The music industry could learn a few lessons from blockchain
Bandcamp’s drama and community response has reminded us that the investments we make into centralized internet products are neither owned by us nor permanent
Midjourney modified by Blockworks
I spent twenty years building digital music applications and businesses, most recently Beats Music and Apple Music, previously with Yahoo!, Winamp, Topspin and Beastie Boys.
Today, I work at Ledger and espouse the utility of crypto instead, so I’m often asked the question, “What about music on the blockchain?”
“Meh,” is my standard response.
I don’t see the innovation or consumer need in asking people to buy digital music NFTs like they bought CDs, or trying to shoehorn digital ownership into streaming services meant to compete with Spotify. Listening to music on the internet is a solved problem, and music listeners don’t need the help of a blockchain to hear what they want. Just say, “Hey Siri, play The Beatles,” to remind yourself just how far we’ve come since Napster.
The business of music rights is an oligopoly controlled by three major labels and four digital music services, none of whom have an interest in open standards.
But the two-sided marketplace of Bandcamp is a great place to consider the value blockchains can and will add to the artist/fan relationship, and how that change will come slowly over the next fifteen years. Below is a thought exercise using Bandcamp to demonstrate where digital ownership can meaningfully change the paradigm without asking consumers to change their habits all at once.
For music fans — and in particular, fans of niche genres such as heavy metal and contemporary jazz — Bandcamp is beloved. The site launched in 2008 and bloomed slowly, building a passionate community of music lovers over fifteen years. The functionality of Bandcamp.com is simple: Stream for free, buy digital for around $10, and often buy vinyl (Bandcamp actually bought a pressing plant to help the creator side of their marketplace press vinyl), as well as t-shirts or other physical collectibles from the artist. Artists receive a net average of 82% of every sale, and Bandcamp has paid out around $1 billion to artists and labels selling on the site since its launch.
But in March 2022, Bandcamp was sold to Epic Games.
“Bandcamp will play an important role in Epic’s vision to build out a creator marketplace ecosystem,” Epic Games wrote in a statement. Bandcamp unionized in March 2023, and when Epic Games announced it was laying off 16% of its total workforce in September, a sale of Bandcamp to Songtradr was announced.
Only 50% of the Bandcamp staff was retained and the community voiced its concern for the future of Bandcamp loudly culminating in this Pitchfork article: “Is Bandcamp as we know it over?”.
Bandcamp’s drama and community response has reminded us — like MySpace, Flickr and so many other platforms before — that the investments we make into centralized internet products are neither owned by us nor permanent.
At the end of the day, these are for-profit companies with investors looking for outcomes. Our investments into the platform are of value for them, not for us. The digital albums purchased, as well as the “relationship” between the artist and consumer, are owned by Bandcamp. If they disappear, so does the artist’s access to their fanbase and the listener’s backup of the music they’ve paid for.
With decentralized ownership, this could be fundamentally different. If I were at the helm, here is how I would modify Bandcamp:
- Today, when an artist finishes their album, their “master” copy of that recording lives on their hard drive. Hopefully it’s backed up and stays in a safe place for the next few generations.
What if Bandcamp assisted artists in creating an on-chain master, defining the provenance of the work and linking to the media files on a long-term and decentralized storage solution like IPFS? The longevity of the work would then be tied to the lifetime, security and decentralization of the blockchain and IPFS — not of Bandcamp.
- Today, when you “buy an album” on Bandcamp, you are buying the right to download a zip file of the MP3s, and you can return to download it again as long as the Bandcamp service is running. No more, no less.
What if instead, you were actually transferred provable ownership of a digital copy of the album, with pointers to the media files living on a long-term and decentralized file server like IPFS? Now your “ownership” of that album could outlive Bandcamp. Also, your proof of ownership could get you privileges such as an early concert ticket purchase window or a private audience with the artist. You might point to the ability for non-owners to “right-click, save as” the music files, but you can already stream any album on Bandcamp for free.
There is no less “security” in this model, only a layer of abstraction of the item itself away from Bandcamp, onto the blockchain, with digital ownership assigned to the buyer. Music listening is already free on Spotify, YouTube and notably, Bandcamp. Blockchains give the opportunity for patronage to come with recognition and perks without the need for another centralized proposition like Patreon.
- Often on Bandcamp today, you can buy physical collectibles such as vinyl, t-shirts, cassettes or other items direct from the artist. What if they added the ability to buy a digital collectible in some scarce quantity? Would more or less people opt for these digital collectibles over the physical vinyl?
Many believe digital is “less valuable” than physical, but we already know that many who buy vinyl don’t ever play them or even have a turntable — it’s merely a form of patronage and collecting. If the option to buy a digital collectible was added to Bandcamp album pages, certain artists would find creative uses for this feature, some number of fans would choose to collect the digital instead of the physical, and the ratio of digital vs. vinyl collecting would shift over the next fifteen years. I’d love to watch this happen over time; my bet is digital collecting will hit an inflection point just as media streaming did around 2012.
The ambitions could be set higher than I suggest above — digital packaging and payouts to creative collaborators like Metalabel is building would be very useful in the Bandcamp context.
Read more from our opinion section: You aren’t thinking hard enough about digital art
You could also imagine artists earning ownership in Bandcamp based on performance and a revenue stream for artists where the profits of the platform are paid out based on this ownership (what Visa was for banks, Bandcamp could be for artists).
But I like the simple thought experience described in the bullet points above particularly because the changes are subtle and simple, yet meaningful to both artists and fans, without asking either to change their behavior overnight.
But we should keep this in perspective — the entire recorded music industry made $26 billion in revenue in 2022, whereas Bandcamp has paid out just $1 billion to artists since 2008. Also, the examples above speak to how application developers in categories beyond music will integrate digital ownership slowly and optionally for their customers, rather than a Web3 “big bang” overnight.
Digital ownership is inevitable, but let’s be realistic about the problems it solves and how quickly this new paradigm is arriving to mainstream consumers.
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