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Music Streaming in a Dream World

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“If a world is dreamable, maybe it can be dreamed into being.” This quote is from the author David Mitchell, spoken in the fantastic PBS documentary on Ursula K. Le Guin. It’s also how I’m opening this piece where I imagine how NFTs could create a better world for music commerce. Unfortunately, it’s probably only a dreamable world or, as you’ll see, an alternate universe. This vision presumes a different history. Whether we can dream it into being is up for grabs.

OK, confession time. Like you, I’m sick of hearing about NFTs. I wrote about them twice (here and here), and my feelings are well-known. You may believe NFTs are good for artists, that they introduce a technological layer that intensifies fandom, that they signal some sort of future direction in artistic distribution. Those things may all be accurate, but, honestly, most participating in NFTs right now are seen by the general public as get-rich-quick schemers at worst and privileged (or reckless) at best. The incentive doesn’t matter. It’s this perception that has writer Tim Maughan comparing buyers to Martin Shkreli and MusicREDEF’s Matty Karas calling for musicians to ‘pause’ any participation in the NFT marketplace.

Compared to a couple of months ago, the hype and interest in NFTs are dwindling. I know this because they’re no longer the topic of every other Clubhouse room (though I guess Clubhouse has receded as well). So, with the bandwagon ebbing, I figure this is finally a good time to talk about a thought experiment I ran in my head where I imagined a dreamable world. The spark was the question, “how could NFTs change music distribution for the good of everyone?”

(Before we go any further, know that I’m a dabbler, not an expert, on this topic. Please be gentle with me. I welcome thoughtful critiques and corrections in the comments.)

For this dream to work, we need an alternate timeline with two significant differences to ours. First of all, NFTs can’t be environmentally detrimental. I’m not playing along if they are. So, in our thought experiment, that problem’s solved. And secondly, the invention of NFTs and everything around them (blockchain, etc.) predates the current streaming model. That’s because I’m offering a substitute to the fraction-of-a-penny-per-stream framework firmly established in our present. 

Decentralization is the key here. Unlike DRM, which linked an MP3 to a specific device (like the iPod), in this thought experiment an audio file backed by an NFT plays on any device or software that can verify ownership. Thus the purchase of a song or an album is also the purchase of its NFT, granting access via various streaming apps. The recording artist or label sets the price and the scarcity. And the absence of scarcity is an option.

There are music marketplaces where these NFTs are purchased. These online stores can look something like Bandcamp, where the NFT buyer can download the accompanying audio or bundle it with merch. These purchases can also go through the website of the label or band — exclusively, if desired. In our dream world, there are handy WordPress plugins for this.

Here’s where we get into the cool stuff within the dream world. I mentioned scarcity. Most music releases will have unlimited NFTs pointing to the audio as the band will want as many listeners as possible. But this model also allows the possibility for limited editions. Let’s say your band wants to release a live album limited to 500 copies. You will only mint 500 NFTs, and you can price these at a collector’s price. Accompanying each with a limited vinyl version of the album, sent to the fan upon purchase, is possible, too. But the digital version has scarcity on its own.

Theoretically, band members can directly receive a piece of an NFT sale. Let’s say a band with four members makes $40 for the sale of each limited album (after any store cuts or processing fees). If the band splits everything evenly, the members will each get $10 every time an album and its NFT are sold, sent directly, and right at the time of sale. This action is embedded in the NFT’s smart contract. The band can set this split for their non-limited $5-a-pop album releases, too.

A fan (or ex-fan) can resell the limited-edition album using its NFT. This creates a digital version of the used CD bin. If the band gains popularity, then the price might go up, just like a rare album on Discogs. But unlike that Discogs sale, the band members can continue to get a cut of each resale as long as the NFT’s smart contract says so. (If there’s a physical album tied to the NFT, then the two could be resold separately. But the value is much higher if sold together.)

Let’s get back to decentralization and imagine what Spotify (as an example) looks like in this dream world. Labels and artists have the option to make their music listenable on Spotify but can set the number of listens until an NFT purchase is required.1This is similar to a feature currently available to artists and labels on Bandcamp. The band in our example sets the songs on its regular albums to play three times per listener account on Spotify — but the limited edition album songs would play only once or not at all. This way, playlists and discovery aren’t disrupted. Songs from the band’s regular albums will still play unimpeded when they show up in Discovery Weekly or Release Radar. But if a fan really likes a song, she’ll have to purchase the NFT to play it more than three times. Spotify could also act as a marketplace for these purchases (“Purchase this album to keep listening”). 

Signing up for a streaming account links your NFT wallet to the dream world version of Spotify. The platform verifies all of your NFT purchases. You can play those as much as you want. And the limited edition album is only available for listening to the 500 fans who purchased it. In this thought experiment, the same thing happens when you get an account with Apple Music or Qobuz or any streaming platform — your wallet is recognized, and you can play all your purchases in addition to whatever is available to you on the platform. Any account data, including your playlists, also seamlessly travel with you, platform-to-platform. 

That’s the idea. Decentralized streaming where labels and artists set the rules and get paid, all thanks to the often maligned NFT. It’s a hell of a dream, but even my imagination couldn’t work through a few problems with this thought experiment:

  • What’s the incentive for the decentralized streaming platforms? How would Spotify make money? They could act as a marketplace and take their cut, but they’d potentially compete with the band’s website. Perhaps there would be some type of subscription model where you’d want to use this platform because it has much better features than the others. In other words, the streaming platforms would be motivated to differentiate rather than remain interchangeable. Or the streamers could fall back on intrusive advertising, which turns this dream world into a nightmare.
  • Related to the incentive question, who hosts the audio files? The NFTs would point to audio files that listeners access through streaming platforms and apps. These could be hosted anywhere — it could even be the label or artist’s responsibility — but the bandwidth gets pricey if the songs are big hits. And, if the platforms aren’t hosting the songs, who secures the rights and pays publishing royalty? (Note that if the streaming companies aren’t hosting the audio or solely responsible for rights, their operating costs will decrease significantly.)
  • Would this create a piracy renaissance? Nothing stops a person who purchases the band’s limited edition album from ripping it off the streaming platform and making it available to all. The convenience of streaming (and the attraction of whatever unique features each platform offers) would need to be irresistible. 

On the plus side, this dream world model removes my main gripes with the NFT craze: the patronage (or get-rich-quick) aspect of NFTs and the financial inaccessibility of the technology to the ordinary fan. These NFTs can be cheap. Similar to Bandcamp’s option, there could easily be pay-what-you-want NFTs, putting the value in the purchaser’s hands. More than just the crypto-rich can participate. And the bands are only auctioning if they want to.2And I haven’t touched on the data transparency available to bands under this model — the play metrics would be incredibly detailed.

You’d think the current streaming paradigm of Spotify et al. is established — the genie left the bottle over a decade ago. But alternative experiments are happening in earnest, and interest among songwriters and musicians is high. Look at the success of Bandcamp. And there are compelling blockchain-led alternatives like Audius and BitSong. Many more prototypes and ideas are on the horizon.

It’s fun and instructive to play with alternatives to how streaming and streaming payments work today. Music streaming is a relative infant within the historical scope of the music business. There’s still time and room to innovate, to push for solutions that better serve both listeners and our music’s value. New ideas and thought experiments are necessary and I encourage you to play along. And just maybe, one of our dreamable worlds will be dreamed into being.

NFTs for the Rest of Us

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Since my last swipe at NFTs, the hype and debate have skyrocketed. Thankfully, some are looking into the ecological concerns (beyond the band-aid of buying offsets) where solutions would ultimately benefit all blockchain technology applications. And others are exploring how to use the malleable format of NFTs to create or enhance a new kind of art.  

Unfortunately, many see eight-figure sales of a digital collage, and their eyes become dollar signs out of a Looney Tunes cartoon. The overwhelming conversation around NFTs is driven by monster-sized auction results and incredulous “she got how much for what?” takes. This chatter drives the motivation of many artists getting into NFTs: it’s all about making loads of easy money.

Of course, I believe that deserving artists and musicians should be paid handsomely for their art. Duh. But if you’re looking at Beeple getting $69 million for his NFT (and a lot more is going on there) and thinking, “I need to get in on that,” you might want to examine why you’re creating art in the first place.

I’m an idealist, and I think that using the hope of an NFT payday to guide your artistic process is no different than letting a soft drink company change your song lyrics for an ad. That’s cool if you’re cool with it, but don’t fool yourself into thinking that your money-making scheme is anything else just because it’s attached to hip technology.

Seth Godin and Bob Lefsetz have written wise words on NFTs with varying levels of criticism (or realism). But I think that MusicREDEF’s Matty Karas has written the most useful critique so far on what NFTs mean for the music industry. I’m going to quote it almost in full because more people should read it:

Show me this works and I’ll believe NFTs really, truly work: Put an album up for sale as an NFT, straight up, with no bonus content, no scarcity, no exclusivity. A simple $9.99 token available anytime to anyone who wants it. Why would anyone do that?, you ask. For the same reason anyone would sell an MP3s on BANDCAMP or ITUNES, I’ll answer, with the bonus that everyone, from the artist to the songwriters to anyone else who needs to get paid, can get paid instantaneously, no waiting weeks or months, no need to ever wonder if the numbers are being reported accurately, no need to worry about someone pirating the music, and if someone wants to resell it at a discount (because that’s the only way you can resell something that’s readily available) or at a markup (because maybe one day you’ll put it out of print), the artist can get a cut of the resale either way. I get the fun of auctions and the allure of exclusivity and the dream of seven-figure transactions, and there’s a place for all of that of course … But if you’re telling me NFTs are important because they’re a way to authenticate ownership and control distribution and streamline payments, then show me they can do that without raising the price of an album from $9.99 to $9,999.99 and without creating one more experience your average fan can never have.

That’s the rub. There’s a ton of promise in NFTs and blockchain for artists and labels. The technology adds personalization and ownership to digital music and might be a path for fans to move away from the mess streaming’s gotten us into. But before that can happen, we’re going to have to stop looking at NFTs as a high-dollar fad, a get-rich-quick shortcut, or patronage from the crypto-affluent. It’s time to get into the bones of what the technology means for everyday fans, artists, and recording artists and steer the conversation toward the future.

Update → Via a recent post on David Gerard’s Attack of the 50 Foot Blockchain blog:

Put a large price tag on your NFT by buying it from yourself — then write a press release talking about your $100,000 sale, and you’re only out the transaction fee. Journalists who can’t be bothered checking things will write this up without verifying that the buyer is a separate person who exists. Just like the high-end art world!

The Hidden Value(s) of Digital Art

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My Twitter feed (among the type of accounts I follow) is filled with chatter about NFTs, those “non-fungible tokens” that are all the rage among music’s early adopter set. NFTs, as defined here, are digital representations of art (visual, audio, etc.). Though the art itself isn’t exclusive, ownership of the NFT can be. Ownership is tracked and verified on the blockchain. 

We can look at this as similar to buying a skin or virtual item in a video game — a digital totem that broadcasts status within the game. Likewise, an NFT would elevate an owner’s status among an artist’s community of fans. The buyer of an NFT might also simply want to support the artist as a patron as NFTs, often auctioned, can have large pay-outs. Or, an owner could hope to turn a profit — one can resell an NFT at a higher price, adding a speculative aspect.

That’s probably a naïve explanation of what’s going on here. I’m hardly an expert or crypto-savvy. But what I do know doesn’t leave me bullish on the mass adoption of NFTs. It’s not the digital-ness that throws me off. I’m fascinated by the potential of intangibility and decentralization. However, I see NFTs, in their present execution, amplifying some age-old problems within the music industry.

News of NFTs reaping multi-thousand dollar sales makes them enticing to artists. This model seems a solution for those struggling under the streaming economy, as a single NFT sale could pay more than millions of streams. And plenty of unknown-to-me musicians have recently done well with NFTs, boosting the platform’s independent-friendly appeal. However, as many hopeful emerging artists learned through failed Kickstarter campaigns, the success of an artist’s NFT will depend on the size (and intensity) of a pre-existing fanbase. And as soon as known and established artists catch on, it’s likely music’s 1% will dominate, just as they do on Spotify. 

There’s also the inherent class-separation of fans able to participate. It will get easier to create and bid on NFTs (right now, you’ve got to be technically in-the-know), but those strapped for cash will continue to be left out. I realize patronage has always existed in the arts — the rich funding culture — but we should examine how this tradition’s preservation is not exactly a radical move forward.

I’m also alarmed by the environmental impact of NFTs (and crypto-tech in general). Just before COVID-times, we started to see a reevaluation of a touring musician’s carbon footprint, notably by bands like Massive Attack and Coldplay. That was encouraging, as was the quick acceptance of live-streamed concerts early on in the pandemic, pointing to an alternative to exhaustive tours. But NFTs, if widely adopted, could regularly expend the same amount of energy as hundreds of ongoing tours. Duncan Geere published an informative blog post that explains this in detail: 

A single cryptoart NFT involves potentially dozens of transactions. [Computational artist Memo] Akten analysed 18,000 of these tokens, finding that the average NFT has a footprint of around 211 kg of CO2 equivalent. That’s the same as an EU resident’s electric power consumption for more than a month, driving for 1000km, or a return flight from London to Rome. And that’s just for keeping track of who owns it — it doesn’t include the energy consumption used in the creation of the work, its storage, or the website it’s hosted on.

If you’re wondering how this amount of energy is possible from a digital token, check out this video from The Guardian about crypto’s effects on the environment:

Also linked in Duncan Geere’s piece is this blog post from digital artist Joanie Lemercier — she explains why she canceled a planned NFT sale and proposes some solutions to make the technology more sustainable. And Memo Akten, mentioned in the above quote, has created cryptoart.wtf, a tool to help us “get a sense of how much carbon is being emitted by the buying and selling of different digital artworks.” 

I do think there are possibilities in the NFT model. The attraction is that there are few rules, and the medium is ripe for creative tweaking and innovation. That’s exciting. It’s young (as is crypto), and we’re all still learning. But we shouldn’t let the glow of promise blind us when there are lingering systemic problems to solve. The application of new technologies should help us find our way out rather than digging us in further.