Audio's evolution, Lost Tapes, Troll Markets Theorem, NFTrees, and Caribbean Bites
April 9, 2021 Edition
Welcome to Edition #50! Allow me to re-introduce myself.
“I get it. You have a podcast.”
Feeling Spaced Out
Recent weeks have seen a spike in news about AR & VR products, headlined by Microsoft’s agreement with the US Army to provide 120k HoloLens headsets over 10 years, in exchange for a paltry (potential) $21.88bn. (Verge) Facebook, too, has been in the news because of its own VR/AR efforts, including a promise of “social avatars.” (CNET)
AR isn’t just a visual medium. There have been a profusion of “audio AR” projects over the past year or two, with more coming soon. When you say “audio AR,” most people look at you blankly, or think of something like Detour’s guided walking app (RIP) or Zombies, Run!: an app that gamifies movement in physical spaces by overlaying a fantastical narrative.
Recently, a new company, Spatial, announced its suite of new augmented audio products. The company’s focused is on enabling users (architects, interior designers, and other audio creators) to produce high-quality audio experiences that feature “immersive, three-dimensional sound.”
Per The Verge, the goal is “ambient and interactive audio for public spaces that’s easy to create and more dynamic than the usual tracks.” [Ed.: Imagine arriving at Trillium HQ to be greeted by a lifelike recording of a pack of wild hyenas approaching from the southwest.] The functionality comes from positioning audio in space, and making it easy for anyone to engage in custom sound design by visualizing a 3D space and “placing audio objects” within. You can also program interactions between these audio objects, such that the sound design feels more dynamic than a static, pre-recorded track. It’s hard to immediately forecast this to be a run-away market success; nonetheless, it’s a cool application of audio AR technology and something that could find a niche B2B audience.
Lost Tapes of the 27 Club
We’ve spent a lot of time traversing the uncanny valley created by AI music in one form or another, most notably with deepfake music and the charming Robo Sinatra brought to us by OpenAI. Thus, I couldn’t pass up listening to a recent AI music project created by Over the Bridge, “a non-profit working to change the conversation about mental health and recovery in the music community.” (Input)
The project, titled Lost Tapes of the 27 Club, is powered by Google’s Magenta (which focuses on generative media creation) and features AI creations in the style of some of the famous artists who died at age 27: Jimi Hendrix, Jim Morrison, Kurt Cobain, and Amy Winehouse. I have to say: the results are impressive, even if human curation was exercised to “pick the best moments.” Apparently, the AI program analyzed “up to 30 songs from each chosen artist,” and then constructed new compositions from its synthesis of the sonic and lyrical elements. Here’s the Hendrix representation:
It’s interesting to hear what the AI program identified as distinctive elements: first, the trio instrumentation (guitar, bass, drums; characteristic of Hendrix’s various trios, including Band of Gypsies and The Experience). Additionally: the fuzz and wah effects on the lead guitar, and the way that the lead guitar doubles the vocal melody during the song’s verses, as well as how the guitar solo transitions between octaves for the instrumental break. Remarkably good!
The Nirvana recording is similarly strong, with the classic Cobain guitar parts, Grohl drums, and wall of sound production. No one really sounds like Jim Morrison, but even his AI manifestation is pretty good, largely thanks to the pitch-perfect imitation of Ray Manzarek’s organ and Robby Krieger’s guitar counterpoint. I feel the same about Amy Winehouse’s track: the instrumentation sounds right, but the vocals don’t come close to the real thing. Who could?
Elsewhere in this realm, a startup called Authentic Artists is “creating virtual musicians who perform their own concerts — initially in Twitch — and can respond to audience requests.” (Tech Crunch) Lil Miquela meets Lil Kim? Sure. I understand why this is a thing, and I can’t be that mad about it because the output looks pretty cool.
But, I’m still more excited about finding ways for human artists to augment themselves with technology—or create in novel ways inside virtual worlds like Roblox—than replacing them entirely with virtual equivalents. Even an earlier, related project like Gorillaz relied heavily on human creation, both visual and audio, to become a meaningful project. After all: if we hadn’t had generations of human artists, what data would people use to train these robo-approximations?
Troll Markets Theorem
If I were to return to an institution of higher learning to pursue a PhD—Readers WSG and EB know—I would focus my arduous years of academic research on a little concept called Troll Markets Theorem, or TMT. Though not known to anyone outside the Trillium HQ, it is plenty real to me.
The basic idea goes like this: the less convinced I am about something, really anything, the more successful that thing becomes. The less I use an app, the more venture capitalists pour gold bullion into its coffers. The less I like a concept, the more I am forced by the universe to encounter its incredible, history-defying success on a daily basis. Ergo: the markets are trolling me. Troll Markets Theorem. It’s that simple.
All jokes aside—the Trilliuminati lead charmed lives and have our fingers on the pulse—I have given up trying to understand how the capital markets work, particularly in the tech sector. A great example of this is Clubhouse. The single action I have taken the most inside Clubhouse is to invite other people who don’t really want to try it, while studiously avoiding actually joining any rooms myself. My baseline rate of usage was roughly 1 invite per week; and then it was none, once I deleted the app a few weeks back.
Enter TMT: Clubhouse is discussing raising more money at a $4bn valuation. (Bloomberg) To recap, the app is one year old, and closed a round of financing in January, at which time its valuation was $1bn. <4 months, >4X. Not bad! The news comes on the heels of reports that Twitter and Clubhouse held talks about a potential acquisition for around $4bn in value. (Tech Crunch) While Twitter has its own live audio product called Spaces, there’s no question that consolidation with Clubhouse would give the company a strategic advantage in seizing the “social audio moment.” For what it’s worth, anecdotally and through proxy data like search queries, user interest in Clubhouse seems to have waned since its moment in the spotlight earlier this year. Note that the below do not speak to existing user engagement and retention, which could well be solid (my own aside).
Clubhouse did recently announce its new Payments feature, a cool addition that enables users to send money “to their favorite creators or speakers.” (Tech Crunch) The functionality is limited to a “tipping” instantiation today, but is promising as a direct monetization mechanism that connects consumers and creators.
Notably, the company will not receive any portion of the payments: 100% will go to creators, with the consumer bearing the burden for Stripe’s processing fees (typically 2.9% + $0.30, with certain minimums). It’s worth acknowledging that Clubhouse added creator monetization much earlier in its lifecycle than almost any other UGC content platform; and, of course, it eschewed ads-based monetization for direct payments. It’ll be interesting to see how the company’s own revenue model evolves over time. For now: while I may not use Clubhouse myself, I’m glad to see the prioritization of this sort of commercial mechanism.
As a side note: Discord, a company that featured in last week’s edition as a ~$10bn target of Microsoft’s, has added Clubhouse-like functionality to its core messaging servers. Discord has long had voice chat for its gamer users; this update adds the “room/stage” concept from Clubhouse and enables a range of non-gaming audio interactions. LinkedIn is doing the same, and will likely cater more to the sort of conference-style and “thought leadership” moments that Clubhouse has begun to explore, for better and for much worse. Given the emerging user behavior around professional networking via live audio, LinkedIn’s ability to tie an audio presence to your professional profile makes some sense. What the product experience becomes is anyone’s guess.
Patreonomics
Four billion is the magic number these days. $4bn for Clubhouse. 4bn readers for Trillium. And now $4bn in valuation for creator economy OG Patreon. (WSJ) Indeed, Patreon has raised a fresh $155M in venture funding from firms like Tiger Global, thereby more than tripling the $1.2bn valuation it received when it closed its last round in…September 2020. What has changed about the company’s fundamentals since then, you ask? I could not tell you. But, the market for creator-focused technology companies has accelerated to all-time highs, with Cameo, Dispo, Substack, Clubhouse, and now Patreon raising rounds in the past few weeks.
As one can see from Graphtreon’s analysis, the pandemic has been good for Patreon, as dedicated fans have increased support for their favorite creators.
Patreon is still a household name for creators, with a solid product to match. At the same time, it’s safe to say that their head start on peer companies is diminishing, with a host of creator economy upstarts (and incumbents) actively turning attention to creator-fan monetization. It will be interesting to follow whether this becomes a market in which late-entrants have an advantage—perhaps as Clubhouse does by watching the monetization mistakes of its predecessors and choosing a different DTC course—and whether a winner-take-all dynamic is established. There is room for a number of participants in this market, particularly on a global basis, but the fever pitch of new venture and feature creation—not to mention capital deployment—will likely prove itself unsustainable over the longer-run.
NFTrees
It wouldn’t be a Trillium issue in 2021 without at least some sort of NFT mention. First: it’s worth reading Kyle Chayka’s New Yorker profile of Beeple, he of the $69M Christie’s auction and crypto backlash for converting his hard-earned gains from ETH into regular-old USD. If you’re so inclined, you can also use this handy Beeple Generator to create your own (substantially less valuable) digital artworks. I mean, just look at this masterpiece!
One of the things mentioned in Chayka’s profile is the ongoing debate over the environmental impact of NFTs. Without boring you with details: an article by Memo Akten showcased some concerning numbers quantifying the environmental impact of minting an NFT on the Ethereum blockchain (as currently constituted). There has been a secondary debate around the methodology used to generate these numbers, but, nonetheless, it’s generally accepted that cryptocurrencies that utilize energy-hungry “proof of work” schemes to verify transactions are not kind to the environment. “Proof of stake” systems, like the Flow blockchain that underpins NBA Top Shot, are an improvement. If you want details, I recommend this Verge article by Justine Calma.
Some artists who sell NFTs, like Beeple, have purchased carbon offsets as a mitigating measure. Other artists, including Damien Hirst, are experimenting with novel approaches. In Hirst’s case, he is providing the first drop for a new, “energy-efficient NFT ecosystem” created by ConsenSys. (Tech Crunch) The system, known as Palm, claims to be 99% more energy-efficient than proof of work incumbents.
Trillium is incubating a new project, soon-to-be-known as NFTrees. We promise no technical innovation nor awe-inspiring metrics. Instead, we simply commit to planting a money tree, also known as Pachira aquatica, for every 0.01 ETH that is sacrificed in the noble pursuit of a freshly minted NFT. If you happen to have a plot of available land, we’d love to hear from you.
For your ears only
Back in the dark days of December, I shared some music from Spanish DJ Cookin Soul, focusing specifically on his FREES series, in which he remixed artists like Action Bronson and Kendrick Lamar and matched the tracks with deepfake visual wizardry.
Now, as we move into spring and towards summer—and hopeful vaccination—I’m going back to the well to share Cookin Soul’s CARIBBEAN BITES project. Tune in for 30 minutes of tropical instrumentals and vacation vibes. My favorite, “Bon Bini,” and the full mixtape are below. I apologize in advance for the ad load. It is truly excruciating, and, alas, my NFT explorations have resulted in a plethora of “targeted” advertisements featuring crypto scams of all shapes and sizes. It alters—but does not quite destroy—the mood.
See you all next week.
N