The Nature of Complex Systems
Nature is pretty complex, yet it is simple. Can we learn from natural systems to reimagine human-invented systems that no longer serve us? Complex problems can usually be deconstructed into smaller pieces.
Let’s explore the complex resonant frequency that is the music industry.
The problem facing the music industry can be framed into two potential solution paths. The first is how to create a new framework for artists to monetize and activate their craft without friction and without paying parties that add limited value. The second is how to initially apply that framework to smaller segments of the current system to bring those artists into a new realm of music administration and monetization. In order to solve a hundred-year-old problem, you need to expand the solutions beyond the limited context of current experience.
It’s a bit out of order, but we’ll focus on the second solution path first. These ideas are not really linear anyway, which will allow them to emerge in interesting ways. Perhaps, they can even feed each other.
When a system is based on individual components, reimagining that system requires a readdressing of the components. In this case, the components of the music industry are songs and their ownership rights, both composition and performance. The flow of usage and financial data is managed and tracked by record labels, publishing companies, and performing rights associations using numerical identifiers and percentages. While some would argue that this system works perfectly well, these assets are not ready to participate in the next version of the market. A virtual economy based in Web3 and connected to traditional markets will require a more automated asset structure. For a present-day example, from a synch licensing perspective (using a song in synchronized time with a form of visual content) today, there are many steps required with numerous parties involved in a complicated journey beginning with identifying the appropriate decision-makers, making a deal, and ultimately gaining permission to use the song.
Smart contracts offer the songwriter an unprecedented ability to automate this process and other workflows that monetizing music requires. What if each song were encapsulated as a non-fungible token (NFT) with a smart contract capturing the ownership details, permissions for use, and a mechanism for tracking usage? It could be a tremendous opportunity to bring existing music into the new commerce engine of the Metaverse. The main challenge to this approach is the herculean amount of work it will take to research and gather accurate details on the ocean of songs in the world today.
To achieve results in any endeavor, the incentives need to align with the goals. What incentive does the current system have to reimagine itself? It’s like the horse trader working on new designs for the Model-A. They would engineer themselves out of the equation. Perspective is also a powerful influence on behavior and beliefs. I think of the old story of six blind men trying to describe an elephant by touching different parts of it. One man has the trunk, another the body, the next has the tusk, and so on. Each man comes away with a different opinion on the nature of the elephant and translates that opinion into a belief that is vigorously defended by their ego.
We protect things we believe in, even if our perspective is skewed.
Music fans have been near the epicenter of the fight for financial equity for songwriters. They feel empathy for their favorite creators and do their best to elevate their cause by sharing hashtags, donating to organizations, and joining rallies. What if fans could participate in a more tangible, meaningful way while getting compensated?
Distributed Autonomous Organizations (DAOs) could be an appealing structure to encourage a community of music fans to solve the oldest music challenge. The concept is simple. Harness passion toward a common goal and reward meaningful participation and effort. DAOs are built upon smart contracts that automate the governance and interaction of a group of like-minded people. The administrative work to collect, review and confirm song ownership (master recording and composition) is a tall task, especially considering that Spotify alone houses over 70 million songs in its streaming catalog. Change within a complicated system usually needs to be initiated outside of the system, especially when that system is managed by its beneficiaries.
Enter DAO-RE-MI …
This is my thought experiment proposing one approach to the complicated nature of song ownership and administration.
The caretakers of DAO-RE-MI offer a path for existing songs to move on-chain and begin a new life as simplified assets that can move without friction within traditional markets as well as within the Metaverse. They create a smart contract that governs roles and actions within the community to deliver the desired end results. In the initial token offering, DAO-RE-MI appeals to musicians and music fans by turning their collective awareness of the inequities of the current music industry into marching orders to reimagine the system that governs it. Through a clear and aligned set of goals and powerful incentives to achieve those goals, DAO-RE-MI will modernize the music industry starting with the artists and fans.
Components of DAO-RE-MI:
- Decentralized Blockchain Infrastructure — the technology stack that supports the decentralized capability of the DAO.
- Native Token(s) — the incentive for all participants in the DAO from investors to researchers and validators.
- Diverse Stakeholder Network — along with its body of work, this is the core asset of the DAO.
- Governance— the framework supporting ongoing operations that include voting, token distribution, describing productive behavior, and detailing behavior detrimental to the vision of the DAO.
For this post, let’s consider the Diverse Stakeholder Network in more detail.
I’ll break down the other components of the DAO in subsequent posts.
Stakeholder-Contribution Matrix (names taken from the Nine Muses)
Thalia — Musicians rewarded for bringing their songs to DAO-RE-MI.
Melpomene — Administrators rewarded for their work researching and documenting the details of each song.
Clio — Validators rewarded for confirming the details collected by the administrators.
Euterpe — Forward-thinking attorneys, economists and accountants rewarded for advisory work.
Terpsichore — Technical specialists rewarded for creating the new smart contracts and the NFTs.
Erato — Marketing specialists and street teams rewarded for connecting the song to an opportunity and again if that opportunity turns into a deal.
Calliope — Designers, copywriters, and art directors rewarded for creating assets to help promote the song.
Urania — Stakeholders in existing organizations within the music industry that can help accelerate change (record labels, music platforms, publishing companies, performing rights associations, etc).
Polyhymnia — Investors supporting the community.
I know this may seem like a radical way of thinking, but you can’t tackle previously unsolvable challenges with a mindset and perspective rooted in the challenge itself. Can we look to nature to structure something more evolving and emergent than our current structures are capable of being?
