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.

New French Connections

For the past couple weeks I’ve been attending and writing about EthCC, the Ethereum Community Conference that takes place annually in Paris. Very little attention was given to music, but there was plenty of talk about infrastructural development that will inevitably affect music – namely the social layers that surround it and, ostensibly, enable its transmission from person to person.

Gitcoin – and now Supermodular.xyz – founder Kevin Owocki, for example, gave a prominent talk discussing the importance of decentralized social communities. And he was joined by AAVE founder and CEO, Stani Kuchelov, whose company is responsible for building Lens Protocol, an on-chain social graph that promises to transcend the walled gardens of traditional social platforms.

The talk came on the heels of Lens’s V2 announcement, which includes a number of upgrades, like ERC-6551 compatibility, which gives non-fungible tokens (NFTs) “their own social relationships, voice and monetization opportunity,” and additional composability via their open actions feature, which enables interactivity between external smart contracts, like collecting music NFTs on Lens that were minted on Sound or Zora.

Owocki and Kuchelov also announced a collaboration called Quadratic Lenster, a quadratic funding-driven social network that forks Lens and is based on the notion that “likes are the ultimate shitcoin: inexhaustible supply, non transferable, worthless.”

In many ways, collecting an NFT is an evolution of the like – an event that is limited in supply (by time or edition size), transferrable and has financial value. It’s a ‘superlike,’ of sorts, but music NFTs are not quite framed like that. They’ve been generally positioned as a purchase, which emphasizes their financial element (understandably, given the streaming economy has transformed music’s value into a flat, agglomerative “celestial jukebox” — now we’re just paying for the convenience). But perhaps imagining an NFT more akin to a ‘superlike’ would reframe its focus, where the financial component is a byproduct of music’s connective potential and not the other way around.

Quadratic Lenster is an experiment in tying quadratic funding – a design first discussed by Ethereum Founder Vitalik Buterin, Zoe Hitzig, E. and Glen Weyl that expands upon the concept of quadratic voting – to social interactions like ‘likes,’ where likes are democratized and infused with actual value (you can watch the full talk here). There are potential downsides to financializing social actions — like creating additional barriers to entry that disproportionately benefit the already privileged (like many things in crypto) — but it’s an interesting experiment that, if structured correctly, could incite new types of behavior that better allocate value in digital social environments — music included.

Where to find your superfans (?)

And interesting is the operative word. “For me, right now in music screams out for people who will do something interesting,” Maarten Walraven wrote in a recent edition of MusicX. “Often, we would turn to emerging technologies for this. But crypto, or web3, is pretty stale – even if there’s a massive opportunity to expand the modes of revenue generation beyond the existing methods.”

Luminate’s mid-year report adds weight to that massive opportunity, asserting that 15% of the general population in the US are ‘superfans’ – defined as “a music listener aged 13+ who engages with an artist and their content in multiple ways, from streaming to social media to purchasing physical music or merch items to attending live shows.”

According to the report, superfans spend 80% more on music each month versus the average US-based music listener, and yet the one-size-fits-all pricing model used by Spotify and other streaming platforms creates no opportunity for artists to cultivate and/or creatively monetize their superfans.

Spotify did, though, just raise its premium subscription price for the first time ever, introducing price hikes to every plan – from individual to family – in the US and 52 other markets. In a move that was long overdue, the streaming giant effectively increased the music industry’s top-line revenue by hundreds of millions of dollars.

Now if only we could create tools to foster that top-line revenue, where Spotify et al are just the baseline layer — the first rung in the listening experience — atop which tools can be built to cater to each tier of fandom, from casual listener to superfan. If only we could manifest the intuitive logic behind Kevin Kelly’s 1,000 true fans theory and Li Jin’s 100 true fans — that “all” creators need to do to generate a sustainable income is find their people. Despite the countless startups that have attempted — or are actively attempting — to nail “fan engagement,” the truly killer connection has remained elusive. But it will likely be by experimenting in the social layer that we finally find it.

TikTok and the future of social music

To date, though, no one has managed to effectively connect music and social at scale, or escape the misalignment that often exists between the business goals, the consumers and the creators in many ROI-driven investment models. Even the major labels – who arguably benefit most from the existing paradigm – are calling for change. Universal Music Group’s Lucian Grange has been banging that “we can do better” drum all year – although perhaps with dubious intent – and Warner Music Group, via a deeper partnership with TikTok, is alluding to similarly non-specific improvements.

A key line in the press release reads: “The deal will see the joint development of additional and alternative economic models.” Warner is licensing the repertoire of Warner Recorded Music and Warner Chappell Music to TikTok itself, its new streaming service, TikTok Music, the ByteDance-owned video editing platform CapCut and TikTok’s Commercial Music Library, which allows brands to quickly license music for ad syncs.

The goal is to “harness TikTok’s revenue generation and promotional capabilities,” the statement reads. “Artists and songwriters will have access to new ways of working with TikTok's vibrant brand partners, as well as to new fandom development and monetization features, like merchandise, ticketing, and digital goods and services, among other opportunities.”

Is TikTok Music, which has already been launched in Brazil and Indonesia, the game-changing music meets social handshake we’ve long been clamoring for? Color me doubtful. The core tenets of community rely on transparent, non-extractive, intimate relationships, and I’ve seen no evidence that TikTok embodies those principles or that it’s even possible to achieve community at scale.

Why? Because music and people aren’t homogenous, so the qualities that make them distinct can’t be captured and authentically represented at scale. Variability and customization are essential for capturing nuance and niche, and massive platforms don’t do that.

It’s telling that some of the most interesting propositions that channel these truths are coming out of UMass Amherst’s Initiative for Digital Public Infrastructure (I’ll dive into this more next week). Their foundation is the “VSOP” or “Very Small Online Platform” — or perhaps more accurately, they suggest, “Very Specific Online Platform.” It’s a model that lends credence to the importance of public goods, the incompatibility of scale and community and the role that relatively unbiased — i.e. not incentivized by financial gain — ecosystems like academia can play in affecting the models we’re playing with.

Organizations like Gitcoin and Lens are showing why web3 is fun to play with — composability and decentralization create more expansive possibilities that are better suited to nurturing human connection. And improvements in infrastructure — like account abstraction, one of the heroes of EthCC — and public goods experiments like Quadratic Lenster are cause for optimism, as the benefits of on-chain can now be more accessible to more people.

Still, it’s going to be a delicate dance — no tool can rid us of the dedicated work that building community requires. As web3 thinker Nicole d’Avis (who previously worked at Seed Club) said about “connections” during a conversation at Water & Music’s inaugural Wavelengths summit: “These things can start digitally and web3 can support that, but it's not going to take the place of that. You have to do the hard human work regardless.”

Coda

We lost a couple seminal voices these past couple weeks. One of them was Tony Bennett, whose classic croon won him 20 Grammys and sustained an incredible 60+ year career. His response to the question, “Do you ever get tired of singing ‘I Left My Heart in San Francisco’” – his signature song, first recorded in 1962 – tells you everything you need to know. He replied, “Do you ever get tired of making love?” RIP.

RIP also to Sinead O’Connor. The late Irish singer and political activist, who died earlier this week at the age of 56, was a great many things, but best known for two in particular – tearing apart a photo of Pope John Paul II during her performance on Saturday Night Live – and this beautiful rendition of Prince’s “Nothing Compares 2 U.”

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.