – those who have already established a fanbase and easily surpass those thresholds. The whole ordeal, of course, is beneficial to labels, and though some of the changes are beneficial to artists, too, it’s more accurate to call this reconstruction “label-centric.”

Bieber bunco

And what of the web3 organizations that are professedly keen to disrupt the major label hegemony?

On-chain music land was abuzz when anotherblock, a web3 platform that sells stakes in songs’ future royalties, sold a small percentage of future streaming royalties in Justin Bieber’s hit song “Company.” Just like when anotherblock “dropped” “Bitch Better Have My Money” and Rihanna reportedly didn’t even know about it, Bieber was not involved.

The company leads with Bieber, of course, to increase attention and attract more sales. But it’s also misleading. What actually happened is co-producer Andreas Schuller, aka Axident, sold a percentage of his future streaming royalties on his percentage of the master rights. Each NFT cost 0.017 ETH (about $27 at the time of writing) and earns the holder 0.0005% of “streaming rights,” which is the right to revenue on streaming usage, not copyright.

All 2,000 NFTs were purchased, but nobody’s getting rich off this investment. In order for people to break even, the song will have to garner 1.6 billion streams, about three times as many as its received in the entire seven years since it was released. Good luck.

Good for Schuller for finding a way to monetize his contributions to a song after it’s long outlived its time in the sun, but it shouldn’t have to come at the expense of unaware retail investors who are duped into buying the big name. With each bit of artifice, what feels further away than ever is the spirit of the music itself – the reason we ostensibly show up to do this work in the first place.

Coda

Throughout Hiroshima’s Peace Memorial, the area adjacent to the Atomic Bomb Dome that stands as a reminder of the atrocity, calls for nuclear disarmament were omnipresent. And it’s clear why – we’ve seen repeatedly what happens when we give power to men who love power. And power looks the same at every level, whether you’re pushing the red button or deploying a marketing campaign. So when it feels tempting to give into the fatalism of scale, and it feels like small efforts lack gravity in the face of earth-shattering machinations, remember that pulling back the veil is useful no matter what. Power can be understood through the smallest of lenses, and once you’ve seen its ugly form, you can better spot the guise in all things.

Now go outside and listen to music – it’s a beautiful day.

My name is MacEagon Voyce. For more music and less noise, consider subscribing to The Beat. Thanks for being here.