How to Fix the Music Business!
As long as popular music has been around, there have been those fans who indignantly claim “I knew about so-and-so before they were famous” when one of their favorite artists suddenly gains worldwide popularity. Sometimes, these early fans feel disillusioned or even betrayed when, after years of limited fame, their favorite artist sells out and starts changing their style to pander to a mainstream audience. As an artist’s popularity skyrockets, those early “true” fans often band together to show disdain for the newer, “fake” fans.
If you’re like me, you’ve seen all of these things happen countless times. You’ve probably also had this thought cross your mind:
If there was a way to buy stock in ________ in 2011, I’d be so rich right now.
Today, the options for supporting your favorite artists are somewhat limited. Fans can directly show their support through streams & downloads, or by buying merchandise and tickets to their shows. Fans can also indirectly benefit artists simply by sharing the music they like, whether it be on social media or by word of mouth. While both of these methods are effective in benefitting the artist, neither provide a way to stake your own skin in the game of an artist’s success. Both display a one-way exchange of value.
For example, say I discovered an artist named Young Thug in 2011 and thought he was destined to be the future of rap. I decide to share his mixtape on Twitter. Even if through that post I personally make 10,000 new Young Thug fans, I receive none of the value of those fans that Young Thug benefits from. Although it undoubtedly feels good to see an artist who you’ve followed since the beginning succeed, the music business lacks the financial incentives that would yield a mutually beneficial consumer/artist relationship.
What I’ve essentially provided in this scenario for Young Thug is a wealth of attention, and in an information-driven economy, attention is the most valuable currency. For a recording artist, this attention translates into more streams, ticket sales, merchandise sales, followers, and at the end of the day, dollars.
Now imagine if there was a way to directly monetize and compensate my contribution to Young Thug’s rise in popularity. Imagine if, having recognized his genius in 2011, I had been able to put my money where my mouth is, betting that others would soon recognize his genius as well: giving me a direct incentive to share his music with as many people as possible. This would be in Young Thug’s best interest as well, because if his loyal fans have more than just pride to gain when they see him go multi-platinum, they will be even more active in getting his music out there.
Creating a way for consumers to share in both the up and downside of an artist’s popularity economically incentivizes them to spread the artist’s music, allowing them to actively contribute to their rise to popularity. This opens up a whole new set of economies around the sharing and consumption of music. Avid music aficionados could become like independent A&Rs, betting on the success of little-known artists and then working with them to facilitate it. With the ability to put their own financial skin in the game, people can be actively engaged in getting an artist’s name out, rather than passively sharing it with a few friends. Eventually, this could all but eliminate the need for viral online marketing campaigns by new artists, as good music will increasingly speak for itself and word will travel fast of the opportunity to bet on its rise in popularity.
Why is this important?
As a huge music guy for the majority of my life, I have been around for the rise and fall of many fleeting trends. One unfortunate trend that has not only stuck around, but been exacerbated by the ubiquitousness of technology, has been the formulaic commercialization of the industry. Each year the industry grows more phony, rewarding the “artists” who are able to garner the most attention- regardless of whether this attention is positive or negative.
This is a result of our information-saturated lives. The human brain can only process data so fast. It would be nearly impossible for even the most dedicated music listeners to sift through and effectively curate the vast amount of new music coming out on a daily basis. This is why streaming platforms like Apple Music and Spotify now provide pre-curated playlists based on moods, genres, and the newest releases.
Since no individual has the time to keep up with the rampant releases, most are satisfied letting these streaming platforms do the taste-making for them. However, this creates an asymmetry of power. The handful of curators working on making the playlists don’t necessarily have to worry about putting the best music in their playlists- just the music that will garner the most streams, and the most attention. When the artists we consume and interact with are predominantly curated by monolithic companies with only their bottom lines in mind, those artists are going to be the ones who are algorithmically designed to hold our attention the longest. At the end of the day, this rewards the most outrageous and attention-grabbing artists in favor of ones actually making exceptional music.
“What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention, and a need to allocate that attention efficiently among the overabundance of information sources that might consume it.”- Herbert A. Simon
The answer: Incentivized Curation
Now back to where we started: Financial incentives for skilled curators. As long as they receive no tangible compensation for the consumer/artist value exchange, consumers will be willing to allow record companies, blogs and streaming platforms to curate their music tastes for them. However, if you give consumers a way to stake their own money on the success of an artist and share in the potential upside, they will have a much more active role in curating a portfolio of artists that they believe in. This flips the current industry model on its head, where consumers are spoon-fed a slew of superficial artists with attention-grabbing names and appearances, but whose music severely lacks in substance and replay value.
How is it Possible?
Thanks to emerging financial & cryptoeconomic primitives, we can now make these incentives a reality. Using a TCR (token-curated-registry) with a curved bonded token, we can design a platform where users could stake a digital asset like Ethereum to receive a native project token, such as a token specific to a certain artist. These artist tokens will be created and dissolved as artists are added and removed from the Soundcurve TCR, where curators will stake their Ethereum. The Ethereum is locked into a smart contract in exchange for the native artist token. Once one person has staked their Ethereum for the artist token, each subsequent staker will have to pay a slightly higher base Ether rate for each artist token, thus generating a profit for the earliest stakers. As more curators find out about hot new artists, they will continue staking more Ethereum, gradually increasing the value of each artist token along the bonding curve. Prudent curators will find promising artists early, stake their Ethereum for the artist token, and then sell their artist token back for an Ethereum profit at peak popularity.
Now, instead of griping about an artist being a sellout, curators can exchange their artist tokens and search for the next artist to blow up.
Curved bonding rewards the people who can discover artists with the most potential the earliest– similar to how the A&R industry once worked in theory. Now however, with the music industry relying on viral meme marketing to promote less and less substantive music, the importance of talent is at an all time low. A platform like Soundcurve has the potential to reverse these effects, as it allows a decentralized group of curators to decide for themselves which artists deserve popularity, and gives them stake in the game of their potential success. It also allows adept curators to share in the financial success of their favorite artists as a function of the additional attention that they are able to generate.
Eventually, artists could also receive a small royalty percentage of each sale of their native token in the Soundcurve TCR. This feedback loop of artists promoting their music and curators promoting the artist’s token will work as a data-processing machine much more efficient than the brain, making it easier for casual listeners to find good music as well as rewarding curators for their belief in an artist.
As the world becomes increasingly tokenized in the coming years, I believe we will see this exact same incentive structure being used to disrupt a variety of different industries. Curved bonding is already being implemented to incentivize the curation of data sets with Ocean Protocol, and we are just beginning to realize the vast potential use cases for TCRs in curation markets. This Crypto Against Humanity game is using bonding curves to give creators the opportunity to share in the value of the cards the community finds valuable. Utilizing these primitives makes perfect sense to me in the context of artist curation, especially as the market becomes increasingly saturated, and it feels increasingly impossible to self-curate.
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For more on the cryptoeconomic primitives discussed here, check out this thread.*
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