Bowie’s response not only accurately predicted the way the internet would change the way we consume content, but also the way it would create a new wave of artists. In 1999, David Bowie was interviewed by BBC Newsnight. In the interview, he was asked a question about the internet’s impact on art and content. Bowie’s response accurately predicted not only the way the internet would change the way we consume content, but also the way it would create a new wave of artists.
David Bowie responded with an incredibly insightful prognosis on how the future of content would play out:
Yet, it’s happening now, it’s almost like genetic engineering. It’s not just a tool. We’re part of it, and it’s changing every day.” I don’t think we have seen even a fraction of what the internet is capable of doing to society. The potential for it to do both good and bad is unimaginable. And yet, it is happening now. It is almost like genetic engineering. The internet is not just a tool. We are part of it, and it is changing every day.
content on the internet will be so different than anything we can imagine right now. The relationship between the user and the provider will be so close that it will change our ideas of what mediums are all about.
— David Bowie, 1999 BBC Newsnight
David Bowie was a genius when it came to the internet and its impact on music.
Although David Bowie is no longer alive, he correctly predicted many events that have happened in the last 15 years. It’s likely that he would have also had something to say about how blockchain technology is going to change content, culture, and society.
He might even compare blockchain and Web3 technology to an “alien life form,” just as he would the internet.
WTF Is an NFT?
Non-fungible tokens create unique ledger entries on a blockchain that cannot be divided. These tokens can be used to represent ownership of assets that exist outside of the blockchain. Most NFTs take the form of an ERC-721 smart contract on the Ethereum blockchain. This type of smart contract allows for the creation of a token that cannot be divided. Although all ERC-721 tokens are NFTs, the inverse is not true—not all NFTs are ERC-721 tokens. There are similar standards for NFTs on other blockchains, and there are also bridges that allow NFTs to be created on alternative networks such as Polygon, Solana, WAX, Cardano, and Tezos. Ethereum is the dominant blockchain for NFTs, butTransaction costs on Ethereum can be significant and volatile. This means that even a “free” transaction on the main NFT network requires a currency and time investment that far outweighs the everyday routines of fiat exchange.
NFTs, as originally proposed in the ERC-721 standard, are intended to represent ownership of digital and physical assets such as houses, virtual collectibles, and negative value assets such as loans. The details of these assets, such as the name and description of the asset, can be encoded as metadata, including a URI that typically points to either a file somewhere on the Internet or a file hosted via IPFS, a decentralised peer-to-peer hosting network. However, it should be noted that while the data inscribed on-chain are immutable, the asset being referred to is not. Similarly, while each NFT is unique, multiple NFTs could, in theory, point to a single asset.
ERC-721 tokens are different from other types of tokens because their value is often based on their connection to assets outside of the blockchain. This can make it complicated to understand how NFTs confer ownership of digital assets. NFTs often don’t include any information about licensing or rights transfer, and some well-known NFTs appear to be governed by terms held off-chain. While it’s possible to store various types of data in an NFT, the ERC-721 standard and related blockchains weren’t designed to hold multimedia content.
NFTs offer a unique opportunity for music to distinguish itself in a marketplace dominated by visual works. The following sections of this article are divided into what we consider to be the general use cases for NFTs within music in 2021. We’ve designated three overlapping cases: audience investment, music ownership, and audience and business services.
Audience Investment
There is a lot of discussion about NFTs, mostly about how they can be used for digital collectibles and artwork. People have spent a lot of money on NFTs, often because they are associated with famous brands. Some people think NFTs are valuable because they are new and rare, while others think that people are investing in them speculatively. There is also concern that there is no regulation around NFTs, which could lead to inflation. There are two main narratives about NFTs: one is positive and the other is negative.
This text discusses how NFTs have been used to create unique digital assets that can be scarce or abundant. It cites Grimes’s Mars NFT as an example of a unique digital asset that was sold in a fixed price auction. It also discusses how electronic artists Steve Aoki and Don Diablo have sold 1:1 NFT editions in an auction.Aoki’s Hairy wasn’t as detailed as some of the other pieces up for auction, but it still held the promise of giving the winner a 35-second video of a fur-covered face shaking in time to downbeat electronica, as well as an Infinite Objects video print (Aoki).
Web2: Why Content and Culture are Primed for a Paradigm Shift
Since Bowie’s 1999 BBC interview, the internet has had a huge impact on creative content and culture. He predicted that the way we consume music and TV would change, and that new types of content would be created on social media. This has definitely happened – for example, most of us now use Spotify to listen to music, and Netflix to watch TV shows.
The early days of the internet showed a future of peer-to-peer networks with no boundaries that had a lot of potential for creativity. Rex Woodbury explained the internet’s promise was to get rid of the people who control what is seen and heard in the culture. For example, Facebook and Twitter would make it so that newspaper editors didn’t have as much control, Spotify and Soundcloud would make it so that record labels didn’t have as much control, and YouTube and TikTok would make it so that studio chiefs didn’t have as much control.
However, the internet has enabled a more direct relationship between creators and their communities, which has transitioned to gatekeepers and intermediaries demanding their share of cultural equity. The big internet platforms became the middlemen by cutting out the middlemen, and their incentives are misaligned with creators and communities because they are built for advertisers.
We are fortunate that the world of cultural gatekeepers is not the final state. As innovation progresses, we are noticing flaws in the foundation of the Web2 cultural establishers.
Web3: Innovation Unlocking a New Cultural Paradigm
There has been a lot of discussion about how blockchain technology is making it possible to create a new generation of technological possibilities, called Web3. If you want to know more about why this change is happening and how it works, read what the experts in this field have to say. Their ideas convinced me that we are just beginning to see the potential of this new technology.
What does this shift from Web2 to Web3 mean for the cultural mediums we love? Basically, it unlocks a new cultural paradigm – Community-Owned Culture.
The Web3 movement, enabled by blockchain technology, is now creating the tools and infrastructure needed to facilitate next-generation, peer-to-peer creative economies. These economies remove the rent-seeking, gatekeeping, and industry-wide 30% marketplace commission that have been the business model of the web until now.
Rather than passively consuming content, we will be active owners, participants, and decision-makers. New Web3 cultural platforms will provide the tools to enable content consumers to be invested members of a community and share in the success of content. In many cases, community-owned and operated culture will allow the people who are the consumers to even take part in the production of content and products they enjoy.
This is important because it creates a more direct relationship between content producers and content consumers, rather than going through a gatekeeper. This also means that the value will be spread out among those at the edges of the network, rather than in the middle.
Web3 will create more efficient relationships and incentives between the producers and consumers of culture. This suggests that our participation in culture will look different in the coming decades than it has in the past.
Bringing Community-Owned Culture to Life: Five Web3 Projects Disrupting Culture
To show how Web3 is affecting cultural mediums, let’s look at five projects that are changing the way we experience and participate in culture today.
P00LS: Community-Owned Creator Tokens
The P00LS team is building a decentralized exchange for creator cryptocurrencies that puts the community first. This is one of the earliest examples of a project that is changing the way people interact with culture.
In essence, P00LS works with creators to launch their own cryptocurrency token to be distributed among their fanbase. These tokens are then listed on the P00LS decentralized exchange where they can be earned and traded. The use of blockchain technologies allows for the authentication of these tokens and helps to maintain their value by preventing them from being replicated.
Instead of directly purchasing the tokens, fans earn them by engaging with creators. This can be done by watching videos, listening to music, or taking quizzes created by the creators. The tokens can then be used by the creators to give access to exclusive events, bonus content, or to sell virtual merchandise. In early 2022, the team plans to launch a secondary market. P00LS will earn revenue from secondary transactions, as well as from the sale of its own token, $00.
Essentially, social tokens are a way for creators to connect directly with consumers, similar to how entrepreneurs have equity in their companies. It’s effectively creative equity, giving creators a stake in their work.
A social token’s value is directly correlated to the amount of attention it receives. A small group of people can give a lot of attention to a creator and create more value than a large group of people giving only a small amount of attention. Social tokens allow creators to turn the attention they earn into capital.
The social token model also benefits fans by giving them a stake in the community of the artist they support. By investing their attention in an artist early on, fans are rewarded with units of social tokens, just as investors receive shares of a company for their investment in a company and its entrepreneur.
New tools are available for creators and fans to make money from the ecosystem, making it more engaging and inclusive. In the future, a creator’s influence will be measured by their market capitalization instead of their social media following. For example, Kim Kardashian could launch the $KIM token with 10 million $KIM in circulation, each trading at $100, for a total market cap of $1 billion. Rally and Coinvise are two other projects working on this idea.
P00LS launched its first social token at Miami’s Art Basel convention recently in collaboration with Canadian DJ Blond:Ish. The team recently announced an $18 million seed funding round led by Global Founders Capital with participation from L2 Ventures, Shift, Maveron, and Kima Ventures.
Royal: Community-Owned Music
Royal wants to change the way that fans interact with their favorite creators. Instead of just being able to invest in individual creator tokens, fans will be able to invest directly in the music content itself. This will allow fans to own a piece of their favorite music and earn royalties alongside the creators. This shift in power will take it away from the middlemen and labels and give it back to the artists and their fans.
This model provides a way for artists to both empower their fanbase and fund their careers, while also providing fans with access to royalties that have traditionally been available only to major labels, large investors, and highly-connected individuals.
LDAs are what make the system work. An artist can choose to reserve a certain percentage of their royalties for fans who hold LDAs, and how many “official editions” to create for a given song. Royal then takes care of selling the LDA tokens, making money for both the artist and the song’s owners. For example, if there are 100 “official editions” of a song, each holder is entitled to 0.5% of the royalties it produces.
Royal wants to change the typical record company model, where the label keeps 80% of future royalties, to one where the artist keeps 80%. They would generate revenue by taking a cut of primary sales that is less than 10% (much lower than the industry standard), as well as a cut from secondary sales.
The following text is about how Web3 projects will make engagement with music more engaging. Rather than the Spotify-like interface we have today, you will be able to look at upcoming artists you love and bet on the music’s ability to generate future cash flows.
The idea that everything can have a financial market attached to it is a central theme of Web3. This allows individuals to have more control over their finances and allows them to participate in the markets they are most interested in. This concept began during the Web2 era and has been expanding since then.
The founders’ experience and credentials give Royal’s platform more credibility, which is a significant advantage for any Web3 project that is aiming to change established industries and build support among a group of people. Justin Blau, the CEO of Royal, is one of the top five highest-paid artists in electronic dance music, and he was an early adopter of cryptocurrency and blockchain technology. He began working with non-fungible tokens (NFTs) in 2018. JD Ross, who is the co-founder and president of Royal, previously co-founded Opendoor and was a general partner at Atomic, a venture studio that helped create successful startups such as Hims & Hers, Bungalow, Butter, Homebound, Villa, OpenStore, and others.
3LAU gave away 333 digital assets representing 50% streaming ownership in his latest single, ‘Worst Case.’ The tokens have traded over $650k in secondary market volume, demonstrating how an open market values ownership in music royalties.
Royal Software recently announced that it has received investment from a number of famous global artists, including The Chainsmokers, Nas, Logic, Stefflon Don, Kygo, Joyner Lucas, and Disclosure. The company has raised $55 million in Series A funding, led by Andreessen Horowitz, with participation from CAA and NEA’s Connect Ventures, Crush Music, Coinbase Ventures, Founders Fund, and Paradigm.
Socios: Community-Influenced Sports
Socios is a platform that is quickly changing the professional sports world, which is one of my favorite cultural subsets.
Socios is a digital currency-based fan engagement and rewards platform that allows fans of various teams to vote on club decisions, such as kit designs and goal celebration music, as well as to chat with fellow supporters from around the world and earn VIP rewards.
Teams that participate in the token sale will receive 50% of the revenue generated from the sale or trade of the tokens. This business model provide teams with payouts in the millions of dollars for years to come as more tokens are issued.
The new partnership will see Socios.com working with the teams to launch $PSG, $INTER, $BAR and $ARS fan tokens. Several well-known sports teams have partnered with Socios.com to launch fan tokens. The European soccer clubs PSG, Inter, Barcelona, and Arsenal are among the 24 teams in the NBA who have joined the new venture. The fan tokens, $PSG, $INTER, $BAR and $ARS, will be used to increase engagement with fans.
It appears that fan tokens are quite popular and in high demand. For example, Barcelona’s initial fan token offering sold out within two hours and generated over $1.3 million for the team.
Socios predicts that its fan tokens will generate close to $200 million in revenue in 2021. This means that its team partners will receive a share of around $100 million, depending on how many fan tokens they have sold. The platform’s mobile app has been downloaded over 1.2 million times since it launched in 2019, with over 900,000 active users.
Alexandre Dreyfus, the founder of Socios, points out that the platform provides a valuable service to an industry where sports franchises haverun up against a revenue ceiling. Teams can’t sell any more tickets than they have available and they can’t raise ticket prices too much without facing public criticism, while income from sponsorship and broadcast rights is stagnating in many leagues.
Dreyfus believes that the sports industry is moving from a passive fan base to an active fan base, where fans will have more influence. This influence can be monetized, although it is currently limited.
The platform is starting by empowering fans with relatively trivial decisions like what song gets played in the stadium when a goal is scored. At the same time, one can imagine how the power and influence of blockchain-enabled Web3 tools can expand dramatically. This brings us to the next project…
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