The Fatal Flaw In Music NFTs: Rethinking Web3's Approach
A fundamental reevaluation of how music as an art form is perceived and valued is needed in the new digital era.
The emergence of digital art through NFTs represented a significant, yet fairly natural evolution for those already familiar with blockchain concepts and the art market. For collectors and artists accustomed to high-value physical art, this transition didn’t necessitate a drastic mindset shift. Instead, it offered an expansion of existing appreciation for art’s value into a new, digital form. This new concept particularly resonated with collectors in the crypto space, who were drawn to the potential of creating a new digital art world. It was less about altering perceptions and more about broadening the horizon of what art could be in the digital age.
In contrast to visual art, music’s journey through the digital era, especially via streaming platforms, has taken a different path. The focus on widespread accessibility at minimal cost has led to a devaluation in its perception for over more than two decades.
Fundamentally, both digital visual art and digital music exist as files — a JPEG and a WAV file both are simply digital files. Furthermore, anyone can view visual art online for free, much like listening to a track via streaming services. However, the cultural perception has not aligned music with the uniqueness and ownership associated with digital art, marking a distinct divergence in how these art forms are valued digitally.
Music also faces other unique challenges in the digital art space. Unlike visual art, which can be instantly appreciated on a phone screen or in a digital gallery, music requires an environment conducive to experiencing its sound quality and nuances. The intricacies and craftsmanship in a musical piece cannot be discerned through a simple glance or listening through iphone speakers. This lack of immediate, sensory engagement puts music at a disadvantage compared to visual art on digital platforms. Additionally, unlike most visual artists who create every aspect of their work, many (I would venture to say most) musicians rely on collaborations for key visual elements like album covers and music videos. This reliance on teamwork, involving record labels and various other creative minds, is usually not a singular artistic vision and concept like that of a visual artist. Competing with standalone visual artists, who have solely focused on developing their craft, adds to the difficulty and complexity.
Over the past three years, I’ve witnessed the music NFT scene as a testing arena, yet none of it has resonated with me…at all. The dominant trend seems to be producing more utility-focused tokens and issuing large numbers of music NFTs at minimal costs. This trend, particularly platforms pushing for $1 mints and below, suggests just another race to devalue music as an art form. It’s essentially the Web2 mindset reincarnated in Web3, with just a twist.
Traditionally, music’s value has been tied to its mass appeal and widespread accessibility. This collective understanding has led many to view music primarily as a product for widespread consumption, overshadowing its potential as a high-end collectible art form. But, it could be.
This perception is not an inherent characteristic of music but a consequence of the circumstances under which the music industry has operated. Had the technological landscape, particularly the early days of the internet, included mechanisms like blockchain, the story might have been different. Music might have been perceived and valued more akin to visual art — as individual, collectible works, each with its own unique worth in addition to the mass consumption via streaming. But, it didn’t go that way.
Drawing parallels between music and visual art reveals a striking discrepancy in how their original creations are perceived. Visual art, for instance, also often extends its reach through prints, t-shirts, or other mass-produced items as well. These derivatives, while popular and widely accessible, don’t diminish the value of the original 1 of 1 artwork. The original remains esteemed and valuable, distinct from its more accessible reproductions.
This same principle, just isn’t applied to music, particularly when considering original recordings or masters. The question then arises: why is the original recording or master in music not viewed with the same reverence as a 1 of 1 artwork?
This discrepancy is largely attributed to the business strategies adopted by music platforms and record labels. The approaches of these entities are driven not only by cultural perceptions but also by the practical necessities of their business models. In fact, it’s evident that these strategies have been the root cause of the current perception in the first place. Rather than just reflecting existing cultural views on music, these business models have actively shaped and reinforced the idea that music is less a collectible art form and more a commodity for mass consumption.
Business Models and the Trend Towards Accessibility
Given this foundation, it becomes clear why music NFT and streaming platforms have evolved as they have. Their development and strategies are deeply intertwined with their business models, which prioritize expanding their user base as widely as possible. This focus is rooted in simple business logic: more users lead to more transactions, and consequently, more transactions drive revenue and growth. Such a model is designed to maximize accessibility and participation.
This approach inevitably leads to the prevalent trend of $1 mints and high-volume releases, a pattern mirroring traditional platforms but now replicated in Web3. It’s a model that inherently favors quantity over quality and completely defeats the purpose of it being an NFT. So, you’re just supposed to sell as many as you can at $1? That’s the game? Inevitably, everyone just undercuts everyone else in another race to the bottom. Also, the higher the quantity you sell, the more any sense of provenance and value for the collectors is diluted. There is no way this works. It’s just dumb and a terrible model for the artists. Period.
Sure, it’s fantastic if you’re the company or the brains behind it — inflate the value, sell off the company, and get absorbed by some larger corporation, just feeding into the same consolidation we’ve always seen. But let’s be clear, this isn’t about revolutionizing the game or shifting the paradigm from what we’ve always known. Don’t fall for it.
I address this actually in my other article on the concept of “Moloch” and game theory gone awry, where the pursuit of individual advantage within a competitive framework leads to a collective trap: 𝗠𝗼𝗹𝗼𝗰𝗵, 𝗧𝗵𝗲 𝗣𝘂𝗽𝗽𝗲𝘁𝗲𝗲𝗿 𝗣𝘂𝗹𝗹𝗶𝗻𝗴 𝗧𝗵𝗲 𝗦𝘁𝗿𝗶𝗻𝗴𝘀 𝗢𝗳 𝗔 𝗠𝗮𝗰𝗵𝗶𝗻𝗲 𝗙𝘂𝗲𝗹𝗲𝗱 𝗕𝘆 𝗢𝘂𝗿 𝗖𝗼𝗹𝗹𝗲𝗰𝘁𝗶𝘃𝗲 𝗥𝗮𝗴𝗲.
This predominant approach in these business models not only influences the way music is released and consumed but also impacts the industry’s broader view on the value of music in areas like publishing and performing rights. Despite their crucial importance in the traditional music industry, discussions about these key elements are almost nonexistent in Web3.
Music Publishing & Performing Rights Have Largely Been Ignored In Web3
Given the significant role of rights and royalties in the music industry, organizations like BMI and ASCAP have been instrumental. They operate effectively in the traditional music industry, managing and distributing royalties. Their activities highlight the complexities and opportunities in the music business that extend beyond mere streaming revenue. Many talented musicians and composers, who might not even be present on streaming platforms, derive substantial income from these sources in film, video, television, and advertising.
As someone who diverged from the conventional streaming path to explore alternative avenues in the music industry, I’ve witnessed firsthand the vast potential that lies beyond mainstream platforms. This experience has led me to believe that the Web3 space, while promising, still has a lot to uncover and integrate, particularly regarding the complexities of music rights and royalties. Addressing this gap could unlock new possibilities for artists, especially those who operate outside the conventional music industry sphere.
While the traditional music industry has its complexities, especially around publishing rights and royalties, the digital realm introduces new paradigms that challenge these established norms. This brings us to another significant aspect in the evolution of music in the digital era: Creative Commons licensing. How does this concept, which has found a place in digital art, translate to the world of music?
Creative Commons Licensing — CCO and Music
In the digital art world, Creative Commons licensing, specifically the CC0 (“No Rights Reserved”) license, has sparked considerable interest. Digital artists like XCOPY have embraced this model, leveraging the provenance of their original high-value sales while allowing unrestricted use and reproduction of their work. This approach has its merits, fostering a culture of open access and community engagement around an artist’s creations, However, translating this model to music would not be a good idea in my opinion. Unlike visual art, music has a well-established ecosystem of rights management and royalty distribution through organizations like BMI and ASCAP. These entities play a crucial role in ensuring musicians and composers are compensated for the use of their work, especially in public performances and broadcasts. They work extremely well actually and not for profit companies.
The notion of applying a CC0 license to music, allowing unrestricted and uncredited usage, is fraught with implications. It would potentially undermine the existing frameworks that ensure fair compensation for music artists with their publishing and copyright. While the idea of freely available beats or compositions under CC0 licensing might seem appealing for fostering creativity, it disregards the intricate network of rights and royalties that sustain many musicians.
Furthermore, music, by its nature, invites collaborations and iterations. A CC0 approach in music could blur lines of originality and ownership, making it challenging to uphold the rights of original creators, especially in scenarios involving multiple contributors. When someone creates a derivative of an XCOPY piece, it’s visible, but in a music track, identifying who contributed a specific beat, guitar part, or sample is nearly impossible. It’s just basically giving away everything for free in the context of music and nobody would ever know who actually did anything. It’s a terrible idea.
In my view, caution is warranted in adopting CC0 licensing in music. While it’s not to say that selective or one-off CC0 releases couldn’t work, embracing it as a trend or standard practice I believe would be detrimental and devalue the one thing that actually does work well in the traditional music business. The music industry’s strength lies in its unique structures like performance rights organizations — nothing like this even exists on the visual art side. Preserving and adapting these structures in the evolving digital realm is essential. It would be quite ironic if the people championing this as being in favor of somehow reclaiming music’s value end up dismantling the last thing in the music business that truly works in their favor.
As we navigate these complex issues, from the nuances of CC0 licensing to the preservation of traditional music rights, it becomes clear that a deeper reevaluation is needed in how we approach and value music in the digital space.
So Where Does That Leave Us?
To shift the narrative, we need to make a collective statement that just like a 1 of 1 painting or a digital art piece, an original music piece as a digital file can be deserving of recognition and high value as an art form. This doesn’t negate having it also on Spotify or exploring other creative blockchain use cases with it. These can co-exist and compliment the original 1 of 1 creation.
The challenge now extends beyond recognizing music’s potential in the Web3 space to transforming the entrenched cultural mindset that has long defined it. We must envision music as more than a commodity for mass consumption and acknowledge its potential as a singular and valued art form. This paradigm shift in perception invites us to rethink our cultural narrative around music, exploring ways digital platforms can elevate its value rather than diminish it.
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