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.

Lucian Grainge, the Shark

Our adventure today begins with an oft-cited Beat brigand, Lucian Grainge. The Universal Music Group (UMG) boss was profiled in the New Yorker in a humanizing piece that certainly colored my perspective – as context always does – and softened my heart toward his person. It fell far short, though, of granting him a pass for much of his business conduct – like purporting to champion artist-centric, equitable compensation models while giving himself a hundred-and-fifty-million-dollar bonus.

“It’s shocking that record-label owners are earning more out of artists’ works than the artists themselves,” Conservative M.P. Esther McVey is quoted saying in the piece, citing a Parliament hearing about Grainge’s bonus package when he took the company public in 2021. (If anything, McVey’s observation – at least regarding the major labels – is a gross understatement.)

The profile painted Grainge as an affable man of unassuming stature, belying a “killer shark” mentality and a voracious need to win. “Winning means more to him than to almost anyone else I have met in the music business,” one British music exec told the piece’s author, John Seabrook.

Two days after the profile was published, the shark attacked, and UMG announced that all its music would be removed from TikTok.

TikTok expressed disappointment, citing UMG’s “greed” and “self-serving actions,” while the the label hid behind its standard lip service: “TikTok’s tactics are obvious: use its platform power to hurt vulnerable artists and try to intimidate us into conceding to a bad deal that undervalues music and shortchanges artists and songwriters as well as their fans,” UMG said in an open letter. “We will never do that.”

Music systems savant Dan Fowler applied a “machiavellian lilt” to his take: “Lucian deciding that last year's activity broke Spotify and potential AI disruption enough to give them a foundation to start a hot war with the party that's been high on their hit list for a long time, TikTok.” 

He continued, “This is what universal, and to a lesser and also equal extent, all rightsholders do. They can wait until the time is right, let a platform grow and be fully dependent, and then hit the red button, pull content.”

As you can imagine, though, TikTok is not without value to UMG – it plays an enormous role in both discovery and marketing for the label’s artists. UMG knows that, but they also understand their leverage, and Grainge saw another opportunity to win.

Fowler predicted that, a few months down the line, a new deal will manifest, “most likely with some form of royalty payout structure analogous to what Spotify got strong armed into last year.”

The reference is to Spotify’s 2023 rejiggering of its royalty structure. The moves were largely motivated by fraud deterrence, but the third adjustment – a minimum annual stream threshold – was perilous: any track that doesn’t hit the minimum number earns no royalties. 

As I detailed in November, the edict was cut from the same cloth as the earlier UMG-Deezer “artist-centric” boost to so-called professional artists, which halved the royalty weight of artists with less than 1,000 monthly streams and 500 unique monthly listeners. 

As MIDiA Research founder Mark Mulligan noted in his examination of that initiative, artists with under 1,000 streams represent about 80% of all artists. “It is redistribution of wealth in reverse,” he wrote, “taking income from struggling, emerging artists and sharing it among those who have already found success.” 

It’s behavior antithetical to UMG’s statement above, but that’s part of the game. This is Grainge, the shark.

Spotistans

Spotify had an eventful week of its own, teasing long-sought “superfan clubs.” The mention came in a blog post about the DMA, or Digital Markets Act – the landmark competition legislation in the EU that attempts to reign in power from big tech. The material change is that people in the EU will be able to buy and subscribe to things directly within Spotify’s app without being subjected to Apple’s 30% “app tax” – the outsized levy Apple takes for every transaction on an app downloaded from its app store.

“Thanks to the DMA,” the post reads, “we’re looking forward to a future of superfan clubs, alternative app stores, and giving creators the ability to safely download Spotify for Artists or Spotify for Podcasters directly from our site — and that’s just the start.” 

That’s all we’ve got so far, so don’t hold your breath. Spotify has a long history of teasing social features and axing them before they get fully released. But the prospect is enticing, and envisaging a refurbished Spotify is a fun – albeit quixotic – exercise.

That said, we need to do more than envisage ideals, because there are real consequences for not empowering connection on streaming services, where the music actually lives.   

Millions of artists and communities have to turn to places like TikTok to build community, but these platforms have shifted from supporting creator individuality to commoditizing creator labor in order to maintain their grasp on user attention.

And there’s no distinction between creators. Creators of all types, from gamers to musicians to writers to visual artists, have to play a zero-sum game that pits them against one another for the prize of our attention.

Unfortunately the creator economy is marked by the incentivization of over-supply: there are always creators willing to create content, and algorithmic feeds that are always ready to serve up a steady stream of alternative creators if we don’t play the game.

Catalog Radio

But in on-chain music – an ecosystem operating largely outside of the legacy rights complex, it should be said – builders are trying to change that game and build around connectivity.

On Wednesday, the music platform Catalog released Catalog Radio, “a live, 24/7 broadcast and shared listening space, dedicated to curated programming, special shows, untold surprises and experiments,” they wrote in an announcement. “All songs played are onchain, making real-time celebration and support of artistry easy and instant.”

The interface is simple, centering the music and album art while featuring a real-time chat, visualizer, a row of online listeners and a “cosign” button – a novel feature that may help redefine listener behavior.

Catalog has championed 1-of-1 records – that is, they don’t offer editions, as most other music NFT platforms do – since its birth, but they’ve been plagued by exorbitant gas fees on the Ethereum mainnet. Buying something has been akin to shopping for a CD and then learning at checkout that it cost twice as much as the sticker price.

Cosigns, though, offer an inventive solution. Releases are still pressed as 1-of-1’s, but cosigns are simple and cheap stamps of appreciation (they cost .001 ETH – a little more than two dollars currently) on Base, Coinbase’s L2 (an L2 is a separate blockchain that extends Ethereum while inheriting the security guarantees of Ethereum, and its gas fees are nominal).

Importantly, co-signs aren’t transferable, which means they can’t be the products of speculation. (Catalog takes a 15 percent cut of cosign fees while artists retain 100 percent of the proceeds from the 1-of-1 sale.) And it’s a fairly frictionless two clicks – one to press “Cosign” and one to confirm in-wallet.

When paired with the radio feature, cosigns are especially powerful. Listener appreciation – visible in the chat – elevates the music and encourages cosigns, and they can quickly yield a payout that’s equivalent to several thousand streams. Notably, the artist also has an unobstructed view of their cosigners, and can continue to build around their fandom:

“By cosigning, fans receive a high quality download, their name on the record page, and any other rewards that an artist may choose to provide to their onchain list of cosigners,” says Catalog. “We’re actively exploring other benefits and rewards for cosigning.”

More and more (actually) artist-centric alternatives are emerging. Features like Catalog Radio are reflective of the “true power shift happening underneath these major discussions about label and publishing deals between the biggest music company and the biggest social medium on the planet,” Maarten Walraven wrote for MusicX.

“The power is shifting towards the artist, they are the ones who all of us app-scrolling people respond to,” he continues. “And because of that, let this negotiation become a bloodbath, so that those with the most responsibility can rise from its rubble and take their power.”

Coda

An overdue RIP to John Juan Mendez (aka Silent Servant) and Jose Luis Vasquez (aka The Soft Moon), who died together – alongside the former’s partner – of a suspected fentanyl overdose two weeks ago.

Mendez was a mainstay of LA’s underground techno scene, as well as a member of the influential collective, Sandwell District.

And I’ve been a fan of Vasquez since the jump. With his contemporized take on post-punk and dark wave, he garnered the respect of the genres’ forebears, earning invites to open on tours for Depeche Mode and Killing Joke. I saw him play at Baby’s All Right in Brooklyn in 2016, where he gradually stirred the crowd into a roiling mass, making us forget that the world extended beyond the four walls of that small room.

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. And if you already do, consider sharing with a friend. Thanks for being here.