Four Ways Technology is Changing Music (2021 so far)
Technology & music have been dependent on each other for decades. Whether it's the meteoric rise & fall of compact discs, the return of Apple's supremacy with the iPod, or the advent of distributing content online via Napster or LimeWire - music has been the inflection point for massive shifts in technology.
Recently, the development of technology has been accelerating, creating a sense of constant change. It's challenging to know what platforms have long-term viability & what might just be a fad or a trend. At the same time, getting in early on a growing platform can produce exponential results. Kids who created musical.ly accounts half a decade ago are seeing unprecedented fame due to the popularity of TikTok - something no one would have predicted. At the same time, if you're late to the party on some of these platforms, breaking through becomes a monumental task.
In the past year, we've seen a continued introduction of new platforms, altering how we discuss and consume music. Today, we're going to break down four new ways technology is driving change in the music industry.
What
Ah, Clubhouse. The infamous voice chat that initially took over the tech scene & rapidly became a hot spot for members of the music industry to network & discuss the popular points of the business.
If you're not familiar, Clubhouse is a product of the moment - a social media platform that revolves around panel-style voice chat rooms, almost like a live podcast. The app was initially exclusive - you had to be invited by a very close-knit group of people to join. Typically someone is involved in the tech industry. Nowadays, Clubhouse has become far more inclusive, and most people who are invested in pop culture have access.
In addition, the platform recently launched monetization options, allowing creators to charge subscribers to access exclusive content or discussions.
Why it matters:
Clubhouse is an exciting platform that promotes two-way conversations more than traditional social media. Often, you'll find famous artists or influencers in chat rooms that anyone can join. By simply "raising your hand" in a chat, you might end up in an extended discussion with Top Dawg or Meek Mill. An opportunity that barely exists outside of Clubhouse at the moment.
In addition, it's currently a far more casual platform, as Clubhouse does not currently offer the ability to record conversations or distribute past conversations in-app (although I'm sure people are still doing so via third-party applications).
I think a consistent Clubhouse schedule may give you similar benefits to live streaming on Twitch or YouTube for smaller or independent artists. While there are far fewer users on Clubhouse versus other live streaming sites - that might be a positive. As a creator, you know that everyone who is joining or engaged in a conversation is a legitimate fan. And, depending on what happens in the future, we could be seeing another transformation similar to Musical.ly/TikTok for Clubhouse down the road.
Is it around to stay?
Maybe. At the moment, three significant issues are plaguing Clubhouse's long-term viability.
No competitive advantage
We're witnessing the craziest rush to replicate Clubhouse since the Snapchat story picked up steam in 2013.
Twitter recently launched its Spaces functionality, which at a technological level mirrors Clubhouse. Unfortunately, Twitter has yet to create an intuitive way to find exciting rooms to join, but it seems like a safe assumption that they're close.
Meanwhile, Facebook is piloting a new product called Hotline, which focuses on Q&A functionality more than Clubhouse or Spaces, but ultimately looks pretty similar.
Does Clubhouse have what it takes to compete with two of the largest social media companies in the world? Are they going to sell two Twitter? It's unclear, but as of today, Clubhouse is still around and sees month-over-month growth.
Return to “normal”
Like earlier stated - Clubhouse is a product of the times. Precisely the pandemic times. Will digital chat rooms or panels still be this wildly popular when we can attend similar events in person? I doubt it - most of the celebrity speakers will gravitate to where the money is. Unless Clubhouse is willing to match corporate speaking rates, I imagine many creators will want to reestablish major paywalls as soon as they're able to.
At the same time, we have at least a few more months of semi-lockdown for the platform to flourish and establish a long-term presence.
Quality control
The final and genuine issue affecting Clubhouse is the lack of quality control in the chat rooms. Many scammers & multi-level marketing schemes have flocked to Clubhouse to recruit young or naïve victims.
Until Clubhouse has a better way to regulate who can create a chat room or some of the business interactions occurring within the app, it will likely continue to operate like the Wild Wild West.
Nifty Gateway is one of the largest marketplaces for NFTs right now!
What
Non-Fungible Tokens. Has anyone not been berated with news about NFTs in the past few months? Rather than bore you with an extended explanation, I'll sum it up for you quickly.
NFTs allow creators to sell limited edition copies of artwork and track what consumers hold ownership of. In addition, the technology allows the original creators to receive residual royalties when the artwork is sold on the secondary market.
Recently, musical artists have been flocking to NFT marketplaces like Foundation or Nifty Gateway. Artists like The Weeknd or Diplo have been selling limited edition artwork inspired by their visual brand or featuring snippets of songs. On the other hand, artists like 3Lau have been pushing the limits of what NFTs allow - granting additional benefits to consumers who own their artwork. One example is lifelong VIP access for concerts or the ability to have a private recording session with 3Lau.
Why it matters:
This is truly uncharted territory. A real example of technology potentially introducing an evolution of how we sell and consume music, similar to the shift from physical to digital, or digital downloads to streaming.
Allowing for transparent ownership of a product, whether it be the master recording, the album artwork, or something even more innovative - creates a brand new revenue stream for artists. In addition, it could offer a way for artists to ethically generate capital from fans without having to resort to a GoFundMe or signing to a major label.
The potential here is immense. As we shift away from NFT as a buzzword for a get-rich-quick-scheme and it becomes part of our everyday vocabulary, I see massive potential for independent artists inventing ethical & innovative ways to harness the technology.
Is it around to stay?
Probably, in one form or another. But some barriers might prevent NFTs from reaching their full potential.
Negative Environmental Impact
The most famous talking point from the anti-NFT camp is the massive negative environmental impact blockchain technologies generate. This is a music blog, not a crypto discussion board, so I'll leave the in-depth discussions to the experts.
There are hundreds of alternatives to Ethereum being launched constantly, many of which promise to negate some of the environmental impacts by investing in carbon credits & similar offsets.
I think it's silly to write off something that offers so much long-term benefit due to issues with the initial iteration. By not entirely writing off the technology but holding these platforms & marketplaces accountable for the change we want to see, we can encourage positive change.
Expensive
At the moment, the NFT game is mainly for those with high discretionary income. While there are the occasional $1 raffles, like Diplo's via NiftyGateway a few weeks back - the majority of this art is selling for anywhere between $750 and $50,000,000.
I do not deny that art has value (really, the opposite), but it serves as a barrier to entry for casual fans. As more art proliferates in these exchanges, I'm sure we'll see less-limited but cheaper artwork available so everyone can enjoy the benefits of NFTs.
Technology issues
Due to the youth of NFTs, there's still a lot unknown about the longevity of the technology. Will the exchanges hosting the ARTWORK be around forever? Will the Ethereum blockchain be replaced with something more efficient?
There are many unknowns, and blockchain can be an intimidating topic to explore if you don't have any guidance. Many pretend to be experts on the subject; I strongly recommend continuing to do your research and staying up to date with any progress that gets made on the topic.
More resources:
What
Audius is the first blockchain-based music streaming service. The platform has been slowly growing over the last few years, picking up momentum with each major artist that joins & uploads their music.
For artists, the platform is awesome. Audius is supported by a proprietary token $AUDIO, allowing artists, fans & investors to interact, secure & develop the platform further by collaboration. As a SoundCloud alternative, Audius enables artists to upload their music and monetize directly as fans stream.
Meanwhile, for fans - Audius is entirely free. You can access the streaming service on their website and start streaming immediately. The offering currently skews heavily towards electronic music, with Deadmau5 & 3Lau being some of the most prominent names promoting the platform.
That being said, I have the utmost faith that this platform has some serious legs, and as more artists learn about the potential of Audius, we will see an influx of new artists taking advantage of its offerings.
Why it matters:
While Audiomack offers one of the best alternatives to the classic SoundCloud experience, Audius feels more like the natural next step. Maintaining the democratic approach that made SoundCloud an essential part of music discovery for almost a decade but coupling it with a contemporary approach to monetization sounds like a recipe for success.
One of SoundCloud's early deficiencies was the inability to monetize releases while Spotify was rapidly growing to become the most extensive channel of music consumption in the world. Once SoundCloud's staunchest artist supporters realized they could earn respectable amounts of money on larger DSPs, many began to jump ship. While SoundCloud eventually found a solution, it was too late to regain its original creator community.
Audius has the opportunity to encourage a new generation of creators with an already active monetization model that rewards artists for actively engaging with fans and leveraging the platform beyond simply uploading your music.
Is it around to stay?
Yes. I think Audius has incredible potential, and the platform makes me incredibly optimistic for the future of music consumption. That being said, I still have a few concerns that might be holding them back from becoming a household name.
Copyright issues
Like the lawsuits that got lobbied against SoundCloud once major labels realized that a large amount of the music they own was illegally streamed on the service - Audius may run into trouble dealing with the big players in the industry.
At the moment, Audius does not have any type of DMCA or copyright screening technology in play. That means, at any moment, you can quickly go onto the platform and find a bootleg upload of a Drake song, despite Drake or Republic Records not having any sort of agreement with Audius.
Audius' argument (via a Clubhouse chat I popped into) is that the platform exists for engaged fans to support their favorite artists. Therefore, the platform should automatically filter through some of these copyrighted songs, because ultimately all users know that any money is not going to the proper people.
Unfortunately, there are many greedy people out there willing to take advantage of these young platforms for a quick buck. Hopefully, Audius can figure out a way to avoid bearing any serious repercussions for these pirates' actions.
Blockchain complexity
Spotify, Apple Music, even SoundCloud all 'just work.' Very few of Audius' competitors ask the consumer or the artist to think much beyond uploading or consuming music. A significant barrier to entry to Audius is its buzzword-heavy explanation.
Words like "governance" or "blockchain" can quickly turn off a casual user - and casual listeners are the majority of the music audience out there. If there's no audience, artists will stop uploading new music & the platform will quietly bleed users.
It's the classic chicken or the egg argument, but I think it's important to point out here. Audius has yet to reach the critical mass that will guarantee its longevity, and I think a piece of that is the branding. While focusing on the benefits of blockchain has been an excellent way to introduce the platform, at a certain point, Audius may need a landing page that focuses on quickly selling and onboarding users.
More resources:
What
Several weeks ago, SoundCloud announced "fan-powered payouts," which aim to compensate artists directly based on the support of their fans. Typically, SoundCloud & all other music streaming services create a "pot" of earnings from subscribers, advertising revenue, etc. They then divvy up this "pot" based on an artist's % mix of the platform’s total streams by country.
These "fan-powered payouts" will compensate artists based on the amount of revenue their direct listeners bring to SoundCloud. In an example cited by SoundCloud, Vincent, who has 124,000 followers typically earns $120/month under the traditional monetization model. Through "fan-powered payouts," it's estimated that Vincent will start making almost $600/month - a massive increase.
Keep in mind, SoundCloud is only offering this monetization model to people who currently distribute their music via their in-house products such as SoundCloud Premier & Repost by SoundCloud. And that means that SoundCloud also has not figured out any deals yet with the major labels.
Why it matters:
Listener-driven payouts have been among the most-requested features for streaming services since their rise to popularity in the 2010s. No longer earning a random fraction of a penny depending on the inconsistent or opaque revenue of a streaming service is hugely enticing and is the next step that all services need to take.
Spotify is especially behind the curve in this regard - providing minimal financial visibility for independent artists. The service consistently pays the least-per-stream and does not empower artists to solve this issue. Whether it's due to the number of international fans an artist has or the number of users that leverage the free tier of Spotify - artists should have some sense of why their earnings are so much lower than competing platforms.
The Square acquisition of Tidal hopefully indicates a growing relevance of financial visibility for artists in the industry.
Is it around to stay?
Yes. I do not doubt that the logic behind "fan-powered payouts" will be around to stay. I'm not quite as confident that this feature will be sufficient to keep SoundCloud afloat forever. Still, hopefully, as more artists get behind the program, we can pressure the remaining platforms to get on board.
Lack of Major Label Support
Not having major label buy-in holds this announcement back from turning the industry on its head overnight. Major labels and SoundCloud have a rough history as is, so I'm sure it will take months, if not years, of discussion to figure out the best way to scale this to the massive major label rosters. In addition, if this change hits the biggest labels' bottom lines, I'm sure there will be staunch opposition.
At the same time, independent artists needed this change the most, so I'm glad the offering is at least making it out the door.
Limited to Repost by SoundCloud
Limiting this monetization model to artists that distribute their music to all DSPs through SoundCloud's platform also serves as a severe turbulent barrier to entry. If an artist already distributes through DistroKid or another product - how likely is it that they jump ship just for increased SoundCloud royalties? Probably not massive.
I'm not a massive fan of distribution channels offering their distribution platforms that have extra incentives - it feels somewhat unethical and potentially like a conflict of entry (see: Level or Anchor for Spotify). I understand that, in this case, it could be a great way to pilot the approach. I just hope, in the long-term, it becomes to anyone who delivers through a distributor to SoundCloud.
More resources?
Well, that's my wrap-up of some of the most prominent technologies changing the music industry during 2021 (so far). I hope you enjoyed checking some of these out! I'll probably continue updating this article as the year goes on with some other excellent tools for artists in the works.
Stay tuned & thanks for reading!
