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.

It’s been an eventful week in the on-chain music space, which isn’t something we’ve been able to say in a while. Some of the most prominent orgs made big moves, prompting hot takes – or at least guarded optimism – that we may be “back.” What “back” means, though, remains unclear.

Sound M&A

First, the music non-fungible token (NFT) platform Sound acquired Soho — a mobile platform for NFT collectors — a sign of the company’s investment in a social, mobile-first experience.

“At Sound, we’re committed to building a better future for the music industry,” the announcement reads. “Our next chapter will be focused on creating deeper connections between artists, curators, and listeners, paired with a mobile experience that facilitates these relationships and introduces novel social features.” 

It’s one of the first such acquisitions in the space — where web3 company acquires web3 company — and surely, it won’t be the last. It’s also a strategy to watch mindfully, as conglomeration is one of the web2 conventions that makes web3’s niche, sprawling and collaborative approach so appealing.

Catalog Radio

Across the music NFT pond sits Catalog. While other NFT platforms have used mechanics like open editions — i.e. releases that aren’t limited by supply (but may be by time) and tend to be cheaper — to amplify an artist’s reach, Catalog has remained committed to their 1-of-1 philosophy — one they “believe can fundamentally reshape how music is archived and valued,” they wrote in a recent blog post.

The focus of that post was the upcoming release of Catalog Radio, “a live, 24/7 broadcast and shared listening space, dedicated to curated programming, special shows, untold surprises and experiments. All songs played are onchain, making real-time celebration and support of artistry easy and instant.”

There’s another exciting wrinkle in the announcement: cosigns, a concept that thoughtfully bridges the gap between 1-of-1 releases and more expansive open editions:

Cosigns are reminiscent of the “forever” editions Sound launched back in September, but because those are free and don’t contain any audio, cosigns have more oomph. Also of note: while cosigns do cost money, they aren’t transferable, which means they can’t be the products of speculation. Catalog will take a 15 percent cut of cosign fees while artists retain 100 percent of the proceeds from the 1-of-1 sale.

(Quick note: I’ll be testing cosigns out tomorrow when I release my first Catalog music NFT.)

Looking ahead to 2024

So as momentum begins to return, how do we mark when we’re “back?” On Tuesday, I caught up with Matthew Chaim, founder of Songcamp – whose C4 camp I covered in the Beat a couple weeks ago (and has since grossed the equivalent of $40,000, a strong interest signal in and of itself) – and explored these questions.

In our conversation, a lot of hope spilled forth, and in revisiting this ongoing crypto winter, we agreed that at least part of what web3 has been experiencing is a “pragmatic correction,” i.e. a realization that the crypto bubble is real, and that we need to temper the ideals that motivate us to blow up our legacy systems – tempting as it may be. 

As Dan Fowler and Vaughn McKenzie-Landell might say, YOU GOT NO JUICE. And indeed, the incumbent institutions are rich and powerful, and they’re battle-tested. Ideals aren’t enough to supplant the powers that be. Seeking stepwise progress while working alongside them may be the only way to make headway against the prevailing winds.

Sona

In that vein, last week another player entered the space: Sona. Sona is a new web3-powered streaming service that works with the established industry. It was co-founded by Jennifer Lee – better known as the Grammy-nominated artist, TOKiMONSTA – and seasoned web3 builder, Laura Jaramillo.

The protocol was designed around two major goals: give artists access to a bigger influx of capital than they can get without a label deal or undertaking massive crowdfunding campaigns, and provide consistent revenue for every artist that participates.

The process begins when an artist auctions a SONA, an on-chain collectible that functions as a song’s “digital twin.”

Owning the SONA confers no ownership (importantly, the artist retains all the rights to the music itself), but the purchaser will get their name on the artist’s profile and, as long as they own the SONA (there’s only one per song), they share in the song’s ‘protocol generated rewards.’

While the SONA sale provides the influx of capital, the ‘protocol generated rewards’ impart the consistency. Think of them as streaming royalties. When SONAs are sold, the protocol pools transaction fees and distributes them across all artists proportional to their listening share.

It’s a similar pro rata model used across major streaming platforms, but notably, these rewards are doled out every two weeks – a far cry from the often months-long payout cadences elsewhere in the streaming world.

Unlike other web3 music projects, Sona have also built to accommodate licensed music. Sona — like web2 streaming platforms — have partnered with distributors so that proceeds can flow to existing rights holders.

“Ultimately, making [Sona] plug into the music industry has been such a saving grace because it means there's so little friction for onboarding folks,” Jaramillo told me when we connected a couple weeks ago. “We’re doing something completely different, but in a way that codes very well with what currently exists. And I think that sets us apart from other web3 crypto startups that just have a lack of understanding of how the music industry actually works.”

Coda

So are we back?

Surely there are places we don’t want to return to — take the reminder of crypto’s unenlightened era in a recent New York Times feature on Praxis, a proposed “crypto-city for tech bros” somewhere on the Mediterranean.

The project is spearheaded by the tousled 27-year-old, Sam Bankman-Fried-type Dryden Brown. According to the Times, Brown’s an NYU dropout that “isn’t a charismatic speaker or an accomplished businessman,” got fired from his last job (at a hedge fund) and still can’t tell you where on the Mediterranean the city is going to be. To date he’s raised $19.2 million.

On the web2 side of the veil, Spotify reminded us (again) why folks are exerting so much energy to create something enlightened. Last week, Spotify announced it’s letting go 17 percent of its staff (about 1500 people), its third round of layoffs this year.

Amongst those laid off was “genre alchemist” Glenn McDonald, the creator of Every Noise at Once, a “treasure map for music lovers” that allows seekers to explore all 6,000 odd genres that Spotify uses in its database. Between the Echo Nest — a music intelligence platform Spotify acquired in 2014 — and Spotify, McDonald spent 12 years at the organization. Now that he’s no longer there, Every Noise has been cut off from data updates and that likely won’t change, relegating the treasure map to archival copy that will stand still at this moment in time.

Navigating to the site’s URL currently routes to a blog post titled “The beginning of the past,” where McDonald reflects on the things he built at Spotify — amongst them Daily Mix, a genre system and many pieces of Spotify Wrapped — and whether there was some lurking antagonist waiting years to “replace [his] uncooperative insistence on using math to make musical sense with something more acquiescent.”

He continues:

Amidst acquisitions, launches and downsizes, we’d do well to look to wherever the beginning of the past lies. There, we might learn that sometimes, people connect and build something worth building — idealistic enough to gather the builders, realistic enough to actually build it.

Look further and we’ll also see that technology evolves and companies rise and fall, but “music,” as McDonald writes, “survives our fragile and temporary machines for organizing it.”

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.