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.

Art Frames

It’s a damn shame that people need to be reminded to “reframe music as art, not content” – as Rob Abelow recently urged in a pithy tweet.

It’s a nice thing to be reminded of, but – you might ask – does that distinction really matter? Conceptually, of course it’s richer to think of music as art, but there are also policy considerations. 

Obscene content can be legally restricted, for instance, but at what point does it become artistic expression, which can be protected under free speech? Which photos are – and aren’t – protected by freedom of the press and which are subject to content moderation? What’s street art and what’s graffiti? All these things exist on a spectrum, of course, which makes clearcut answers difficult to find.

So even if we, the appreciators, consider music to be art – even if we always have, what about the policy that governs such things? When it really matters – and it does – how do we ensure that we can frame music as art?

‘Domestic Gain and International Pain’

Last October, Uruguay introduced legislation for “equitable remuneration” for musicians. There wasn’t clarity, however, on whether it “applied to music streaming services” or “whether the increased royalties for musicians would come out of the streaming services’ share or the rightsholders.’”

Due to that mirk, Spotify threatened to “quit Uruguay,” suggesting that any additional revenue taken from their coffers would make their business “untenable,” and that the move was “to the detriment of artists and fans.” 

The bill passed anyways, but when Spotify did indeed “quit,” “clarification” emerged in Spotify’s favor, ruling that the increased royalties would come out of the rightsholders’ pockets. As Music Ally noted, “Uruguay is an example of what could happen in much bigger markets if it’s not made clear whose share is reduced in order to pay artists more.” 

Music researcher Brodie Conley referenced the South American country’s predicament – which was Music Ally’s latest country profile – in connection with a new bill in his native Canada.

In 2023, Canada’s Online Streaming Act expanded the power of the federal broadcast and telecom regulator – the Canadian Radio-television and Telecommunication Commission (CRTC) – to include online content.

The CRTC’s first regulatory change just arrived. The commission is demanding that digital service providers (DSPs) – that 1) aren’t affiliated with a Canadian broadcaster and 2) generate more than CAD $25 ($18.3 million) in revenue  – contribute five percent of their revenue to programs designed to support Canadian creators. 

Amongst those programs are local radio stations, the Indigenous Music Office and a new fund to support Indigenous music. One-and-a-half percent will also go toward “a new temporary fund supporting local news production by commercial radio stations.”

In part, the law also seeks to rectify a reality where Canadian artists only account for about 10 percent of Canadian music consumption – for comparison, in the UK, it’s 40 percent.

These are valiant intentions to protect local and marginalized art (or, I guess, ‘online content’), but many new media and tech companies oppose it because they deem “CanCon” rules to be incompatible with the “open, globalized world of the Internet.” 

The Vancouver-based Nettwerk Group, for instance – the umbrella company for Nettwerk Records, Nettwerk Management and Nettwerk One Publishing – suggested that “domestic gain could result in unintended international pain.”

“Nettwerk is an unwavering champion of Canadian music,” the group wrote in a statement, but “[this bill] will hurt Canadian artists and Canadian music companies, not help them.”

Nettwerk suggests the Canadian government has a “fundamental misunderstanding” of the music industry:

Adding to the argument, Spotify’s Chief Economist Will Page said back in April: “To illustrate this point, go back in time and think of your local record shop: If they’ve noticed that you’ve purchased an album by a promising Canadian act, rather than saying ‘you’d also love this amazing British act,’ regulating the algorithm could be compared to restricting the store owner to saying ‘you might like this other kinda similar fellow Canadian band.’”

Global exposure is certainly a valid concern for Canadian artists, but Spotify clearly has ulterior motives in painting an artist-first narrative: money. And since its victory in Uruguay, Spotify has been emboldened in its approach to affecting national policy.

When France proposed a similar “streaming tax,” the company pulled its support from two French music festivals (and subsequently increased subscription fees in France by 1.2 percent to offset the levy’s effect on its bottom line).

Now in Canada, the company’s language is much the same: “In a devastating blow to artists, the Canadian government chose the past over the future by demanding that streaming services pay a protectionist subsidy to radio,” a Spotify spokesperson stated in an email to Music Business Worldwide.

Overall, big tech – the CAD $25 million-earning organizations intentionally affected by the bill – are generally pissed and content creators and unions are generally supportive. Pushback in the latter group has revolved around allocated funds – there’s an argument that more revenue should go directly to digital creators – and the fact that consumers, given what’s already happened in France, will likely eat the loss in Spotify’s profit margins.

With the UK and US governments embarking on their own policy-driven protections of musicians, there’s clearly a pattern here. And some big questions remain unanswered, which continue to crop up all over the world.

TikTok, for example, is facing a divest-or-ban law in the US, but what does that really mean when the secret sauce is owned and controlled elsewhere and the app is driven by global discovery algorithms?

California – and now New York – have proposed legislation to prohibit “addictive” feeds for minors, but how does that practically affect the app experience? Could these apps geo-gate feeds by state lines?

And even if consumers foot the bill on policy, shouldn’t Spotify’s subscription price have been way higher anyways (it hasn’t been that long since we were paying the subscription price for a single record)? And if they’re blaming the algorithm that they made, can’t they just restructure the algorithm so it says you might also like ‘this amazing British act’ and ‘this other kinda similar fellow Canadian band?"‘

In these scenarios, do maps even make sense anymore?

‘Cartographic Stasis’

Former Coinbase CTO Balaji Srinivasan cites Joshua Keating’s book Invisible Countries to showcase the peculiarities of the nation state – and why they don’t really make sense anymore but can’t escape the gravity of tradition:

Srinivasan proposes a network state – “a highly aligned online community with a capacity for collective action that crowdfunds territory around the world and eventually gains diplomatic recognition from pre-existing states.”

Diplomatic recognition makes a lot of difference – just ask Palestine. With the Ethereum ETF and Wyoming’s DUNA, are we getting closer to a blockchain-powered world whose structures are compatible with the “open, globalized world of the Internet?”

Could on-chain music protocols – like the one proposed by Oscillator, a cross-platform “data federation” layer that makes music data and identities portable and interoperable – be part of a transition from the “cartographic stasis” of siloed platforms and nation states?

What does a symbiotic relationship between digital and physical governments look like, and doesn’t big tech already kind of function as a technocratic manifestation of the former? Are we better off if Spotify has the power to strong-arm governments while their unelected CEO says things like: “Today, with the cost of creating content being close to zero, people can share an incredible amount of content…”?

Coda

A quick tribute to my uncle Joey Eberline, who died last week from a litany of long term health problems. Uncle Joe was a drummer and an inductee to Iowa’s Music Hall of Fame. He toured with the Steve Miller Band and played with artists like Chuck Berry and Diana Ross.

For 25 years, he was the timekeeper for Baby Blues & the No Attitude Band, which was fronted by his wife (my aunt), Leslie Eberline. They once beat Kings of Leon in a Battle of the Bands. And I remember being a wee lad in my grandparents’ living room, where Uncle Joe showed me how to use a drum machine.

Over time, the rise of social media made it clear that, politically, we were vastly divided. And social media’s divisive nature only made that starker. The content he often shared evolved to become God-fearing, racist, NRA-propaganda.

We weren’t in close contact, but whenever a gathering brought us to the same room, music kept us afloat. More than that, it made us feel close. Because whatever music is, it isn’t just content, and it shouldn’t be lumped in as such.

As media theorist Marshall McLuhan said: “The ear favors no particular ‘point of view. We say, ‘Music shall fill the air.’ We never say, ‘Music shall fill a particular segment of the air.’”

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.