A company like Spotify's selling point is the proprietary algorithm by which it curates music for its users, and it generates revenue (although it has never turned a profit) by farming data from those users and selling it to advertisers. The business model has very little do with consumers loving music and paying for it accordingly; this is why Spotify is moving so aggressively into other mediums like podcasting and audiobooks, and why artists are seeing less money for their work then ever. A higher order consequence of this business model is that a lot of consumers probably won't ever go back to paying for music, at least not at the scale that they did before Spotify et al became the dominant media platforms.
Your vision of a blockchain-oriented modern arts economy runs completely counter to this model, and seems to propose an alternative by which artists might be appropriately compensated for their work again, but I disagree with some of the key premises to your argument:
First, I think it remains to be seen that the Blockchain and cryptocurrencies are truly as decentralized as they claim to be. User access to the blockchain and crypto wallets is currently controlled by companies, just like everything else on the internet, and it seems completely possible that artists could run into problems dealing with these mediating actors just as they do now with record labels and managers. Furthermore, the vast majority of the most valuable cryptocurrencies (BTC, ETH, etc) is held by an incredibly small minority of people, which inevitably leaves the emerging NFT marketplace vulnerable to manipulation by these large holders.
Second, I disagree with the implied premise that consumers in the age of Spotify will readily adapt the hyper financialized, web3 approach to artistic consumption that you lay out in your letter: for all of Spotify's problems, using it is an incredibly frictionless experience. In contrast, crypto wallets are still clunky and inefficient to use; I'm sure you've seen the video floating around of someone trying to buy a beer with BTC in El Salvador, where BTC was recently made legal tender. I'm sure that the user experience for small-scale crypto transactions will be cleaned up over time, but the "proof of work" tech so central to the blockchain as it exists today runs completely counter to one of the key aspects of streaming that makes it so popular today.
Blockchain is a bit of misdirection in terms of a tokenized economy, music or otherwise.
"The Blockchain" (and its associated BTC/Shitcoin ecosystem) is just one form of Distributed Ledger Technology that can implement tokenized assets with a cryptocurrency ecosystem.
Blockchain is arguably demonstrated to be the worst form of a DLT for many reasons: slow, inefficient, energy hungry/abuser, environmentally unsound (POS/POW/POStorage++), security holes you can drive a truck through, expensive fees++.
See hashgraph based Hedera tokenization paper, for one example of a far better technical solution to the problems inherent in a blockchain approach: https://hedera.com/use-cases/tokenized-assets
Of course, one massive prop holding up the BTC/Blockchain "economy" are the huge amounts of VC funds invested into it (~$30Bill+ iirc), which explains all the "web3" (sic) Fomo now being pumped out. Buyer beware.
In this scenario, how are artists developed, or is the assertion that we can really rely on the self-taught bedroom producers? What of the George Martins / Brian Epsteins? Is Billy Eilish as good as a Beatle? Where the Beatles of Please Please as good as the Beatles of Rubber Soul? And does this on-boarding of multi-tasks now left to the musicians somewhat dilute the music making and therefore quality? Would Bach be Bach if he had to worry about mixing and producing his music in addition to composing it?
TG: "I envision money for recordings going directly from fans to musicians, via smart contracts on an Ethereum-based system, with no record label or band manager touching it." This presumes that musicians can conduct business without labels or managers, that labels and managers are superfluous, and that both rake in percentages without actually providing any service to the artists. Are you serious, Ted? Is this what you've learned in decades of writing about the music business?
I am not well-versed in the details of NFTs and blockchain. I would like to have the value chain explained to me. Is the NFT being sold a song or album? Can millions of people have a claim to the same song/album? Or is the NFT some piece of fandom that is unique, like an autograph - and would every autograph NFT be individually signed (as would happen in real life) or is it just a single autograph every buyer "owns"? How could intermediaries vet and promote talent - something one is supposed to be getting from a record label. Or is everyone a musician and I have to sort out the wheat from the chaff? Would I have to buy the item to see if it is any good - if so, I am likely to be paying good money for a lot of bad art. Lastly, why just Ethereum - isn't that picking a Web3 winner instead of being able to use any type of blockchain coin? And how do we keep Open Seas from being the single clearing house for NFTs??
Not sure how speculative tech that consumes absurd amounts of computing power nets out as better than, say, Bandcamp where the artist gets 80% of payments from fans... using existing currencies, payment providers, security and so forth.
I LOVE these ideas about the blockchain and music and I sincerely hope your response did make a difference. Time will tell, I guess...
A company like Spotify's selling point is the proprietary algorithm by which it curates music for its users, and it generates revenue (although it has never turned a profit) by farming data from those users and selling it to advertisers. The business model has very little do with consumers loving music and paying for it accordingly; this is why Spotify is moving so aggressively into other mediums like podcasting and audiobooks, and why artists are seeing less money for their work then ever. A higher order consequence of this business model is that a lot of consumers probably won't ever go back to paying for music, at least not at the scale that they did before Spotify et al became the dominant media platforms.
Your vision of a blockchain-oriented modern arts economy runs completely counter to this model, and seems to propose an alternative by which artists might be appropriately compensated for their work again, but I disagree with some of the key premises to your argument:
First, I think it remains to be seen that the Blockchain and cryptocurrencies are truly as decentralized as they claim to be. User access to the blockchain and crypto wallets is currently controlled by companies, just like everything else on the internet, and it seems completely possible that artists could run into problems dealing with these mediating actors just as they do now with record labels and managers. Furthermore, the vast majority of the most valuable cryptocurrencies (BTC, ETH, etc) is held by an incredibly small minority of people, which inevitably leaves the emerging NFT marketplace vulnerable to manipulation by these large holders.
Second, I disagree with the implied premise that consumers in the age of Spotify will readily adapt the hyper financialized, web3 approach to artistic consumption that you lay out in your letter: for all of Spotify's problems, using it is an incredibly frictionless experience. In contrast, crypto wallets are still clunky and inefficient to use; I'm sure you've seen the video floating around of someone trying to buy a beer with BTC in El Salvador, where BTC was recently made legal tender. I'm sure that the user experience for small-scale crypto transactions will be cleaned up over time, but the "proof of work" tech so central to the blockchain as it exists today runs completely counter to one of the key aspects of streaming that makes it so popular today.
Blockchain is a bit of misdirection in terms of a tokenized economy, music or otherwise.
"The Blockchain" (and its associated BTC/Shitcoin ecosystem) is just one form of Distributed Ledger Technology that can implement tokenized assets with a cryptocurrency ecosystem.
Blockchain is arguably demonstrated to be the worst form of a DLT for many reasons: slow, inefficient, energy hungry/abuser, environmentally unsound (POS/POW/POStorage++), security holes you can drive a truck through, expensive fees++.
This article is a good breakdown: https://blog.dshr.org/2022/02/ee380-talk.html
See hashgraph based Hedera tokenization paper, for one example of a far better technical solution to the problems inherent in a blockchain approach: https://hedera.com/use-cases/tokenized-assets
Of course, one massive prop holding up the BTC/Blockchain "economy" are the huge amounts of VC funds invested into it (~$30Bill+ iirc), which explains all the "web3" (sic) Fomo now being pumped out. Buyer beware.
In this scenario, how are artists developed, or is the assertion that we can really rely on the self-taught bedroom producers? What of the George Martins / Brian Epsteins? Is Billy Eilish as good as a Beatle? Where the Beatles of Please Please as good as the Beatles of Rubber Soul? And does this on-boarding of multi-tasks now left to the musicians somewhat dilute the music making and therefore quality? Would Bach be Bach if he had to worry about mixing and producing his music in addition to composing it?
Ted, what about the resurgence of Vinyl? How does that relate to this topic?
TG: "I envision money for recordings going directly from fans to musicians, via smart contracts on an Ethereum-based system, with no record label or band manager touching it." This presumes that musicians can conduct business without labels or managers, that labels and managers are superfluous, and that both rake in percentages without actually providing any service to the artists. Are you serious, Ted? Is this what you've learned in decades of writing about the music business?
I am not well-versed in the details of NFTs and blockchain. I would like to have the value chain explained to me. Is the NFT being sold a song or album? Can millions of people have a claim to the same song/album? Or is the NFT some piece of fandom that is unique, like an autograph - and would every autograph NFT be individually signed (as would happen in real life) or is it just a single autograph every buyer "owns"? How could intermediaries vet and promote talent - something one is supposed to be getting from a record label. Or is everyone a musician and I have to sort out the wheat from the chaff? Would I have to buy the item to see if it is any good - if so, I am likely to be paying good money for a lot of bad art. Lastly, why just Ethereum - isn't that picking a Web3 winner instead of being able to use any type of blockchain coin? And how do we keep Open Seas from being the single clearing house for NFTs??
It's all Greek to me.
Not sure how speculative tech that consumes absurd amounts of computing power nets out as better than, say, Bandcamp where the artist gets 80% of payments from fans... using existing currencies, payment providers, security and so forth.