Weekly Post 008: New Models of Music Release Pt. 2 - Scarcity

10 January, 2021 - 13 min read

Last week I talked about new models of releasing music styled as abundance. This came in two categories: 1) a public iterative process where there is no single, final version but rather a series of releases and revisions; 2) using generative machine learning tools to turn a track into an elongated and evolving piece of content.

Both methods of abundance work to satisfy the growing expectation of constant engagement from an artist to their audience. Hito Steyerl wrote that "[a]rtistic occupation is being redefined as permanent presence," and the methods above can be used by artists to either classify "scrap" work as Publishable Content while making use of their audience feedback, or help generate additional content externally so that artists can maintain permanent presence online.1

This week I want to talk about the flip side of abundant methods of music release: methods based on scarcity. In response to issues fundamental to streaming platforms today, there are new opportunities in non-fungible token (NFT)-based music releases that could change how music is distributed and owned.

Empty Abundance

First, I'd like to briefly cover streaming platforms as a form of empty abundance. Spotify is one of a long list of tech startups "democratizing" a good or service by making it easier to access, relying on the implicit assumption that democracy is always purely positive, while obscuring the continued or heightened exploitation of a group providing the good or service. Such is life in the gig economy, which musicians were a part of long before the concept permeated into other areas.

"Democratization" here is referring to users being able to access the whole world of music for a low fee while the artists are poorly compensated. Abundance without equity. A false abundance at that, because there's a lot more music out there that doesn't exist on Spotify! The movement toward generating scarcity may partially be a reaction against this.

The problems plaguing Spotify and other streaming services are not all novel consequences of streaming's dominance; many of them are simply a continuation of the dynamics that existed in the music industry previously.2 There are two issues inherent to the platform that are being directly addressed by new scarcity-based models: the lack of music ownership by its listeners, and the low compensation back to artists. There are other concerns about the streaming industry that Liz Pelly has covered brilliantly and which I highly recommend reading, but we'll stick to these two for now.

Media Ownership

In 2019, MySpace lost over 50 million songs from over 14 million artists that had been uploaded between 2003 and 2015. For a lot of people in my age cohort, MySpace held a very important, very nostalgic place in our hearts. But suddenly so much of the music that helped define that time and place online is just... gone.

One of the most casually overlooked yet most important downsides of relying exclusively on streaming platforms is that you don't own the music you listen to. Similarly to the MySpace data loss, if Spotify suddenly decides to shut down, all of the playlists you curated and the music you enjoyed over years of membership are lost because a server somewhere has stopped running. In a beautiful interactive narrative I mentioned in the Small Stuff of a previous post, George Larkwright describes the immense emotional downside of losing music that was important to him and stresses the importance of owning the media you love deeply:

Loss is a part of life. But there are some losses we can control and prevent.

Enter decentralized media. Two of the driving concepts of decentralization are individual ownership of data and a redundant network resilient to data loss, which both work to move beyond a "rent everything" economy. Central to a growing subculture of decentralization is the NFT, a unique asset minted on a blockchain that can be owned, exchanged, and resold. CryptoKitties were one of the first mainstream uses of this concept, but they've since become the primary method for creating blockchain-based artworks.

you might be the future of music, lil guy!
you might be the future of music, lil guy!

The crucial concept of the NFT is scarcity (finally we get to the post title!): NFTs let you embed artificial scarcity into a digital object by assigning it a public record of existence that cannot be duplicated. There's only one true original.

If applied to music, there is a recapitulation of the physicality of declining musical media in this creation of artificial scarcity. "Artificial" because it's an acknowledgement of a medium that allows for endless, lossless copies of copies while also an intentional rejection of that option. A music release using this mechanism becomes more like buying a limited-pressing record than a regular digital download.

Physicality of Music

Grammy-winning artist RAC has been at the forefront of blockchain-based music innovation, starting with a tokenized release of his "BOY" cassette on Zora. There were a limited number of cassettes available, but fans didn't buy them directly; instead you could purchase a $TAPE token that allowed a 1:1 exchange for a cassette. Why this intermediate step? The price of the $TAPE token automatically scaled with the demand for it, generating a dynamic market around the token that directly benefitted the artist.

$TAPE managed to directly couple physical musical media with a digital asset that could create its own market. It brought the hype and aesthetic of sneaker drop culture to a limited run music release that captured what would ordinarily have been resale value directly into the pricing structure itself. Important attributes of physical media have been integrated with an experimental, programmatic price model to create an entirely new method of distribution.

Important in this process is to retain the physicality of music. The importance of local music scenes to the production of good music cannot be overstated, and they're based in shared community spaces. Because NFTs are based on a programmable blockchain, they can start to have other attributes baked into them like time- and location-based boundaries that ground the music in a specific setting, creating links between the digital and the physical that make the artist and their music the focal point rather than a movable backdrop.

Outside of the 1:1 digital to physical item exchange used by $TAPE, NFTs allow for a new type of symbolic ownership of digital media that can let listeners own musical artifacts while allowing the music itself to remain public. As an example, Jonathan Mann, who has been making a new song every day for 12 years, recently started tokenizing each of the songs, turning them into individually collectable and exchangeable assets without restricting access.

RAC has extended his explorations into the NFT space by coupling music with a visual asset for a piece called "Elephant Dreams" that sold for over $26,000, and by releasing a piece of music exclusively on Twitter using a platform called Valuables that grants symbolic ownership of individual Tweets.

Valuables and tokenization in general generate markets around individual items, executing a magic trick of turning something abundant into something scarce. Instead of just being another post within a feed, posts of particular value providing project announcements or additional information can suddenly become individualized and scarce because they can have only a single symbolic owner. This could potentially lead to "meta-promotion": making carefully curated promotional announcements about a project and then promoting those promotional posts to be packaged with the true release or sold separately.

Would this be exhausting? Yeah, possibly. It extends the granularity of a singles-based music release cycle into a similar granularity of music promotion. It would be a kind of fracking where someone can mine their own feed for additional value by way of selling symbolic ownership of promotional posts.

Artist Compensation

On the history of music streaming, David Turner from Penny Fractions writes:

An artist’s income per stream varies across streaming services but one consistent pattern that was first seen with Pandora and YouTube, then repeated with Spotify, is that as these companies grow, the amount of money paid out to artists decreases. That a majority of streaming profits are only funneling back towards music’s top performers offers little reason to obsess over reforming new digital systems, since such platforms only further reinforce musician inequality. The product platform in music finally won the battle against musicians.

This is what artists are up against today: decreasing equity from increasingly dominant platforms. In addition, artists often have no control over their original work or how its used when the master recordings of their back catalogues are owned by record companies in ongoing contracts. This is why Taylor Swift is re-recording her first five albums, for example, saying "artists deserve to own their work."

As mentioned above, NFTs create verifiable ownership records that in this context could signify the rights to master recordings. Even further than that, the ability to program different rules governing ownership of these assets means that once an NFT is created for a song, it can be used to grant streaming licenses or to create a type of marketplace that can be used as a fundraising vehicle. In his article "Thoughts on Music NFTs" writer in the crypto space Matthew describes:

...the musician could use a service like NIFTEX to sell fractionalized ownership of that NFT such that after it gets locked, the fractionalized shareowners would receive license or royalty payments based on the percentage of shares they own. Think album crowdfunding where the crowd funders become shareholders in future album profit.

Despite the larger number of "shareholders" in an album's success, the incentives for fans to fund projects like this may help funnel support directly to the artists producing music rather than via 3rd party services. In addition, the streaming licenses would be purchased directly from the musician and could be programmed with potentially very specific time-based or geographical constraints on access, once again generating a kind of scarcity around a digital object and firmly grounding music in the physical world. These methods both let artists retain ownership of their media while receiving funds directly from their fans. While the infrastructure to do this for musicians specifically is still being built, this space for releasing music is one to keep an eye on.

As a word of caution though, while the ideas are compelling, to be successful in practice the mechanisms will have to be dead simple to use. When I hear "artists minting individualized streaming licenses," for example, it gives me pause. Given how many additional jobs musicians must often hold just to survive independently today (manager, publicist, promoter, accountant, designer...) they don't need "lawyer" or "programmer" to be added to the list.

To provide an example in practice, Audius is a streaming platform already in use that currently resembles most others but aims to be the first decentralized streaming platform implementing some of the ideas above. They've already started rolling out their $AUDIO token to be used on-platform and it would be a good place to plant a flag as a bridge between existing infrastructure and future decentralized developments.

At the risk of playing into what Mat Dryhurst has called "streaming fatalism", a lot of use cases for NFTs do look a lot like streaming. One difference to keep in mind is between "streaming" as a technical term purely describing how music is distributed from an artist vs. "streaming" as a stand-in for the economic model championed by Spotify. Purchasing a license to stream a new album directly from an artist with programmed time- and location-based constraints is miles away from the current detached artist-listener non-relationship that Spotify facilitates. I'm not at all claiming that NFTs are a magic bullet solution to the pitfalls of the current streaming landscape. As Dryhurst and others have mentioned before, trying to fix the current system is insufficient when compared to creating an entirely new and more equitable one. But these are still early days and I'm excited to see how far these use cases evolve.

1 I should note here that I certainly don't think the goal of being an artist should be to create a constant online presence, that's an exhausting and potentially self-destructive task. Given the expectation of such a presence on most platforms today, however, I've been interested in how artists who want to maintain one have been able to innovate new ways of doing so.

2 These dynamics as well as many of the ideas in the two preceding paragraphs are explained by Liz Pelly in a podcast appearance on Tech Won't Save Us.

Small Stuff

It's been a hell of a week, another one of those that feels like a year. Not only am I not equipped to talk about the Capitol being stormed or Trump being deplatformed, but they hardly qualify as "Small Stuff" anyway. Here are some other fun things from the week I found before doomscrolling took over.

  • There's an open call for proposals for Ender Gallery, an exhibition space and artist residency that takes place within Minecraft. I love inventive uses of collaborative online spaces, and this feels like a natural extension of the immense creativity that already exists around Minecraft. Applications close January 31.
  • OpenAI reveals DALL-e, a machine learning model trained to generate images from text, and wow it makes some very impressive stuff. The demos in the write-up are worth playing around with.
  • Japanese leather goods brand Tsuchiya Kaban creates a waterproof bag for carrying a small snowman around as part of their "The Art of Carrying" series.
  • Loomia is selling soft circuitry prototyping packs for integrating circuits into textiles. Also available from Adafruit.
  • The CIA rebranded and Twitter had a field day with it.
  • You can buy a Lord or Lady title that grants you claim to a 5 sq ft plot of land in England and lets you use Lord or Lady as your title in official documents. No nationality restrictions. It's a pretty good deal, honestly.

Until next time,

- Keaton

Tags: weekly post, music, NFTs, crypto, decentralization, music industry, scarcity