Welcome to The Beat, Decential’s bi-monthly 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 – on 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.

Please do something exciting in web3

Water & Music is in the middle of hosting their Global Music Rights academy, a seven-class course that examines “the increasingly nuanced and complicated world of music rights” through a global lens. 

We often think of music rights – and too many other things – in a western context, and in that context alone music rights are incredibly convoluted. In reality, of course, the west is but one piece of the pie, and the World Intellectual Property Organization acknowledges 193 different jurisdictions – and consequently 193 different sets of music rights and regulations. In honor of that immense breadth, the curriculum – largely curated by Maarten Walraven – highlights important, sometimes overlooked spaces like India, China, Africa and Latin America. And web3 is throwing another wrinkle into the tortuous piping of music rights (more on that in the coming weeks).

Walraven – a project lead for the music research decentralized autonomous organization (DAO) as well as the co-editor of the excellent publication Music X – is someone I often quote in The Beat. Although he writes frequently about the intersection of music and web3, he’s not a web3 music “maxi” (which I appreciate), and he considers the space with a healthy degree of pragmatism – the most recent episode of his podcast Appetite for Distraction, for example, is called “Please, someone do something exciting in web3.” 

That mindset was illustrated in a recent Music X essay where he wrote, “Web3 seems to be revisiting nostalgic brands like Napster and Limewire instead of building daring new visions. It’s not that people don’t have the will to change things, but they fall into the same old, same old traps of the industry.” Keep that in mind as we move forward.

Napster acquires Mint Songs

Last year I wrote about Limewire’s resurrection as a music non-fungible token (NFT) platform via an interview with the organization’s Chief Operating Officer Marcus Feistl. Fellow piracy platform Napster joined the fray last September when they hired Jon Vlassopulos,the former Roblox global head of music as its new chief executive officer. He was tasked with guiding the company’s web3 ambitions, which were to be housed in the newly created Napster Ventures – a project focused on acquiring and investing in “the best web3 music startups.”

Two weeks ago, Napster Ventures acquired its first web3 startup – the defunct music NFT platform Mint Songs. The plan, ostensibly, is to use its “codebase to fast-track their NFT ambitions,” posits Billboard journalist and web3 music thinker, Ben Kaspar. 

Mint Songs CHief Technology Officer Garrett Hughes will stay on as an advisor as they integrate Mint Songs into the Napster infrastructure. “As we looked for a partner that could take what we’ve built over the last two years and give artists a true marketplace for their assets where millions of fans are already active,” said Hughes of the deal, “it became abundantly clear that Jon and Napster have the vision to finally take Web3 Music to the mainstream.”

The announcement comes just five months after Mint Songs tweeted they were “officially winding down” their platform. Last September 14, Hughes and co-founder Dwight Torculas released a statement that they were locking the 100,000 NFT collection and deprecating their marketplace. 

But because the blockchain enables both immutability and interoperability, the shutdown didn’t mean the assets themselves were lost or subject to changes. A seller would simply need another interface to display and sell those NFTs. As a simple alternative, the co-founders encouraged folks to use the Seaport protocol to list them on OpenSea, the world’s largest NFT marketplace.

OpenSea and Old traps

While we wait to see how Mint Songs reemerges as part of the Napster ecosystem, let’s take a look at OpenSea, which garnered its own headlines these past couple weeks. In addition to dropping the music category from its NFT rankings, the marketplace made creator fees optional, a highly criticized move that means sellers no longer have to pay artists royalties. 

It’s a deeply disappointing development given that secondary sales continue to be one of the most convincing use cases of blockchain technology – and one of the biggest motivators for artists and musicians to on-board to the space.

So why’d they do it? Well, as Kaspar describes in his Ziggy Ziggy newsletter, OpenSea’s market share has collapsed over the past year, dropping more than 75 percent with the arrival of competitors like Blur and X2Y2 – both of whom “cut out artist royalties in a bid to attract traders,” Kaspar notes. OpenSea’s fees moved from 2.5 percent to 0.5 percent (0 percent for now), matching Blur in a clear move to regain competitive purchase.

Average royalties across Ethereum-based marketplaces have dropped from 5 percent to 2.3 percent since the summer, and they’ve sunk as low as 1.7 percent. The silver lining is that royalties will still be enforced on these marketplaces for new collections that use an on-chain enforcement tool, but that introduces yet greater friction to the process and does nothing for existing NFT creators. 

“Marketplace commissions are a race to the bottom,” says Ian Rogers, founder of the Ledger hardware wallet. Rogers believes that most collectors want to pay royalties, but they’re affected by a “but if no one else is, why should I?” mentality. 

Sound familiar? Welcome back to web2 capitalism and those same old traps: mergers and acquisitions, races to the bottom, platform optimization at the expense of creators, consumer inertia where moral decay can be excused if everyone else is doing it…you know the drill.  

Are we actually doing anything new?

In Walraven’s essay, he explores a strand of anthropology that focuses on 21st century power dynamics – specifically on the state and the rise of corporations as a counter to state power, and then crypto’s emergence as an allegory to that relationship. “When we talk about control,” he writes, “there’s usually only one way to take aim at those in control: by building something else that will ultimately absorb and reflect that same control.”

In essence, smaller groups of people are “grabbing control and taking power” away from larger groups of people. Corporations did it from the state, and crypto – through innovations like DAOs and decentralized currencies – embodies a similar dynamic.

But is crypto different? Well, OpenSea is still a corporation with investors who want to see the value of the company increase and will make product decisions to reflect that. Most web3 organizations have taken money from venture capitalists with the same entrenched power structures that built our technocratic reality in the first place. Why can’t we create better models than “the absolutely chaotic mess of rights holders and music/tech companies all owning stakes in each other” – the music industry’s wild “ouroboro” that Water & Music’s captain Cherie Hu visualized ahead of the Global Music Rights course.

In that vein, Bandcamp – who is owned by Epic Games, which counts Sony as a significant investor – announced that they’re testing a playlists feature (no word yet on if they’ll pay streaming royalties). Bandcamp has also been enlisted to curate Fortnite’s ‘Radio Underground’ in-game radio station – Fortnite is also owned by Epic Games, and again, no word yet on the royalties situation.

And we can’t forget Spotify (whose cap table includes Sony, Universal and Tencent) which is testing an AI DJ and token-gated playlists. These are just the latest tests in a long history of attempts to do interesting things that ultimately fall by the wayside because they don’t do enough to improve the company’s perilously slim margins.

Progress

Elsewhere in web3, former Warner Music Group boss Steve Cooper joined the board of the NFT platform OneOf. Bonfire released native NFT drops. Ooh La La added a direct mint integration with the Lens Protocol. Unchained – a free-for-creator distribution platform we covered last year – has moved into open beta. And Tycho re-released his album The Science of Patterns that’s only available via his Medallion-built fan portal.

Little by little.

Coda

For this coda, amidst all the corporate gloom, there is hope because there is still music. I’ll leave you with a lovely quote from Jad Esber: 

“The music you respond to most powerfully can reveal those parts of yourself that are the most “you” — those places your mind unerringly returns to when it is daydreaming or fantasizing.”

So go listen to music. Let yourself wander until the parts of you are revealed. Here’s one that does that for me: