Greetings to the growing Trilliuminati. Blinked and, somehow, it’s Friday again.
“How does it make you feel when I’m on the verge of tipping over?”
The Run(dgren)around
In the spirit of fairly esoteric quarantine-era music industry news, I present this TechCrunch piece about Todd Rundgren and his “geofenced virtual tour.” The initiative, perhaps confusingly known as the “Clearly Human Virtual Tour,” began on February 14th and will feature Rundgren and co. performing live from Chicago but visiting (virtually) 25 different U.S. cities. Their first “destination,” as it were, is lovely Buffalo, which makes total sense when you consider actually traveling to Buffalo in mid-February, pandemic or otherwise.
All of the shows will occur at 8pm local time, and will be augmented by virtual meet & greets with fans and screens displaying audience members whose IRL location corresponds with the appropriate “virtual” location for the show. My favorite detail, selected from copious options, is Rundgren’s statement that his band will “self-hypnotize” so as to spiritually transport themselves from city to city, without ever leaving Chicago (again, a place you might actually want to leave in the dead of winter). Rundgren says that they plan to “dress all the walls with posters, sports team memorabilia” and to “get food flown in from local eateries.”
I love absolutely everything about this. I honestly don’t know if I’ve ever consciously listened to a Todd Rundgren song in my life. But, I thought this was an interesting example of an artist who has used the pandemic to catalyze a new way of connecting with fans & generating an income. File under: things COVID-19 made us do that we’ll still do (to some extent) from this point forward.
Oh, the (meta)humanity!
As I continue to reflect on how best to transform into a full-time avatar so that my earthly presence can decamp for more tropical pastures, I found recent news of Epic’s new “MetaHuman” character creation tool to be particularly intriguing. (TechCrunch) The “cloud-based design app” enables just about anyone to render a “near-photorealistic character…in less than an hour.” (Input) I know what you’re thinking, and the answer is, “no, there’s no possible way this could be misused.”
The app is built on Epic’s famed Unreal Engine, which has underpinned everything from the original Unreal (1998) to Fortnite (timeless). And, I have to say, these MetaHumans are pretty remarkable. Yes, you can use them for your Clubhouse profile pic.
If you believe the general thesis that the volume and variety of digital social interactions will only increase—and in far more intricate virtual worlds—tools like this one should be recognized as critical infrastructure to enable everything from avatar-driven concerts—without significant professional involvement—to casual peer-to-peer interactions across a range of environments, including today’s games and tomorrow’s social networks. If you’re interested in learning more about Epic’s company history, I recommend listening to this episode of the Acquired podcast. And, if you’re curious to hear Epic founder Tim Sweeney articulate how he thinks about the “metaverse” and its underlying economy, check out the video interview below.
The NFT rabbit hole deepens
I pseudo-promised myself that I wouldn’t go on at length (again) regarding creators using non-fungible tokens to connect in new ways with fans (and generate real income). Nonetheless, a few interesting reads on this topic have emerged.
First, I generally can’t resist articles with titles in the form of “Is 2021 the year of [insert trend I find interesting]?,” and that remains true when it comes to Bruno Maçaes’s short article on the “theory of art, decentralized media,” and his first NFT. Maçaes is thoughtful in addressing the common criticism of digital art that I, too, often hear: “How is this valuable,” particularly when it can be easily copied? He writes about Italian artist Maurizio Cattelan taping a banana to a wall and selling two editions of the piece for $120,000. [Ed. as Maçaes notes, a performance artist subsequently ate the one exhibited at Art Basel in Miami.] The article is worth reading for its linking of how we have traditionally ascribed value to physical art to how a new generation of collectors values digital art, its description of the immutable “certificate of authenticity” expressed in the NFT, and its discussion of how NFTs enable artists to profit off secondary sales of their work, thus changing the economic incentives at play.
Also worth your time is Mark Cuban’s Shakespearean(ly)-titled blog post, “The Store of Value Generation is Kicking Your Ass and You Don’t Even Know It.” Cuban talks about his childhood stamp collecting days, describing his experience “finding inefficiencies” in this market and likening it to others who have collected and refurbished trading cards, art, and other physical items in the real world. And, I think rightly, Cuban asks what happens when this same behavior occurs in a world where “everything is digital” and “literally anything…can be a store of value.” Particularly for Gen Z, as I have said in the past, there is no distinguishing between a physical thing that has value and a digital thing that has value—in many cases, even when it comes to social relationships.
Cuban writes that items work as a store of value when there is “confirmation of scarcity” and “proof of existence,” both traits that NFTs possess, and concludes that “blockchain driven assets have now legitimately become stores of value.” For what it’s worth, you also don’t have to worry about maintaining the pristine quality of these digital goods. There’s an interesting social dynamic at play in the market for digital collectibles and, similarly, in the r/WallStreetBets community and others like it where people have realized that the value of an item (or a share of stock) can be influenced by a coordinated movement, regardless of underlying fundamentals.
The digital communal element is not to be underestimated; as Cuban notes, “with digital assets, acting in unison can bring to wealth to those who would not otherwise have access to it.” I still think we’re early in the NFT hype cycle, with disillusionment likely to come before too long—particularly the more we see people doing things like selling their tweets as NFTs—but feel that Cuban hits the nail on the head with his description of the dynamics here. Well worth a read, particularly because this piece, unlike many NFT-related articles, is written in plain English.
Lastly, by way of more tangible proof of this market’s growth: overall NFT sales have passed $100M in the last 30 days. [Ed.: musicians, a very recent addition to this creator-space, have sold $2.7M of NFTs in the last 6 months, raising interesting questions around growing awareness of non-streaming revenue sources.] Volume on OpenSea, the largest NFT resale marketplace, is up to $32M this month (400% month-over-month growth). NBA’s Top Shot digital collectibles initiative has set a record with “over $70M worth of moments since its October launch.” (TheDefiant.io)
Back on the “regular internet”
Selling tweets whose ownership can be memorialized on the blockchain is one thing. Apparently, The Real Twitter is also experimenting with new models, including the possibility of introducing subscription services, on-platform tipping, and “paid consumer-facing features like profile customization or an ‘undo send’ option.” (TechCrunch) The report builds on a comment that CEO Jack Dorsey made during the company’s Q2 2020 earnings call, in which he referenced a “complementary” subscription offering that could augment Twitter’s somewhat-stagnant advertising business.
Adding tipping, which is fast becoming a tablestakes creator monetization feature, makes sense in light of Twitter’s attempt to broaden its content inventory to include audio (Spaces) and newsletters (Revue). Indeed, Twitter is considering different ways to provide an “economic incentive to people who are contributing to Twitter,” as Jack Dorsey said at Goldman Sachs’ virtual Technology & Internet Conference last week. (Reuters) Once Twitter has users creating across three formats—short-form Tweets, long-form newsletters, and audio via Spaces—it makes sense that they’d want to entice their top creators to stay on-platform by giving them multiple ways to make money. Given the “pay-to-play” leverage that creators currently hold in the marketplace—with a host of consumer internet companies warring over their attention in a bid to keep unique and engaging content within their walls—Twitter may be considering these developments not simply due to an experimental urge but rather an existential imperative.
Speaking of tipping…
We wrote last week about Soundcloud’s rumored introduction of direct fan-creator payments, either in the form of tipping or, perhaps, user-centric streaming payouts where each user’s individual consumption determines the artists to whom their subscription revenue is distributed. On this topic, Bas Grasmayer wrote a thoughtful piece in which he claims that “access [to digital music] has been solved” but that “monetization hasn’t.”
Grasmayer contrasts Soundcloud—slow to the punch, as ever—with Bandcamp, the music platform that has been one of the most important and reliable sources of income for musicians over the course of the pandemic. He also compares the company with YouTube, which offers similar music discovery and streaming capabilities and has augmented its monetization offerings through Channel Memberships and various “paid digital goods” mechanisms like Super Chat (where users pay to have their comments pinned in a livestream chat). Where Soundcloud stands out, in Grasmayer’s view, is its ability to provide user discovery of hyper-relevant and undiscovered music, in nearly any niche, and its social components (including timed comments that unfurl as a track plays). [Ed.: It’s true: whatever your heart desires can be found on Soundcloud, along with many things that no one’s heart has ever desired.]
Grasmayer ultimately recommends that the company consider a few tactics, borrowed from the online gaming world, to increase fan-creator interaction and grow on-platform revenue. I like this list, and think it’s relevant to a whole host of consumer internet applications where content is at the core of the experience: leaderboards that establish top fans for an artist; the ability to pay to “claim visibility” on an artist’s page; and rewards for highly active consumers/patrons, not just creators.
I also think there should be a way to enable fans to monetize their tastemaking ability or, at least, get verified credit for being early to discover a given artist; this comes back to the related idea of “buying stock” in an artist early in their career, although one can’t really do such a wondrous thing yet because of a little thing called #REGULATION. For related reading, I recommend Cherie Hu’s excellent piece in DJ Mag: “How Patreon is helping electronic music survive during the pandemic.” It’s incredible to read that electronic-focused festivals and clubs have lost “as much as 75% of their income” due to COVID-19 shut-downs, and equally incredible to see that the membership platform’s “music category” has grown 200% in the last 6 months.
Dispo-sable capital
Per Axios, Dispo (a photo-sharing app co-founded by YouTuber David Dobrik) is garnering significant user interest, having accrued 3M total downloads since launch and hitting the 10,000 user “cap” for its new test version in just a few days. The app has a stripped-down aesthetic and a simple concept: making users wait until 9am the next day for their digital photos to “develop,” thus mimicking old-school (yep) disposable cameras. I dunno. The company raised a $4M seed round in Fall 2020 and is apparently already in talks with Sequoia, Andreessen Horowitz, and Benchmark to raise more. (The Information) Pencil me in for a $150M Series A valuation, sometime in the next 3-5 weeks, and a cool $1bn Series B sometime between December 2021 and this time next year. Why not!
The more interesting angle on this, aside from runaway capitalism, is that the company was co-founded by a YouTube creator. We’ve talked in the past about top-tier creators establishing themselves as next-gen holding companies, with burger chains and pizza franchises and colognes and a whole host of other money-making enterprises. The trend of founding tech startups—particularly in the consumer internet space where a creator’s brand value and audience is meaningful—is a natural one that we will see more in the months to come.
For your ears only
I’ve been listening to an obscene amount of music lately, to the point where I’ve debated leaving it on in the background during my innumerable video-calls. [Ed.: Likely a Q2 thing.] One of pieces that I’ve returned to frequently has been “Just Wrong,” an early release from an upcoming collab album featuring Pino Palladino (still the greatest name of any bass player, perhaps ever) and Blake Mills. [Ed.: I desperately want to ghostwrite the definitive Palladino memoir and title it “Pino Noir.”] It’s hard to define this collaboration, but its first release is a beautiful instrumental composition with lots of counterpoint.
The full album, Notes With Attachments comes out on March 12 and promises to be excellent, featuring legends including Chris Dave on drums. Dave, also known as “Daddy” (@Reader RW) is an outstanding drummer who has played with just about everyone, including Robert Glasper & D’Angelo. In fact, he and Pino serve as the rhythm section on my favorite D’Angelo bootlegs, including the mid-2010s recording below (@Reader WSG). Enjoy.
See you all next week.
N