• Already in 2023, over 10 different music AI models have been released by independent researchers and big-tech companies like Google and ByteDance, allowing users to generate custom tracks in seconds using a mere text prompt.

• Hundreds of thousands of AI-generated songs are now listed on streaming services.

• At large, generative AI tools for audio, text, and visual art have picked up tens of millions of users, forcing us to rethink traditional notions of creativity, ownership, and attribution.

At this critical juncture, we’re thrilled to release our Season 3 report on creative AI, which provides a comprehensive guide on the technology’s emerging opportunities and challenges for music.

Over the last three months, more than 50 contributors in our community came together to analyze and discuss the impact of creative AI across the music-industry life cycle, from music creation and ideation to distribution and monetization. As with previous seasons, we explored the landscape in a highly interdisciplinary and collaborative way, including:

• Curating a database of over 80 different music AI tools

• Annotating the terms of service for 11 AI companies

• Interviewing 15 different artists and startup founders

• Running an AI sentiment survey with over 150 responses

Our goal with this report is to bring more transparency on the current state of music AI to anyone with a stake in the outcome, including artists, rights holders, software developers, and startup founders. We hope our findings provide a helpful starting point for understanding the critical commercial, legal, and ethical issues at stake as AI continues to transform the business of creativity at large.

REPORT OVERVIEW

Believe it or not, this is our first season with no articles.

Instead, we've produced three slide decks and one interview podcast — each dedicated to a particular lens on the creative AI landscape, spanning creative, legal, commercial, and ethical concerns.

Our goals with this new format are to make our research more accessible to an industry audience, present our findings in a more shareable and visually striking way, and accommodate a wider range of preferences for consuming information.

You can click directly to each chapter below:

• ​The state of music AI tools [deck] — Digging into music AI tooling, use cases, and business strategies across the creative lifecycle, informed by our own music AI database.

• ​Temp check: AI sentiment across the industry [deck] — Understanding music-industry needs and sentiments around creative AI, from a survey of over 150 stakeholders.

• ​AI and music copyright [deck] — Addressing artists' legal questions about creative AI and ownership, through the lens of AI tools' terms of use.

• ​Building a creative AI community [podcast] — Looking behind the scenes at how we built a community around creative AI experimentation — and are incorporating AI into our larger strategy.

FREE WEBINAR

We'll be hosting a free kickoff celebration tomorrow (Friday, February 16) from 1PM–2:30PM EST via Zoom.

During the event, our community researchers will lead us through the main findings from our three season decks. We'll leave around 30 minutes at the end for attendees to ask questions about our research and the future of AI in the music industry at large.

You can learn more and sign up here.

HOW TO SUPPORT OUR RESEARCH

With the exception of our Season 3 podcast, this report is available exclusively to paying members.

We're an independent, 100% bootstrapped research community — so if you found our research valuable, we'd really appreciate your support! We have multiple support options depending on your payment preferences and budget. All financial contributors to Season 3 will be credited on our report landing page.

MAKE A ONE-TIME DONATION

You can make a fiat or crypto donation of any size to show your support for Season 3. All donations will be split between the W&M organization and our Season 3 contributors.

• Fiat: Click here​

• Crypto: Click here​

MINT OUR SEASON 3 PASSES

Both new and existing members with crypto wallets can mint our Season 3 NFT passes, which were designed by Ana Carolina and give holders access to a wide range of research and community benefits. All proceeds will be split between our Season 3 contributors and our crypto treasury.

We offer both annual and lifetime NFTs for Season 3. All NFT holders get access to Water & Music's membership benefits; lifetime NFT holders additionally get access to a one-on-one AI-related consultation with a core W&M team member, exclusive merch, and early access to new W&M products in development.

​Learn more and mint here. STREAM holders as well as members of several aligned Web3 orgs are on our 24-hour early allowlist — make sure to check the site to see if you're eligible.

Thanks so much for your support! <3

As the holidays are fast approaching, I wanted to send a personal note reflecting on how far we’ve come as a community in the last year — and sharing why I think now is an especially opportune time to join the Water & Music membership, given the incredible research currently happening behind the scenes.

2022 IN REVIEW: From newsletter to network

Exactly one year ago, from December 13–17, 2021, we rolled out our Season 1 collaborative research report on music and Web3.

While Season 1 itself came together in a chaotic whim of just eight weeks, the launch was the culmination of several years worth of researching music/tech trends — through the maturation of the streaming landscape, the disruptive COVID-19 pandemic, and two different blockchain hype cycles. Throughout this process, I slowly came to the realization that there must be a better way to cover and learn about the music business.

How could we build a new media and learning ecosystem for the industry that incentivized quality of analysis over quantity of output; rewarded curiosity and skill-building over “expertise” and seniority; encouraged collaborating across borders over maintaining silos; and did proper justice to the diversity and ingenuity of people working in the industry today?

With the help of an incredible team and community — plus critical activation energy from the Seed Club accelerator — I set out in fall 2021 to codify these values into a new collaborative, peer-to-peer research and knowledge framework for music.

Fast-forward to today, and the amount of progress we’ve made at Water & Music is nothing short of impressive. In the last year, our community has:

• ✍️ Published over 100 articles, reports, and newsletters

• 📚 Run two educational workshops as part of our new Academy

• 🗣️ Spoken at nearly 30 events, both online and IRL across four continents

• ➡️ Distributed our $STREAM token to over 500 wallets

• 🤝 Rewritten our mission statement to reflect our expansion from newsletter to network

Key highlights include, but are certainly not limited to:

• 📈 An analysis of 2021 music NFT sales trends​

• 🤖 A crowdsourced database of music AI tools​

• 🔮 A **choose-your-own-adventure metaverse strategy guide**​

• 💼 A speaker series on the evolution of artist teams​

• 🎨 A hybrid research/art project on community design, in collaboration with Friends With Benefits

• 📧 Topic-specific newsletters The Score (gaming), Sidechain (music/Web3), and Career Connections (industry hiring trends)

2022 also kicked the butts of every DAO leader I know, including myself. On the fly, I learned to juggle leading a team as it doubles in size, fostering a community across both online and offline spaces, scaling an editorial voice across dozens of contributors, navigating a bear market, and designing a DAO with no prior playbook, all at the same time.

A special thank-you to the W&M core team — Kat Bassett (community ops), Alex Flores (tech), Diana Gremore (events/education), Brodie Conley (ops/governance), Yung Spielburg (collab research), and core teammate emeritus Brooke Jackson (database/ops) — for navigating this transition with so much grace, being instrumental sounding boards and sparring partners, and serving as role models for growing an organization thoughtfully without compromising on vision and rigor.

Hopefully, the work we’ve done this year has proven that our collaborative model is capable of producing higher-quality, more nuanced insights on industry trends at a faster rate than the status quo. And even still, we have a LOT of challenging and exciting work ahead of us.

In 2023, you’ll see us invest not only in even more original research, but also in areas like streamlining the contribution process for busy professionals, formalizing our governance strategy, and expanding our IRL events network — all in service of producing the innovative insights and mindsets we need to drive the music industry forward.

We also plan on reviving our free tier formally beginning in January 2023, to keep our wider network posted on key takeaways from our research and other activities going on within our membership — so stay tuned!

Why join us now?

As of writing, we’re around halfway through our Season 3 research sprint on creative AI, which will be released in winter 2023.

ICYMI, our “seasons” are our flagship outputs, consisting of in-depth explorations of music/tech trends that feel especially urgent, noisy, or under-explored, and that would benefit from more large-scale, distributed research efforts. We decided to focus on AI for our latest sprint because the topic is characterized by both a sprawling, multidisciplinary diversity of creative and commercial approaches, and an overwhelming level of hype (and resulting misinformation). Just like with our previous season topics (Web3 and the metaverse), this combination of factors creates the perfect breeding ground for a more bottom-up, emergent approach to research.

Against the backdrop of this season, there are four specific reasons why I think now is an especially exciting and opportune time to join our community and follow everything that’s going on:

⌛ Critical, real-time market analysis

Our fluid, nimble, and distributed approach to research allows us to track and synthesize market developments in real time, while incorporating bottom-up perspectives from our community that might otherwise go overlooked by the mainstream media.

In the Season 3 hub in our Discord server, we’re currently engaging in highly interdisciplinary research on creative AI — compiling music/AI market maps, annotating legal agreements, surveying artists about their sentiment on the technology, and getting hands-on experience creating with the tools themselves.

🎯 Actionable guidance for industry pros

As a music-tech research organization, we also see ourselves playing a critical role as a bridge — not just keeping a pulse on bleeding-edge tech trends, but also unpacking how those trends concretely impact everyday music-industry strategies and careers.

With AI in particular, we’re exploring questions like: How should artists and developers approach issues of copyright and data transparency in their creative AI experiments? What monetization models make the most sense for AI tools, based on their target user bases? How might the adoption of AI technology impact the set of skills that are in demand in the music industry at large?

🧪 Hands-on access to early products

A critical part of what makes Season 3 distinct from our previous season sprints is the amount of hands-on experimentation with the tools we are covering. Many early-stage music AI tools are being built in real time by our own community members, making our research stronger and more nuanced through direct access to of-the-moment development updates.

We've also integrated several generative AI models directly into our Discord server, including Midjourney, Stable Diffusion, and GPT-3, allowing members to play around with these tools in a safe, focused environment. We run interactive workshops every week in our server around these tools, guided by prompts such as generating song lyrics, PFPs, and even baseline strategy and contract templates.

🪟 Window into emergent organizational practices

Aside from keeping up to date with the creative AI market, being a Water & Music member is also an unparalleled opportunity to play a direct part in an organizational experiment.

Through Season 3, we will continue to strengthen our groundbreaking processes for tracking, crediting, and rewarding collaborative research via our $STREAM token, as well as laying out formal governance frameworks for follow-up research. At the same time, on a meta level, we’re thinking through how to incorporate creative AI into our business operations. We see the potential for AI to reduce the cost of several key parts of our research process — brainstorming ideas, conducting literature reviews, synthesizing information, editing pieces for voice — in a way that is ethical and does not compromise on the intellectual rigor and distinct perspective that the W&M community is known for. We plan on keeping our community up to speed on these shifts, providing a window into how media organizations could evolve in the near future.

I really do hope you’ll join us! If any of the above interests you, click here to learn about our membership benefits and options.

In fact, since you got all the way here, you deserve a special holiday prize: Use the coupon JOINUS2023 for 25% off your first quarter or year with us. (Coupon valid until January 2, 2023, and applies only to first-time members and those reactivating expired memberships.)

Thanks so much to all of you for your interest and support thus far, and I’m thrilled to see what the next year holds for our community!

Best, Cherie Hu, Founder

You can also read this article on our website.

One of the most common pieces of feedback we receive from Water & Music members — both in passing and through our regular surveys — is that our community is keen for us to expand into education.

There’s no denying that the music industry is changing fast, and many professionals feel that they are struggling to keep up. In our last community-wide survey, our respondents reported feeling overwhelmed at the rapid rate of technological change, and anxious that their particular area of the industry might fall behind. Traditional methods of industry education —whether university degrees or organization-led professional development — arguably fall short of keeping pace with this dynamic environment, where the goalposts for “best practices” are constantly shifting.

In addition to the rapid rate of industry change, many of us are still feeling the effects of COVID lockdowns and widespread work-from-home initiatives. While remote work has dramatically improved conditions around accessibility, flexible schedules, and financial costs for many industry professionals, it has also made building meaningful industry connections a little more challenging. Aside from our research, one of the main benefits that a Water & Music membership offers is access to a global community of music-industry artists, founders and tastemakers. We knew that many of our community members would jump at the chance to forge deeper connections with each other, as well as the opportunity to learn.

And as anyone who has read our previous behind-the-scenes posts will know, Water & Music’s ethos is all about developing innovative, horizontal approaches to research. Translating a similar ethos to education — namely, by designing and executing on a learning experience with and for our community members — offered the perfect opportunity to bring our music/tech research to life, in a way that was even more approachable, interactive, and actionable.

We thought this method would work particularly well for Web3-related topics. Let’s be real — if there’s one area of the music and tech ecosystem that could benefit from more clarity and approachability, it’s Web3. (In fact, our previous research highlights lack of education as one of the top concerns about music and Web3 today, shared among both industry professionals and music fans.)

All of these factors led to the formation of our first Water & Music Academy pilot on building Web3-native music communities, for a small, application-based cohort of around 20 students in our membership.

Embracing emergent strategy, rapid iteration cycles, and transparent feedback loops with our community every step of the way, we went from initial ideation to full execution of our Academy pilot in just under 100 days (January 13 to April 22, 2022). Below, we outline how we did it, the opportunities and challenges we ran into along the way, and how we will apply these learnings to our future educational offerings.

The ideation process (AKA the mandatory FigJam session)

The idea of a Water & Music educational initiative had been floating around the community and the core team’s consciousness for months, particularly from our Community Ops lead Kat Rodgers. But it wasn’t until Maarten Walraven — a longtime W&M community member, with a PhD and a passion for music/tech education — created a one-page proposal outlining his vision for a W&M Academy that we began putting a plan into action.

While we had an inkling that we’d like to focus on something Web3-related for the Academy’s first iteration, we wanted to check in with our community first. So, in true DAO fashion, we asked our community members for their say on what they’d like to learn and how they’d like to learn it — and obviously we turned to FigJam to facilitate our brainstorming.

We ran a live brainstorming session in FigJam during our weekly town hall on January 13, 2022. You can see the full results of the session here.

The key takeaways were:

• Web3 was overwhelmingly the most popular subject area for our members, with respondents showing particular interest around smart contract development and community management for Web3 projects.

• Respondents were reluctant to attend a lengthy, lecture-style course. Instead, they wanted a cohort-based, sprint-style mini-course, with plenty of group work and high levels of individual accountability.

• Respondents wanted the course to include tangible takeaways, plenty of opportunities to catch up and follow along async (lecture notes, recordings), and the opportunity to build connections with other community members.

We decided to hold a lazy consensus vote to decide between contracts and community management as our focus within Web3, with community management winning out by a small margin:

The problem with online learning

With our first pilot topic settled, we then turned our attention to how we were going to learn about it.

Arguably, it’s never been easier today to learn whatever topic you want. There’s been an explosion of free, self-directed online courses (often in the form of massive open online courses, or MOOCs), covering just about every subject area and level of depth you can imagine. But the success rates for these courses are woeful. An overwhelming 95% of MOOC students drop out before completion — a statistic that many attribute to the absence of hands-on feedback and direction from course tutors.

In contrast, many of our community expressed their admiration for cohort-based executive education programs, such as the altMBA or those offered through Maven. As we researched these programs, it became clear to us that the primary appeal of these courses is how they center community and interpersonal connections — making community-building itself a key factor in the learning process, and breaking down the hierarchical structure inherent in traditional teaching dynamics.

This format, then, ties in nicely with Water & Music’s community-driven model. One of the key benefits of a Water & Music membership is access to a vibrant community and support system of music-obsessed creators and builders. We’ve always said that we have as much to learn from each other, as you do from us, and have invested as much time building a community horizontally, as we have done creating research for you to consume vertically. In fact, our transition to a tokenized research framework has allowed us to co-produce our research alongside our community, resulting in an even tighter feedback loop between the content we produce and the community that inspires us.

Our first iteration of the Water & Music Academy also drew inspiration from DAO models and culture more generally. Many DAOs today include Web3 educational initiatives as a key part of their growth strategies, upskilling members on using complex Web3 applications and technologies at the same time that they’re being inducted into the DAO. Some excellent examples of DAO education can be found in Forefront’s Digital Economy Canon and BanklessDAO’s Bankless Academy.

While these courses tend to be self-directed (similar to a MOOC), DAOs also tend to bolster their educational offerings with plenty of hands-on, human-centric elements, like Twitter Spaces and other online events, as well as innovative digital touchpoints and “gamification” tactics such as allowing DAO members to collect crypto, tokens, or POAPs as they learn.

At large, DAOs thrive on horizontal, community-driven dynamism and accountability. If you aren’t willing to embrace these qualities, it’s unlikely that the highly emergent (and arguably chaotic) structure of DAOs will be for you.

DAO-driven curriculum design

Like many W&M projects, we built the Academy pilot in public, and in close collaboration with our community. We encouraged our members to suggest any readings or resources they had personally found useful, and asked for their input on everything from deliverables to class length and frequency. We ultimately decided on the following course structure:

• Week 1: Introduction to Web3 music communities

• Week 2: Introduction to social tokens

• Week 3: Case studies

• Week 4: Community-building strategies

• Week 5: Platforms, tools, and metrics

• Week 6: Debrief

While Kat (Community Lead) and Maarten (Project Lead) were ultimately responsible for driving the course forward, several community members also significantly influenced the course design. Nicolas Madoery in particular proposed approaching each topic using a triad structure — spending one session discussing the theory behind the topic, one session discussing our experience (or lack thereof) with the topic at hand, and one session to present a practical task, allowing us to put our new knowledge into action.

While co-creating a class with students may seem antithetical to how educational courses usually run, we believe it was actually one of the most successful elements of the course:

• Allowing the students to provide their input into course design and content at an early stage removed the possibility of the material being uninteresting or irrelevant to their day-to-day work.

• This co-creation process also encouraged a sense of ownership from the very outset of the course, which translated into high levels of attendance and engagement throughout the course’s runtime.

What worked?

The passionate, diverse cohort

As soon as we landed on Web3 as a topic, we knew it was essential that we gathered together as diverse and as eclectic a cohort as possible. The lack of diversity in the cryptosphere — manifesting both as a lack of racial and gender diversity, and as a lack of nuance, with online discourse polarized between toxic positivity and toxic negativity — continues to prevent productive discussions from taking place.

During our application process, we specifically designed our questions to attract a varied cohort, and hand-selected our class to reflect as wide a range of voices, backgrounds, and identities as possible. We were particularly keen to include crypto-skeptics in our cohort, to ensure that our discussions were as balanced as possible.

In fact, we received the following testimonial from a student, who had self-identified as critical of Web3:

“The academy forced me to learn both sides of the web3 arguments, but also to hear from fellow web3/music travelers and what their experiences were like. The combination of having a small group to express my ideas/concerns with made the course invaluable to me.”

Depth, nuance — and honesty

In the survey we sent out after the Academy had ended, many of our students praised the level of detail with which they were able to dive into in our discussions. This is a key element of why having a balanced, diverse range of discussions is so valuable.  As soon as we ensured students that the conversation wouldn’t fall prey to either fluffy hopium or crypto-bashing, we were able to get down to the business of discussing the practicalities of these emerging cultures and technologies.

We were also well aware that we were dealing with a handful of emerging disciplines in an even more emerging market. Music community management is still a relatively new discipline (compared to more mature marketing functions like PR or social media), and Web3 strategy and planning is even newer. During our sessions, we tried to be upfront about the fact that, for the most part, we’re in uncharted territory and are learning as we go. This expectation- and tone-setting upfront contributed to our sessions having a more relaxed, exploratory atmosphere, where we encouraged students to question perceived orthodoxies and approach case studies with a curious, critical mindset.

Balancing theory and practicalities

While there’s plenty of fascinating theory underpinning Web3 technologies, ultimately most of our course participants applied to our Academy to learn something they can apply more practically — either to their day jobs in the music industry, or to their own careers as artists. During our course planning, we were careful to strike a balance between diving into the theory behind Web3, and ensuring our students left our sessions with tangible resources and frameworks.

Our final deliverable was a customer journey spreadsheet (based on the fan journey spreadsheet created for us by previous W&M contributor Jeremie Joubert), which guided our students through each fan touchpoint while planning the logistics behind dropping a token or NFT — a resource they can take away and use to plan their own Web3 projects.

Our incredible guests

One of the most unique and refreshing features of Web3 culture is the willingness of its practitioners to share knowledge freely and democratically. That couldn’t have been better embodied by our guest speakers — we were truly blown away by their expertise, enthusiasm and generosity.

A huge thanks to Bas Grasmayer (COLORSxCOMMUNITY), BlackDave, Nicole D’Avis (Seed Club), Jeff Nicholas (WarpSound), and Andrew Hong (Dune/Mirror/OurNetwork) for their time, energy and generosity. <3

What could be improved?

Embrace chaos

In the planning stages for the Academy, we spent plenty of time researching how other digital learning projects in the past divided up roles and responsibilities. We attempted to use a framework from the Digital Learning Institute, dividing community members interested in helping out with the Academy projects into five roles: Program Manager, Project Manager, Subject Matter Expert, Instructional Designer, and eLearning Developer.

But ultimately, we decided to drop the framework. It felt like there was somewhat of a culture clash between the rigidity of preset roles and the highly emergent, task-oriented nature of labor division in DAOs. One of the key lessons we’ve learned from working on the Academy pilot is that flexibility and willingness to iterate while keeping channels of communication clear and open will always trump sticking to a plan, especially when working in a DAO.

Time zones and calendar juggling

Anyone who has done anything in a DAO will know that time zones can be a serious pain point, and this was the case with the Academy project. We had to find a time slot which worked for Eastern, Pacific, Central, BST, UTC, and TST. Serious respect has to be given to Academy participant Henry Chen, who managed to regularly attend sessions despite being based in Taiwan, meaning that most of our sessions took place between midnight and 4AM for him.

Ultimately, while messing up your sleeping patterns might be (just!) sustainable over a five week period, it obviously isn’t in the long-term. Water & Music has community members in every single continent, and we’re proud to be a global community. We want to reflect the diversity of our community in everything that we do, and ensure that a Water & Music membership benefits everyone, not just members located in a specific timezone.

Which brings us to our next point for improvement…

More async learning opportunities and evergreen resources

Ultimately, while much of the success of the course was due to the specific chemistry and connections within the cohort, there’s plenty more we can do to capture learnings and value asynchronously, and make Academy discussions accessible for those who aren’t able to join in real time. While we did make sure to provide recordings and notes for each session, in the next iteration, we’d like to invest more time in distilling our conversations into evergreen resources and learning materials. Over time, this will build up into a library of learning resources, which Water & Music members will be able to explore on their own time and use to support their pioneering work with music and technology for years to come.

In conclusion…

We’re already putting plans in action for the next iteration of the Water & Music Academy. If you’d like to join us, and hone your skills alongside fellow music industry builders and innovators, you can sign up for a Water & Music membership here.

About Water & Music

Water & Music is a newsletter and research DAO on a mission to empower the music industry with the knowledge, network, and skills to do more innovative and progressive work with technology. We accomplish this through a highly social and cooperative approach to intelligence — building dynamic, collaborative systems for producing, exchanging, and distributing cutting-edge insights on emerging music/tech trends.

Our membership is home to 1,500+ professionals across music and entertainment, spanning everyone from indie artists and startup founders to marketers, investors, and C-Suite executives at major music companies. In January 2022, we launched our $STREAM governance token for rewarding contributors to our collaborative research and editorial projects, which is now in the hands of over 400 supporters in our community. What makes our work stand out is our relentless curiosity, our penchant for experimentation, our passion for interdisciplinary thinking, and our recognition of constructive critique as a driving force of progress in music, tech, and culture.

After publishing over 40,000 words on the music/Web3 ecosystem in our Season 1 and Season 1.5 collaborative reports, we’re excited to work with our community on exploring a wider range of topics in a similarly collaborative fashion for Season 2 — with the goal not only of breaking new experimental ground in music and tech, but also of onboarding a new cohort of DAO contributors from both inside and outside of Web3-native communities.

WHAT

An eight-week collaborative research sprint in the W&M community dedicated to researching urgent questions — and devising actionable, evergreen frameworks and solutions — related to the future of music in the metaverse.

WHY

There are three main arguments for why now is the right time to study music in the metaverse, in the collaborative fashion that our DAO is known for:

The DAO argument: The “metaverse” as a headless brand

“The metaverse” as a concept is characterized by a combination of sprawling diversity and lack of precision that creates the perfect breeding ground for an emerging approach to research.

Like "Web3," "metaverse" is what you could call a "headless brand" — a decentralized concept characterized by the lack of a coherent identity and the presence of multiple conflicting narratives competing for attention. In previous email digests, we also referred to this problem as “semantic satiation.”

Headless brands arguably require equally headless, decentralized approaches to research to really do justice in a nuanced and holistic way. We demonstrated this with our groundbreaking reports and findings on Web3, which arguably were possible only because of our open approach to collaboration with our community and with the wider Web3 ecosystem. We believe the sprawling nature of the metaverse is the natural next topic to tackle as a DAO with similar methodologies.

For example, calling something a "metaverse company" has roughly the same amount of precision today as calling something an "internet company.” You could be talking about one of dozens of different technologies or industries — including but not limited to livestreaming, gaming, VR/AR/MR, 3D design, digital identity/avatars, social media, digital fashion, and, yes, Web3 — not all of which are talking to each other or have the same approaches to business models, marketing or community engagement. Highlighting "the metaverse" as our S2 theme gives license to our community to dive deep into rabbit holes around music's relationship to a wider range of different emerging technologies where they otherwise wouldn't get the opportunity to do so, and in a way that can expand our coverage and research far beyond the Web3 focus we've had in the last six months.

Another major source of conflicting narratives in “the metaverse” is whether it should be centralized (à la Meta, Epic Games) or decentralized (à la Decentraland, Sandbox, PangeaDAO). W&M is one of the few publications that sits squarely at the nexus of Web3- and Web2-native music-industry professionals, and the metaverse is an ideal canvas for examining the underlying tensions between these two worlds.

All in all, the most inaccurate statement we could make about "the metaverse" or "Web3" is that there is a singular, unifying approach on where those technologies and industries will go. Instead, we need to make space for a more fluid, nuanced ecosystem of perspectives, interests and possibilities that our community sees for how tech can evolve, and what questions are considered most interesting and urgent to explore.

The business argument: Unprecedented investment in music metaverse companies

The “metaverse” as a concept has been taking up an increasing share of news announcements, startup funding rounds, and general partnership deals in the music/tech industries.

In our databases, we’ve tracked over $2.3 billion in private funding rounds in music metaverse companies since January 2021, across areas including livestreaming, gaming, avatars, VR/AR/MR, spatial audio, and general immersive media. Meanwhile, ongoing news like Epic Games’ acquisition of Bandcamp raise critical questions about how the music/metaverse relationship will evolve, especially with respect to artist-level accessibility and industry-wide power dynamics.

Similar to Web3 (or any other emerging technology), this hype also creates a lot of noise. There is a significant need for an independent voice to help connect the dots among all these different deals and news and cultivate a shared understanding across industries for what “the metaverse” even means, and how it can evolve in the future. As a distributed and collaborative research collective, W&M has built a reputation as the go-to dot-connector in music/tech, and we can play a similarly crucial role with this new subject matter.

Importantly, W&M has published several metaverse-related articles in the past (examples here, here, here, and here) — but most of those articles were published in 2019 and 2020. We are certainly due for a revisit and a refresh on our perspective, and in much more collaborative fashion, given how much the music/tech market has changed and how much our own capabilities as a DAO have expanded.

The builder argument: Creativity, not just business

A core part of W&M’s editorial voice and culture is examining industry-specific issues with a highly interdisciplinary, systems-oriented approach — regularly drawing inspiration from other fields like gaming, film, and fashion as we paint our picture of where music and tech is headed.

By focusing on the metaverse as our S2 theme, we have the potential to experiment in much more interesting and ambitious ways with the formats of our reports. A modular, multimedia research paper presented in VR? A new interactive tool for musicians to create their own digital avatars? A gaming experience bringing the worldbuilding behind a W&M artist’s latest album to life?

The possibilities are virtually endless for learning by doing and engaging directly with the very technologies we are covering, in addition to turning our research insights into tangible products and tools that artists and their surrounding teams/communities can use. This ethos mirrors our work in Seasons 1 and 1.5 — where we not only used Web3-native tools for monetization and compensation around our reports, but also built interactive tools that artists have already begun using in both practical and educational capacities (e.g. our music NFT contract template).

Moreover, with a topic like the metaverse, we can dive deep not just into commercial and technical implications, but also into creative implications.

Many of our community members are excited about metaverse-related tools not so much because of the commercial opportunities, but more because of the new world-building experiences they enable around music and fan communities. Highlighting the impact of emerging technology on music creativity as well as capital flows is crucial for making our music/tech coverage in general more holistic in the long term — especially catering to the growing segment of our community members who are artists.

WHEN

Below is a rough roadmap for Season 2. Timelines for previous seasons have usually changed (read: extended) around halfway through, so we’ll likely revisit our schedules in mid-May accordingly — or even earlier, depending on the ambitions that emerge during the first ideation week.

• APR 22–28 - official ideation + synthesis week

• APR 29 - finalize initial project leads/roles/teams

• MAY 2–JUN 27 - research sprints with weekly calls and updates

• JUN 27–JUL 1 - rollout week

• JUL 5–31 - “off-season” period to focus on reflection, contributor compensation/feedback, extended promotion/events and planning for season 3

WHAT NOW

To kick off ideation week for Season 2, we’ll be hosting an official live brainstorming session using FigJam during our next members-only Town Hall on Friday, April 22 from 12PM–1PM EDT.

During this session, we’ll ask our community questions such as:

• How do you personally define "the metaverse"?

• What kinds of technologies do you associate most strongly with the metaverse? Which of these technologies is most exciting to you right now, and why?

• What are the most necessary elements at the core of a "musical metaverse" — i.e. elements without which such a concept could not exist?

• What are some crazy ideas for formats we can experiment with for this Season 2 report?

Join our membership today to tune into the town hall, take part in our ideation phase, and follow our research process as it unfolds!

Since our Season 1 launch, the music/Web3 ecosystem has continued to evolve at a rapid pace. In the same breath that celebrities like Snoop Dogg and Steve Aoki are going all-in on NFTs and social tokens, we’re hearing about yet more music NFT scams and rampant fraud on the world’s biggest NFT marketplaces. Startups like Royal are raising tens of millions of dollars in venture-capital funding on the thesis that music royalty NFTs will become a valuable asset for fans and investors alike, while artist social tokens like $RAC are becoming available on mainstream crypto exchanges for the first time. Deals like PleasrDAO’s acquisition of the single copy of the Wu-Tang Clan’s Once Upon A Time in Shaolin are gradually bringing cultural DAOs into the sphere of mainstream awareness.

The conglomeration of all these trends represents a major inflection point in the music industry’s mental model for what’s possible with Web3, and will serve as a major test for the ecosystem as a whole with respect to scaling technology, messaging and adoption.

With this rapid change in mind, we’re excited to unveil our follow-up “Season 1.5” report, which builds upon and scales our learnings from Season 1 with a new set of iterative, modular resources for artists, founders and innovators.

Over the last two months, 90+ contributors in our community helped assemble the following projects, which will be rolling out over the next five days:

• March 7 (today): An 11-part interview series on the state of music DAOs, following up on our tech-focused research from Season 1 that resulted in a market map of music/Web3 tools for artists.

• March 8: A deep-dive analysis of music NFT platforms’ onboarding strategies, following up on our Season 1 analysis of how artists across career stages are onboarding their fan bases into Web3.

• March 9: A modular music NFT contract template, following up on our critical examination from Season 1 about the challenges of defining legal “ownership” of music NFTs.

• March 10: A survey analysis on the music industry’s sentiment around Web3, following up on the fan-facing Web3 sentiment survey we ran for our onboarding chapter in Season 1.

• March 11: A community initiative translating our S1 research into Spanish, as part of a new effort to expand the international reach of both Water & Music’s research and Web3 educational resources at large.

WHY “1.5”? OR, FROM PROSPECTING TO SCAFFOLDING

We decided to designate this season as “1.5” not only because our research topics follow up directly on those from Season 1, but also because we’re hard at work within our DAO to formalize a long-term, collaborative research model that we can hand over to our community for future seasons.

From a philosophical standpoint, our core team has conceptualized this transition as the difference between prospecting and scaffolding.

While our Season 1 research process has some structure in hindsight (as we outlined in this Mirror post), putting it together in real time was an experience of pure chaos, in the best way possible. Dozens of contributors came together in our Discord server to try to make sense of the wider music/Web3 landscape and to figure out what “collaborative research” even meant in the first place — assembling groundbreaking knowledge from out of the ether, with curiosity and generosity as our primary engines. This could be described as prospecting, or the process of searching through and mapping out a territory that was previously unexplored.

In contrast, much of our energy around Season 1.5 has been dedicated to taking key learnings from Season 1 and building the foundational systems, processes and tools that we can give to the community to continue this work on their own. This could be described as scaffolding, or the process of building more formalized architectures to support emergent behavior. As we wrote in our Mirror post “Rethinking gamification for DAOs”:

“As a DAO, our overarching goal at W&M is not just to serve as a reliable source of music/tech trend analysis for an industry-facing audience, but also to build a system for curious, ambitious community members to execute on their own emergent research and educational agendas.”

Throughout Season 1.5, we have been experimenting with new formats for conducting, publishing and communicating our research, with a focus on finding evergreen frameworks that can be easily adapted in future seasons to accommodate our members’ evolving interests and skill sets. Hopefully, the rollout this week will make it clear that the ecosystem of the resources and products we produce as a research collective can expand much further beyond just a single, longform report, in terms of both format and impact:

Iterative publishing cycles

Over the course of Season 1.5, we conducted over 20(!) interviews with founders of music DAOs and music/Web3 platforms. In the case of our music DAO project, we published 11 different interview summaries over the course of eight weeks on the Water & Music website, totaling around 15,000 words. Contributors also presented their summaries on member-exclusive calls in our Discord server every Wednesday evening, often bringing in the DAO leaders themselves to give additional context on our findings. These calls became a core learning/synthesis "ritual" in our community, complemented by ongoing articles that helped raise awareness of the research we were doing. This approach drew tighter connections among our media strategy, research strategy and community strategy, and helped us lean even more into our core ethos of “process as product” — namely, the stance that our collaborative process is as much a value proposition for our members as whatever end products we publish.

Longitudinal studies incorporating first-party data

Our artist and music-industry Web3 sentiment survey from Season 1.5 is the second survey we’ve run in the past four months. There’s a potential opportunity to rerun this survey on a regular basis over a longer period of time — expanding our research into a more longitudinal study of the relationship between music and Web3, while strengthening W&M’s reputation as a source of first-party data about music/tech trends. This approach could complement the work we’ve already been doing for several years of tracking startup investments and deals in our members-only databases.

Scholarship as service

As part of our music NFT contract template project, we will be publishing not only an educational article, but also an interactive site that we hope artists will incorporate into their own NFT drops. This paves a potential path forward for closing the gap between scholarship and service — namely, always ensuring that our research is not only rigorous, but points to actionable solutions that readers can apply to their own work. In this vein, we’re inspired by other media/research DAOs and collectives like Forefront, Smart Contract Research Forum, Token Engineering and the Metagovernance Project in their dedication not only to pushing rigorous research, but also to transferring those insights into tangible products and tools for their communities to use.

We hope this latest report not only proves to be a valuable guide for understanding the music/Web3 landscape today, but also plays a part in continuing to push the boundaries of what media and research DAOs at large can accomplish.

UPCOMING EVENTS

To dive deeper into the findings and takeaways from our Season 1.5 report, we invite you join us at these virtual and IRL events:

• Monday, March 7 (TODAY), 4:30PM EST on Twitter Spaces — Water & Music founder Cherie Hu and co-research coordinator Yung Spielburg will give an overview of what to expect for our Season 1.5 report rollout this week. They will also walk through a summary of takeaways from our interview project on music DAOs, which Cherie and Yung co-led. You can set a reminder for yourself here; the Space will be recorded.

• Friday, March 11, 3PM EST on Twitter Spaces — Cherie, Yung and a handful of our Season 1.5 project leads and W&M team members will jump onto Twitter Spaces to give a recap of the rollout week, and answer any listener questions about our research process and how we’re thinking about future seasons.

• Wednesday, March 16, 10AM CST @ SXSW — If you’ll be in Austin next week, Cherie will be giving a solo talk at the Austin Convention Center about her experience transforming W&M into a DAO, including fresh insights from Season 1.5.

We’ll also host a series of members-only deep-dive events in our Discord server the week after SXSW (beginning March 21). If you’d like to join these events — and/or if you’re interested in learning more about our DAO and community ethos and how you can get involved as a contributor — sign up for a Water & Music membership today.

Thank you so much for all of your ongoing support, and we can’t wait to share all of our insights with you this week! :)

About Water & Music

Water & Music is a newsletter and research DAO on a mission to empower the music industry with the knowledge, network and skills to do more collaborative, innovative and progressive work with technology. We’ve been early to report on several cutting-edge industry trends — from music avatars and niche streaming services to several different strands of music and Web3 including music NFT drops, Web3-native music communities and crypto-based royalty payments. We are proud alums of Cohort #3 of the Seed Club accelerator.

Our community is home to nearly 2,000 paying members across music and entertainment, spanning everyone from emerging artists and startup founders to marketers, investors and C-Suite executives at major music companies. What makes our work stand out is our relentless curiosity, our penchant for experimentation, our passion for interdisciplinary thinking and our recognition of constructive critique as a driving force of progress in music, tech and culture.

The report, which marked “Season 1” of our collaborative research model, spans topics from artist tooling and fan onboarding/sentiment, to music PFPs and legal challenges around defining music NFT ownership. Our supporters and onlookers have praised the report for:

• Combining granular, practical details and big-picture thinking on Web3;

• Considering both optimistic and critical perspectives on technology with equal weight;

• Successfully drawing some of the ecosystem’s most influential players into the Water & Music community, and

• Pioneering new models for funding industry research.

Oh, and we’re also now the top search result for “Web3 music."

The report was a definitive proof-of-concept for Water & Music’s next stage as a DAO. It coincided with the launch of $STREAM — our new token representing high-quality, tangible contributions to our larger collaborative research project, knowledge-sharing and community-building in music and tech.

Now that we’ve had a few weeks to rest and reflect, we wanted to lift the veil on our process of putting together $STREAM Season 1 and highlight what did — and didn’t — work about our highly emergent, agile approach. We hope these early insights are useful for fellow DAO explorers excited by the potential to use Web3 rails to create better systems for the collective production and monetization of media, data and knowledge.

OUR VOICE AND CULTURE

Regardless of whether you’re designing a community, running a research project or operating an entire DAO, processes and operations are not one-size-fits-all. Methods that work best for a particular group of people are highly dependent on the backgrounds, values, interests and skill sets that the group shares.

Hence, before diving into specifics about our process, it is essential to establish general guiding principles around our culture*.* These values stem from Water & Music’s origins as a music-industry newsletter prior to becoming a DAO, and now permeate everything we do as a community and editorial/research collective:

• Breaking perspectives, not news. We guarantee that each story we publish provides readers with an eye-opening angle on the future of the music business. In a world where, just like music, news can travel freely on the internet, news has become a commodity around which we cannot and will not compete. Our goal is not just to provide information but to turn that information into knowledge, insights and perspectives that you won’t find elsewhere.

• Centering the role of technological change without falling into technological determinism. A core part of our thesis is that technology is an essential part of any reporting or research about the modern music industry, not to mention about business, society and daily life in general. That said, we do not abide by technological determinism — i.e., the notion that tech, and tech alone, drives the evolution of our society — as it dismisses the core, fundamental role that humans play in shaping culture and business. Tech is a central part of our lives, but it does not build the future; we do.

• Examining key industry-specific issues with an interdisciplinary, systems-oriented approach. In a noisy, fast-moving information environment, context is key. We’re interested in studying not just individual artists, executives or companies, but also the broader, entrenched systems, institutions and incentive structures they collectively create. Thinking in terms of evergreen systems and frameworks allows us to connect the dots among seemingly disparate parties or events (especially from other industries like gaming, film and fashion), to paint a clearer picture of what’s happening in music and tech right now — and, importantly, where it’s headed.

• Emphasizing actionable solutions and frameworks. Insight is nothing without action. In aiming to advance the music industry, we not only highlight problems and symptoms, but also offer actionable treatments and cures. We hope our readers walk away from each article we publish with an actionable list of tasks they can do, or skills they can learn, to better themselves and their work.

• Fostering an environment optimized for curiosity and rabbit holes. Our $STREAM research aims to build a reputation and reward system on the foundation of proactive, high-quality and thoughtful contributions regardless of one’s industry background, supplanting the engrained notion of seniority or “expertise” so commonly exploited in the music and entertainment industries.

• Embracing open, transparent collaboration with our community. To maximize the value of our membership, we aim to foster as tight a feedback loop as possible between our editorial/research output and the needs of our community. Taking a regular, transparent pulse on our community’s needs and interests — from live brainstorming sessions during our town halls, to open research calls and regular barometer surveys — is an integral part of the membership experience. So much so that our collaborative process is as much a value proposition for members as whatever end products we publish.

S1 RESEARCH PROCESS + STRUCTURE

As a brief origin story: Our first collaborative article and database in the Water & Music community, published in October 2021, was a small pilot project analyzing the emerging business incentives and power dynamics at play in the spatial audio market, focusing on Apple Music and Amazon Music. We'll call this "Season 0"; it was a much smaller-scale initiative, with only nine credited contributors.

While we believe the article itself is one of the most in-depth, thorough investigations of the topic of spatial audio for a music-industry audience, the process of putting the pieces together also presented several illuminating challenges:

• Overly long feedback loops — There were often weeks when we didn't update members on the report's status. The early groups that formed moved to heads-down writing and interviewing, and consequently, other members had little opportunity to provide potentially valuable feedback regarding ideation and the research process.

• Inflexible call for contributors — We only held one real call for contributors during a live town hall meeting at the beginning of the research process. Beyond that, we did not provide enough asynchronous opportunities for would-be contributors, creating a significant lapse in context and adding a barrier to those unable to attend the first call in real-time.

• Last mile as the biggest bottleneck — The report's final writing and editing process took the longest, in part because it ended up falling on only three people. This bottleneck raised the broader question of how to atomize and granulate better different kinds of work in the research process to widen, rather than narrow, the scope of member involvement over time.

These learnings directly informed a more intentional process around S1 — particularly having quicker community feedback loops week-to-week, designating a more comprehensive range of contribution paths for members, and communicating async opportunities to contribute on a more regular basis.

The S1 research topics naturally followed the community's interests, given that the bulk of our discourse revolved around music's role in Web3 and vice versa. Further, the decentralized nature of Web3 at large and its information flow lent itself to a more open and collaborative research process. Ultimately, we found that the wisdom of crowds provided more nuanced perspective and creative advantages over smaller, more traditional editorial teams working behind the scenes.

Our collaborative research process is still highly freeform. We expect that the precise frameworks we adopt over time in terms of the overall structure, timeline and contributor roles will vary significantly from one season to the next, depending on the topic at hand and the working styles of those interested in contributing. That said, in hindsight, a loose structure did appear from the organized chaos of putting together S1:

Weeks 1–2: Topic ideation, synthesis and working group formation

We spent the first week collecting ideas for music/Web3 research questions from the community via a dedicated thread under the #collab-research channel in our Discord server. A total of 10 members contributed their questions during this ideation section (a number that we intend to increase for S2), with other members upvoting/reacting to specific ideas to signal their support.

Our core team then synthesized and organized these community ideas by theme into distinct working groups using FigJam, Figma’s collaborative whiteboarding tool. (In general, we are big believers in the power of spatial software to visualize the ideas and contributions of more collaborative, distributed communities like W&M.)

In the case of S1, five clear working groups emerged across 1) fan onboarding & experience, 2) fan sentiment, 3) music/Web3 tooling, 4) contracts/royalties and 5) generative art NFTs. We created dedicated threads under #collab-research for each working group, and interested member-contributors could opt into as many of these threads as they like depending on their skills and interests. From there, the members of each working group organized themselves into different roles (project leads, interviewers, data analysts, writers/editors, etc.) depending on the immediate tasks at hand for that group (gathering data, conducting qualitative interviews with artists and industry stakeholders, annotating legal and marketing documents, etc.).

What worked well with this setup was how it ensured we ideated from the start in collaboration with our community and invited more interdisciplinary forms of research and collaboration, providing contribution opportunities from a variety of backgrounds and skillsets.

Weeks 3–7: Agile research with regular “air traffic control”

Each of these emergent working groups then conducted research on their respective topics over the following five to six weeks. The vast majority of this work was conducted asynchronously via Discord, Google Docs and Google Sheets.

The most crucial element of this five- to six-week period was staying agile and flexible, with the ability to bring in new contributors and even change the entire research direction of a given thread if needed. In hindsight, our overall research structure is quite similar to that of gaming company Valve’s “cabals” — i.e., flexible, multidisciplinary project teams, whose structure and leadership emerge naturally to meet a project’s specific needs.

At large, the lean, iterative way in which our research process unfolded has lots of parallels with the core tenets of agile software development, including the emphasis on:

• Individuals and interactions over processes and tools

• Customer collaboration over contract negotiation

• Responding to change over following a plan

An underrated element of agile project management that also served us well is not being too attached to a predetermined process early on — and taking the deliberate initiative to scrap what doesn’t work. The nature of prototyping is that many prototypes produced in a rapid iteration process will be disposable.

A core example for S1: Early on, we suggested article annotations using the Hypothesis browser extension as a low-barrier way for our community members to contribute. Our core team had enjoyed leveraging the extension for our personal use and had a vision for a sprawling repository of music/crypto articles curated and annotated by and for the Water & Music community. But after a few weeks, it was clear that our community was not keen on contributing in this way — either because they seemed confused by how to use the extension or weren’t interested in doing this low-level annotation work. We ultimately decided to scrap article annotations as a form of contribution entirely, focusing instead on maximizing the quality of work that members were organically motivated to do (e.g., conducting artist interviews, annotating contracts and building out market maps).

In a collaborative, distributed research environment — where focused attention is a scarce resource — it’s imperative to take a regular pulse on what processes and tasks are (or aren’t) resonating with the contributor base. Community members can then fill the gaps in essential skills or insights on a more ad-hoc basis.

Another key element that informed the success of S1 was regular “air traffic control” for new contributors, with clear opportunities for members and lurkers to get involved in our research each week, depending on each working group’s unique needs and skill gaps. Our core team and project leads communicated these contribution opportunities to our wider community through:

• Live member-wide town halls in Discord, every Friday at noon EST. These town halls dedicated at least 30 minutes to collab research standups — covering what each working group accomplished for the week, tasks for the next week and remaining blockers in their process that other members could help fill in.

• Live thread-specific working group calls in a dedicated voice channel that was also open to the community, which focused more on delegating specific tasks to group members.

• Async text-based documentation and updates via email and our Discord server.

Maintaining this level of communication was influential throughout the process to accommodate eager newcomers and longtime lurkers who preferred to take it slowly and absorb all the information before jumping in toward the end with their specific skillsets (especially writing and editing). By providing clear entry points for new contributors on a week-to-week basis, we were able to keep our contribution network as wide as possible and expand, rather than shrink, the level of participation from our community over time.

Week 8: Multi-part rollout, NFT sale and members-only events

We rolled out our report daily between December 13 and 17, with one new thread of the report “unlocking” for the wider public every weekday during this period. On the first launch day, we also launched a genesis NFT sale to support our contributors and community treasury — which raised a total of 23ETH in just over 24 hours across 100 limited-edition NFTs and a 1-of-1 NFT sold at auction on our Mirror page. (You can view a detailed breakdown of how we distributed $STREAM and our ETH earnings to research contributors via this spreadsheet.)

We also held a series of deep-dive, members-only events in our Discord server throughout our rollout week, where core contributors shared the main takeaways from their research experience. They also prepared various reflective prompts to drive group discussion among attendees, like, "What song would you use as your audio PFP?" and "What does ownership mean to you, and does Web3 change that definition for you at all?" These discussions added an energetic, lighthearted layer on top of our otherwise rigorous, complex research process and gave members tools to assess takeaways from the report and reflect on the findings' impact, both personally and professionally.

AREAS FOR IMPROVEMENT

Contributor onboarding and coordination

Contributor coordination is mission-critical to any DAO whose culture revolves around rewarding active participation. And yet, the contribution discovery process in most DAOs’ Discord servers — including our own — leaves a lot to chance and member perseverance.

While we gave members opportunities to contribute to our research from week to week, as described above, we can take more steps to make it even easier for members to figure out where to “land” throughout the research process. Based on our S1 learnings, we’ll be implementing the following changes:

• Thread aggregator/index. Discord threads have been the locus for our research groups’ coordination and discussion — but due to Discord’s interface design, threads are not immediately noticeable or accessible upon joining our server. To that end, we’ll be creating a read-only thread aggregator channel that will hopefully reduce the amount of friction required for members to click into and follow our collab research discussions.

• Member skills database. Over 40 members contributed to Season 1, and this number will likely continue to grow for future seasons. We plan to put together a member-specific skills database over the next month, hopefully pairing members with tasks more efficiently. Specific skills like data analysis and visualization were scarcer in our S1 cohort. Having a database will help track down some reinforcements from our community in the future.

Clearer working protocols

One of the great triumphs of S1 was the real-time formation of large writer-editor teams in the last two weeks of our rollout. There were times you might look to the upper right of a Google doc in awe and wonder, “Just how many people are on this right now?”

That said, in the context of managing multiple different forms of collaboration (real-time, async and quasi-sync), clearer editing and revision deadlines and protocols would be helpful, especially to level-set new contributors around what kinds of suggestions would be most beneficial for writers, what deadlines each group is working on and more. An important challenge in setting up these protocols will be balancing the need for clear communication about standards and expectations in the contributor onboarding process with the magic of more emergent coordination and strategy that is a core benefit of DAOs.

Clearer document organization and access policies

Over eight weeks, our research contributors produced countless spreadsheets, audio recordings, interview transcripts/summaries, article outlines and drafts. Again, we coordinated most of this documentation using free cloud-based software like Google Docs and Google Sheets. We also made most files open for anyone to edit to minimize friction in the contributor onboarding process. It is only with great luck that there were no accidental deletes or external attacks on our documents throughout this process.

Hence we are in the process of answering tons of questions around document organization and access, including:

• Which documents go where — e.g., sharing public recap notes in our Notion member handbook, versus keeping more sensitive or contributor-specific documents in a closed Google Drive folder

• How to track changes across documents — we are accounting for this by creating all official collab research documentation in Google Docs and Google Sheets from the same, designated Water & Music Research account, with notifications on for all changes.

• How to back up documents in case of file loss

• Whether to token-gate document access as more contributors get access to $STREAM, using tools like Skiff or Clarity

In the case of handling more sensitive data, we’ve also implemented a policy that only active contributors to a given research project should get access to underlying first-party data sources (e.g., fan surveys and off-the-record artist interviews). Further, our first-party data remains internal until published in the underlying report. It would be unfair for inactive or lurking members to get access to that data earlier than everyone else in the community without directly contributing to gathering or analyzing said information; violating these policies warrants getting kicked from the community as a whole.

Marketing, promotion and content strategy

In S1, we focused our energy heavily on the quality of the research process and the end product itself, with little to no investment in distribution. Deadlines were extremely tight, and the report’s success lay primarily (we think) on the merits of the content itself and  Water & Music’s existing reputation, with the buzz around $STREAM building solely through word-of-mouth on social media.

Ultimately, as a research-oriented DAO, we still see marketing and promotion as secondary to nailing the process and the quality of the work itself. That said, it’s still important to invest more in external marketing efforts to maximize the impact and awareness of our research, especially outside of the music/Web3 bubble.

We’re exploring the following options for improving marketing and promotion for Season 2:

• Iterative content, not just iterative process. As discussed in an earlier section (see “Agile research with regular ‘air traffic control’”), we maintained a highly dynamic, iterative development process throughout our research. But our delivery and publication process was undoubtedly not iterative at all, in that we only published our findings in bulk at the very end of those eight weeks instead of delivering articles and insights in smaller chunks. Just as artists are encouraged to drip-release singles over an extended timeframe before releasing a full-length album to maximize fan attention and engagement, we are currently experimenting with publishing our research in smaller, more digestible formats and on a quicker cadence, such as a weekly interview series, to sustain public attention over a longer period of time.

• Planned external coverage of our report findings. We can do more intentional outreach to general business publications (e.g., Bloomberg, Forbes), entertainment trade publications (e.g., Billboard, Variety) and media trade publications (e.g., Nieman Lab, Digiday), leveraging community/DAO relationships wherever needed.

• Shareable templates and graphics built more intentionally into the report output. We had a handful of shareable infographics for our fan onboarding thread and music/Web3 market map, which were among the most widely-shared assets of the report on social media. To maximize reach, it would make sense to formalize the development of these infographics and visual frameworks as a requirement for each thread of future research seasons.

• More public-facing events around our research. There are a lot of opportunities for cross-community events and promotional partnerships via channels like Twitter Spaces, open Discord servers, live video webinars, podcast interviews and more, to build Water & Music’s brand and keep the information we publish in these reports as accessible as possible.

WHAT’S NEXT: Season 1.5 + Season 2

We're currently exploring several follow-up research threads around our music/Web3 report — including an interview series on artist/label DAOs, a modular music NFT contract template and an embedded investigative project on music/Web3 platform onboarding strategies — as part of a smaller “Season 1.5” initiative rolling out over the next several weeks. For the sake of smoother onboarding and maintaining continuity from S1, we are making a concerted effort for S1.5 to pair up experienced contributors from S1 with newer contributors from our community.

We plan to launch the ideation phase of Season 2 in early February 2022. Season 2 will focus on entirely new topics within music and tech, with an intentional framework for expanding our research network within the Water & Music community and onboarding a new group of contributors.

You can follow these ongoing research discussions and support Water & Music’s community and mission at large by signing up for our membership today. If you're not ready to pay for a membership yet but are still interested in staying up to date with our token strategy, upcoming research seasons and opportunities to get involved, please fill out this general interest form. (Identifying information on the form like ethnicity, gender and location are entirely optional but will be helpful for us as we look to recruit and curate a diverse range of contributors for future seasons.)

We’re so grateful to bring you along for this journey of building new models for community-stewarded research, knowledge-sharing and sense-making. 🌊

After covering music, tech and crypto from a critical, research-oriented perspective for the past two years, we dove headfirst into becoming Web3 and DAO operators ourselves in the second half of 2021. Within the span of just five months, we:

• Migrated our membership off of Patreon to our own (primarily Web2-facilitated) website and membership management stack, giving us more direct ownership over our community relationships and revenue flows;

• Went through Cohort 3 of the Seed Club accelerator, which gave us a crash course in Web3 and DAO fundamentals;

• Started and published our first-ever collaborative report as a DAO — a 20,000-word resource focused on all things music and Web3, featuring the work of over 40 member-contributors;

• Sold out of our first ever genesis NFTs in under 36 hours, which went directly towards supporting our research;

• Minted our token $STREAM, and

• Executed our first retroactive $STREAM airdrop to over 300 of our active members.

This post below is focused on fleshing out both the philosophical context and tactical details behind our inaugural $STREAMdrop (see what we did there?...). Not only is our airdrop approach complex in its multiple component parts, but it's also markedly different in its intention and target audience from those of many other DAOs, because fundamentally we are not a Web3-native community.

Rather, we have a nearly three-year history of running as a "Web2-native" business, supported entirely by recurring fiat membership fees from over 1,500 supporters. Over the course of these few years, we've cultivated a distinguished editorial voice and reputation in the music industry, as well as a robust community culture of members who have been intrinsically incentivized to support our mission and help their peers learn and grow, without any promise of extrinsic financial rewards (aside from perhaps the indirect upside of gaining the industry knowledge and connections to land their next big job, speaking gig or business partnership).

Hence, our $STREAM airdrop has two strategic objectives that sit at an interesting crossroads in how we are evolving as a community and brand:

• Looking back: Giving our historical community members and supporters a guided nudge into participating in Web3 in the context of our mission, plus a head-start towards active governance in our next stage as a DAO. We achieved this objective in the form of a retroactive airdrop of $STREAM to nearly 300 of our longtime historical supporters and contributors who had been buying into our mission long before our transition to Web3.

• Looking forward: Laying the foundation for a new incentive and reward structure around collaborative research in the music industry. We achieved this objective in the form of a retroactive airdrop of $STREAM to the 44 member-contributors to Season 1 of our collaborative research.

While we certainly don't have all the answers, we nonetheless hope the below discussion can provide a helpful starting blueprint for other Web2-native communities looking to make a similar foray into embracing Web3 infrastructure for collective financing and governance.

Recap: What is $STREAM and what does it represent?

The core concept behind $STREAM as laid out in our original Hello World post remains true: $STREAM is a “research token” that represents high-quality, tangible contributions to our larger project of collaborative research, knowledge-sharing and community-building in music and tech.

As a reminder, the $STREAM token has no inherent financial value. Rather, the token functions primarily as a key to on-chain governance for our most active contributors and supporters, especially with respect to how we use our community treasury resources to fund future research and editorial projects.

There is a fixed supply of 10 million $STREAM, broken down into the following four buckets:

• Retro community airdrop: 20% of total supply

• S1 collab research airdrop: 1%

• Stakeholders (founders, advisors, staff, etc.): 15% (founders and staff are subject to a 1-year vesting period with a 3-month cliff)

• Community treasury: 64%

Like any other token, you can view $STREAM's entire distribution and ownership history on-chain. Unlike many other tokens, however, no part of the incentive design or reward mechanics for $STREAM is currently automated; instead, core Water & Music team members (and, down the line, our core supporters and contributors) determine who earns $STREAM based on a more holistic evaluation on a given member's value-add to our community.

Distribution, Part I: Retro airdrop for historical supporters

Apart from us, almost no examples exist of Web2-native brands or companies that have retroactively airdropped tokens (fungible and/or non-fungible) to their historical community members. A few exceptions:

• In October 2020, independent electronic artist RAC gifted his own token $RAC to his historical supporters on Bandcamp, Twitch and Patreon, as well as on other on- and off-chain direct-to-fan channels such as his merch store and his $TAPE cassette sale on Zora.

• On November 26, 2021, Poolsuite — a beloved, summery music curation and lifestyle brand seven years in the making — airdropped exclusive Pool Member NFTs to a curated list of 250 historical supporters in their community. Just one day later, the brand launched their public Executive Member NFT sale, which generated $2 million in revenue for the brand in a matter of hours. (Disclaimer: I am a holder of both a Pool Member NFT and an Executive Member NFT from Poolsuite.)

In other words, literally no playbook or "best practice" for what we are trying to do exists. So, like many other emergent crypto communities, we have to write and iterate on our own playbook as we go, based on what we feel is most appropriate for our community.

We dedicated 20% of the $STREAM supply — or 2M $STREAM — to the retro community portion of our $STREAM airdrop. Our core pitch to prospective members is that the dynamism, intelligence and resourcefulness of our community, as displayed in our private Discord server, is as much a source of value as the original articles and research that we publish. To that end, we structured our retro community airdrop allocation into the following five buckets:

1. Guest writers and editors for previous W&M articles (400,000 $STREAM across a total of 35 whitelisted contributors).

2. Longtime supporters from when we were on Patreon (800,000 $STREAM, 983 whitelisted members).

3. Historically engaged Discord users (500,000 $STREAM, 91 whitelisted members).

4. Credited members in our weekly Discord digests (100,000 $STREAM, 58 whitelisted members).

5. Core W&M team members (200,000 $STREAM, 5 whitelisted staff members).

Getting a concrete list of members for buckets 1, 4 and 5 were relatively straightforward, simply pulling from our archive of articles and email digests. Buckets 2 and 3 took longer to nail down from an engineering perspective, but also proved to be the most interesting and fruitful design spaces for creating our own retroactive reward system.

Time-weighted engagement

For both longtime Patreon supporters and engaged Discord users, we wanted to combat recency bias by implementing a time-weighted value system. We broke down Water & Music's existing history as a community and brand into the following three eras, giving more weight to qualifying members in earlier cohorts:

• Year 1: The OGs (Feb 2019–Jan 2020). I started the Patreon page for Water & Music primarily as an experimental, altruistic side channel for enthusiastic readers to support my freelance work financially. It was in all senses an individualistic and creator-centric rather than collective-centric endeavor, with myself posting all the exclusive content, being the only Discord moderator and overseeing business operations.

• Year 2: Water & Music becomes a full-time business (Feb 2020–Jan 2021). Right around the start of the COVID-19 pandemic was when I was able to start focusing less on freelancing and more on building out Water & Music full-time as a proper standalone brand, with a larger slate of guest writers and data-driven resources (e.g. databases of music/tech companies and deals). Water & Music's membership grew more than fourfold during this year, from under 300 members to over 1,200 members.

• Year 3: Going down the web3/DAO rabbit hole (Feb 2021–present). If you're reading this, you probably know what this era is about. :) 2021 has been devoted not only to intensive coverage of music/Web3 from a research perspective (see our ongoing Music/Crypto Dashboard and our $STREAM Season 1 report on music/Web3 trends), but also to our own meta exploration of DAOs as infrastructure for fostering more collaborative research and knowledge-sharing in our community.

Blended Discord metrics

Beyond time-weighting, there was also the question of what specific metrics in our Discord server best represented a concrete value-add in the context of our community. We wanted to avoid purely one-dimensional measures of engagement, such as merely rewarding the chattiest people in our server without measuring the extent of their direct interactions with others.

Ultimately, we decided on a custom blended weighting system that took into account the following four metrics for each Discord member:

• Total message count (weight 0.3)

• Total message length, measured by character count (0.4)

• Total reacts given to others (0.1)

• Total reacts received from others (0.2)

DISTRIBUTION, Part II: Retro airdrop for collab report contributors

There were two main forms of rewards for research contributors to $STREAM S1:

1. 100,000 $STREAM allocation — or, 1% of the total $STREAM supply.

2. The collab report portion of our genesis NFT sales — or, 55% of 23ETH = 12.65ETH.

A total of 44 contributors — all current Water & Music members or staff — participated in putting together $STREAM S1, with a starting date of October 22, 2021. Anyone who contributed in a direct capacity throughout the eight-week process, from our first week seeding research questions from the community to our final week editing articles and rolling out the report, was eligible to receive $STREAM and ETH rewards. Contributors also took on a variety of different roles throughout this journey, from interviewers, writers and document annotators to data analysts/curators and overall project leads; nearly all of these roles emerged organically over time instead of being predetermined. You can view detailed lists of contributors and the roles they took on at the bottom of each article in our report.

Ultimately, we decided to approach token allocations via a top-down points system, which you can see laid out in detail in this spreadsheet. We assigned each contributor a specific number of points via the following three steps:

1. Thread-specific role weighting — for each thread of the report, rank each kind of contribution role from a scale of 1 to 5, with 5 representing the most effort/involvement in putting the thread together and 1 being the least. (You can view more specific breakdowns per thread in the "thread-specific weights" tab.)

2. Thread-specific point distribution — for each thread, add up the points for each person's contribution based on the role(s) they took on, as itemized at the bottom of each article of the report (columns G–K of the "master list" tab). The "ideation/identity" column (F) accounts for people who helped shape topic synthesis early on from week 1, plus people who helped us develop the report's overall visual identity.

3. Report-wide point distribution/weighting — sum up total points for each person across all threads, to get their total point value and percentage allocation for the entire report (columns E and D, respectively). This number informs each person's relative share of the 100,000 $STREAM allocation for Season 1 (column B) and the collab report portion of NFT sales (column C).

The hope is that this approach does a fair job of prioritizing the following groups of contributors:

• Meta-project leads (i.e. people who helped coordinate efforts across the entire report)

• Thread-specific project leads (i.e. people who helped coordinate efforts for a single thread of the report)

• People who were deeply involved in fewer threads from an earlier stage (i.e. people who committed to specializing in one topic from start to finish)

• People who were actively involved in more threads at a later stage (i.e. generalists who applied their skills in areas like writing, editing and visual design across multiple articles in the final two weeks)

All in all, each contributor to our report received an average of 2,273 $STREAM and 0.29 ETH (roughly US$1,100) for their work. Project leads also received separate one-time payments for the several hours they spent per week contributing and coordinating research, with the choice of receiving such payments in either fiat or a cryptocurrency of their choice.

While this compensation system has gotten positive feedback from our contributor community, it's also definitely imperfect, especially in how it provided little to no room for contributors to have a say in how their collective value was assessed. For instance, we assigned point values to specific tasks and job roles, but did not track other signals that others in the community might also find valuable (e.g. who consistently brought in and onboarded new contributors, or who led our weekly research standups and working-group calls). We're exploring using tools like Coordinape to facilitate more peer-to-peer token allocations around our future research seasons on top of base compensation, which will be an important step in practicing what we preach when it comes to building a DAO.

More contextual notes on strategy and execution

Where we diverge from "airdrop culture"

At large, airdrops are a crucial component of the marketing toolkit for many crypto projects today. More specifically, many early-stage Web3-native projects treat airdrops as a marketing tactic to growth-hack communities from the ground up. Recent examples include:

• The SOS airdrop for the newly formed OpenDAO (claimable by anyone who has ever bought or sold an NFT on OpenSea)

• The GAS airdrop for Gas DAO (claimable by anyone who has spent over $1,559 in gas fees on the Ethereum blockchain)

• The ENS airdrop for the ENS DAO (claimable by any owners of .eth domains)

A Twitter search for "drop your ENS" or "drop your ETH address" surfaces hundreds upon hundreds of other airdrop giveaways for as-yet unproven or unannounced tokens. Under this model, tweets act as a sort of public waitlist system, leveraging Twitter's network effects to maximize a project's attention — arguably the most scarce resource in crypto.

That said, the high frequency of airdrops has also created a culture in crypto where many prospective contributors join a community with the sole aim of maximizing their chances of getting airdropped tokens in the future — regardless of how invested they are in the community as a whole, or how slim the chances of these airdrops happening actually are. Such incentive structures run the risk of focusing a community participant's energy on earning tokens for their own sake, at the expense of ensuring they are serving the community's core mission and people. Hence many airdrops understandably feel borderline unnavigable and scammy for people who are uninformed about tokenomics, especially the implications of liquidity for tokens that have no clear utility or product roadmap.

https://twitter.com/jacksondame/status/1476068325084090375

https://twitter.com/0xQuit/status/1476097153353195520

https://twitter.com/DCLBlogger/status/1476184001660407808

This terrain has the potential to be especially treacherous for Web2 communities that want to honor a pre-existing set of social and cultural norms and expectations in their shift to Web3, instead of immediately drowning in the meta-game of tokenomics upon entering the scene. At Water & Music, we wanted to be much more thoughtful about our airdrop approach, and are intentionally diverging from the dominant "airdrop culture" by treating this launch first and foremost as a tool for strengthening our existing community and signaling the core values of our mission, instead of purely pursuing top-of-funnel marketing growth.

Why we're fronting gas fees (for now)

One crucial decision we had to make about this airdrop was whether to adopt a push or pull approach. In summary:

• A push approach is where a DAO or project sends (or "pushes") tokens in bulk directly to qualifying recipientspeople's crypto wallets, and front the gas fees in the process.

• A pull approach, or what is often referred to as a "claim" approach, is where a given DAO or project requests (or "pulls") qualifying community members to claim the tokens through a dedicated portal that connects to their individual wallets, in which case the community members incurcover gas fees themselves.

Many people we spoke with early on suggested going with a pull/claim approach, primarily because of the exorbitant gas fees that would be involved otherwise. Ultimately, though, we decided to go with the push approach for a few reasons:

• Water & Music is thankfully a revenue-positive business, so financial constraints are not as large of a roadblock as may be the case with newer, emergent communities.

• As the retro community portion of our $STREAM airdrop is meant to be a "thank-you" gesture to our members, it didn't make sense to us from a messaging perspective to reward members by forcing them to pay extra in gas fees to be thanked, especially if $STREAM does not yet have liquidity.

• As we are not a fully Web3-native community today, it would be arguably unrealistic to expect most of our members to understand how to navigate a token claim portal as their first experience engaging with our DAO.

Hence we executed both stages of our retro $STREAM airdrop via a push approach, using the CSV bulk transaction tool from our Gnosis safe. This approach ended up costing us around 0.9 ETH in gas. While we were comfortable fronting this cost as a business, it would clearly be more financially sustainable for us to move to a pull approach for future airdrops.

Onboarding for Web2 communities

Catering an airdrop solely to a whitelisted group of Web2 community members introduces a whole different set of onboarding and communication challenges from those of more public, open airdrops.

Some general rules of thumb for any communities transitioning to a new system:

• Your onboarding process can be as structured or as loose as you want it to be, but in no case can it be rushed or short-circuited. Accounting effectively for variances in individual members' fears, concerns and questions about a new technology or system simply takes time.

• Many of the most effective onboarding practices for Web2–>Web3 communities — daily Twitter Spaces, one-on-one Zoom calls, Discord AMAs — inherently and perhaps counterintuitively don't scale. As with any software or services company, the hard, manual work of recruiting, onboarding and delighting users one-by-one early on has compounding effects on future growth.

• In the words of Other Internet, "founders who desire a welcoming and wholesome community are personally responsible for embodying that culture" within said community. In the context of Web3 onboarding, this means that no one, not even core team members, is "above" providing core customer support tasks like setting up crypto wallets and going over general questions about crypto, tokenomics and security.

We're seeing the importance of patient, hands-on onboarding unfold in real time for our retro airdrop. For context, we have roughly 1,000 members who qualify for the Patreon-supporter bucket of our airdrop — but only around 30% of those people actually opted in to receive tokens, via an Airtable form that we've been sending out consistently via email to qualifying members over the last four weeks.

We don't have full context on why a given qualifying member ends up not filling out the form. Perhaps they're not interested in being a member of our DAO, or are generally reluctant to participate in crypto because they're still skeptical of the tech — or, maybe they just missed out on these emails entirely. Whatever the case, arguably the best course of action is simply to give qualifying people more time to discover this information, and give them the tools to make their own informed decisions about whether they want to participate in the airdrop. To this end, we're planning on doing a second wave of our retro community airdrop to any remaining whitelisted token holders in late January 2022, after which any unclaimed tokens will be kept in the W&M community treasury.

Moreover, out of the ~300 qualifying members who did opt in to the airdrop, roughly 1 out of 9 said they did not have a crypto wallet yet and needed help setting one up. To that end, our core team members held a series of live crypto wallet setup tutorials in our Discord server in December led by. We plan on holding more of these tutorials in the next few weeks as we onboard both historical and new members into our DAO.

Reconciling cross-platform supporter identities

In the process of generating our list of qualifying members for our airdrop, we ran into a frustrating but eye-opening problem of trying to reconcile member identities across both our Patreon and Memberful databases (which was a necessary step for us in determining active members’ lifetime contribution history). While simple on the surface, this bucket quickly became a complex data modeling problem, because there was no consistent member identifier across both platforms to easily merge the two lists. Several of our members changed their email or Discord handle amidst the transition, while others changed the name associated with their account and/or maintained multiple different accounts.

We think this has significant implications for any community with a cross-platform presence that wants to approach retroactive token distribution in a fair and comprehensive way. Ironically, reconciliation of supporter identities across platforms is not only an important component of equitably onboarding Web2 communities into crypto, but is also a massive, persistent marketing and data-modeling challenge far beyond Web3 alone.

What comes next?

Now that our first airdrop is fully executed and $STREAM S1 is out in the world as our "proof of process," we're one step closer now to our mission of building an environment that tangibly rewards collaboration and peer-to-peer knowledge-building in music.

Now, the hard and important work comes in around honing this process to accommodate an expanding slate of contributors and research interests across the music and tech industries. We'll publish a more detailed post in the next week about how our emergent research process unfolded for S1, and how we'll improve on contributor onboarding, wayfinding and coordination for upcoming seasons.

In the meantime, there are already a handful of different follow-up research ideas and working groups swirling around our Discord server, from constructing modular music NFT contract templates to running a deeper interview project on music/label DAOs. You can sign up for our membership to support this ongoing research, follow the discussions in our server and learn more about how you can contribute.

Continued investment in onboarding will also be a core focus for our team in the next few weeks — communicating as clearly as we can with our membership on who has $STREAM in their wallets and why, and how they will be able to use $STREAM down the line to help shape the future of our DAO as a whole. Given our history and our established editorial voice, we're not rushing the process to on-chain governance and are thinking critically about what decisions will be open to community stewardship, what models we will use to make those decisions and whose voices in the community should have the most weight. Keep an eye out for more governance updates on our Mirror page in the coming weeks as well.

We look forward to experimenting and learning more in public, and are grateful to bring you all along for the ride. 🌊

About Water & Music

Water & Music is a newsletter and research DAO building the innovator’s guide to the music business. We’re on a mission to empower the music industry with the knowledge, network and skills to do more collaborative, innovative and progressive work with technology. We’ve been early to report on several cutting-edge industry trends — from music avatars and niche streaming services to several different strands of music and Web3 including music NFT drops, Web3-native music communities and crypto-based royalty payments.

Our community is home to over 1,700 paying members across music and entertainment, spanning everyone from emerging artists and startup founders to marketers, investors and C-Suite executives at major music companies. What makes our work stand out is our relentless curiosity, our penchant for experimentation, our passion for interdisciplinary thinking and our recognition of constructive critique as a driving force of progress in music, tech and culture.

In December 2021, we launched our inaugural collaborative report as a DAO on the state of music and Web3, which you can read below:

https://stream.waterandmusic.com/

To be sure, there's been a lot of noise coming from the top down, as countless celebrities have treated one-off NFT drops as get-rich-quick schemes without a long-term vision, often duping their own fan bases in the process. At the same time, from the bottom up, independent artists and creative collectives are leveraging Web3 to rewrite the playbook for digital music monetization, community engagement and IP co-creation right in front of our eyes, crafting new social and financial incentives around culture on their own terms.

In Water & Music’s first-ever collaborative research report, nearly 40 of our community members across industries, geographies, career stages and skill sets came together to try to make sense of the immense challenges and opportunities that lie ahead for music/Web3's future.

Over the past two months, we’ve:

• Interviewed more than a dozen artists, music-industry veterans and startup entrepreneurs;

• Annotated 60+ pages of music NFT contracts and press releases;

• Run a fan onboarding survey with 150+ responses;

• Conducted our own original data analysis and market research on music/Web3 startups and NFT drops;

• … and much more.

The result is a first-of-its-kind, five-part syllabus on the state of music/Web3 in 2021, with a collection of market maps, databases, best practices and calls to action for music-industry stakeholders to use Web3 as a tool for fostering a more innovative, sustainable and equitable environment for everyone involved.

https://stream.waterandmusic.com/

SEASON 1 DROP SCHEDULE & STRUCTURE

You can follow along with our drop schedule, plus browse a full list of our member-contributors for Season 1, by visiting stream.waterandmusic.com — and/or read on for more details below.

Our collaborative report will be dropping in five parts — one for each weekday this week — in the following order and on the following topics:

• December 13 (today!): Will music NFTs ever get their PFP moment? (A deep-dive into the burgeoning market for generative music NFT projects)

• December 14: Defining music NFT “ownership,” from the digital to the analog world

• December 15: The state of music/Web3 tools for artists

• December 16: Improving the fan onboarding experience into Web3

• December 17: Analyzing fan sentiment around music NFT drops on Twitter

We will also be holding members-only deep-dive sessions throughout this week in our Discord server, to give our community an opportunity to give us feedback and ask us follow-up questions about our research:

• December 13 (today!), 3PM ET: Report overview by the numbers + deep-dive into generative music NFTs

• December 15, 3PM ET: Deep-dive into music/Web3 tools + legal issues around music NFTs

• December 17, 3PM ET: Deep-dive into fan sentiment and fan onboarding case studies for music/Web3 communities

All Season 1 contributors will receive a $STREAM airdrop on Sunday, December 19 alongside a retroactive $STREAM airdrop to longtime members of our community, including our most engaged Discord server members, supporters from our Patreon days and previous guest writers.

GENESIS $STREAM NFT DROP

One of the most exciting aspects of covering emerging trends in music and entertainment is the opportunity to experiment tangibly with the technologies we are covering. To that end, it only makes sense for a sprawling report about the state of music/Web3 that we also offer options for readers to support our work on-chain.

We’re excited to launch a genesis NFT collection to commemorate Season 1 of $STREAM, consisting of two parts:

• 100 limited-edition NFTs priced at 0.2 ETH each; and

• An animated 1/1 NFT sold via auction with a 1 ETH reserve price.

edition://0xDF5b5ee15CC96ba7d0CB6BD9b2c0fc4417ab6445?editionId=2113

auction://0xabEFBc9fD2F806065b4f3C237d4b59D9A97Bcac7?auctionId=0x7e6231495c77959607bec33eec179c66af898a233415916b5d1cfb860ff9f56f&tokenId=6660

The artwork for these tokens is designed by Water & Music member Ana Carolina — a visual designer from Brazil with experience in entertainment marketing, who is now looking to explore how Web3 and decentralization can enrich music discovery and artist/fan experiences.

Ana also led design for the visual identity of our collaborative report as a whole. After going down several rabbit holes on Behance and Dribbble, we arrived at a more muted blue/pink color palette and leaned more into softer, grainier and more papery textures (mood boards here, here and here), in the hopes of crafting a warmer, more approachable aesthetic that stood out from the plethora of shiny/metallic/neon logos elsewhere in the Web3 universe. Each of the five circular icons you see in the limited-edition and 1/1 NFTs corresponds to the cover design for a specific thread of our report.

Collectively, these tokens represent the first official opportunity to support our work and community on-chain. Revenue from sales of these NFTs will be split in the following way:

• 15% to Ana Carolina (NFT artwork designer)

• 55% to Season 1 collaborative report contributors

• 30% to Water & Music’s community treasury, which will fund future $STREAM research seasons and community/editorial projects

The NFTs will come with the following perks:

• All token holders (limited edition + 1/1): Lifetime membership to Water & Music — unlocking access to our archive of 150+ music/tech databases and articles as well as our private member community on Discord.

  • For now, these lifetime memberships will be fulfilled to each token holder off-chain. If you haven’t already, please email members@waterandmusic.com to redeem your membership perks.

• 1/1 token holder: All the above lifetime membership benefits, plus guaranteed lifetime access to Water & Music’s future IRL conferences and events and a free Water & Music sweatshirt and tote bag.

EDIT May 31, 2022: The perks associated with each membership NFT can only be redeemed once. Once the holder of a given NFT has redeemed perks associated with that NFT, subsequent holders (e.g. who obtained that token on the secondary market) no longer have access to that perk. Potential secondary market buyers are encouraged to reach out to the seller and/or directly to us at members@waterandmusic.com to confirm whether these perks have been redeemed for a given NFT, as the redemption status will not be reflected on-chain.

We’re thrilled to showcase these early fruits of our DAO and collaborative research model to the world, and would love to bring you on board with us as we continue on our Web3 journey.

If you're interested in staying up to date with our token strategy, upcoming collaborative research seasons and opportunities to get involved in our community, please fill out this general interest form. (Identifying information on the form like ethnicity, gender and location are 100% optional, but will be helpful for us as we look to recruit and curate a diverse range of contributors for future research seasons.)

About Water & Music

Water & Music is a newsletter and research DAO on a mission to empower the music industry with the knowledge, network and skills to do more collaborative, innovative and progressive work with technology. We’ve been early to report on several cutting-edge industry trends — from music avatars and niche streaming services to several different strands of music and Web3 including music NFT drops, Web3-native music communities and crypto-based royalty payments.

Our community is home to over 1,500 paying members across music and entertainment, spanning everyone from emerging artists and startup founders to marketers, investors and C-Suite executives at major music companies. What makes our work stand out is our relentless curiosity, our penchant for experimentation, our passion for interdisciplinary thinking and our recognition of constructive critique as a driving force of progress in music, tech and culture.

2021 is a major transitional year for us as we shift from solely covering Web3 from a critical/research lens, to embracing Web3 rails ourselves as builders and operators. We are proud alums of the Seed Club accelerator (Cohort #3) and are excited to be rolling out $STREAM, our research token framework for incentivizing, crediting and rewarding collaborative knowledge-sharing in music, tech and entertainment, this month.

“Countless treasures are buried along the path to nowhere in particular.”*

• Kenneth O. Stanley & Joel Lehman, Why Greatness Cannot Be Planned: The Myth of the Objective, 2015*

Last month, I posted the following on Twitter:

This thought stemmed from two distinct, yet related experiences in my life. The first is my own personal journey as a gamer during the COVID-19 pandemic. Like millions of others, I found myself diving headfirst into gaming in March 2020 as my go-to form of quarantine escapism; in particular, I gravitated towards virtual worlds that offered immersion as their own reward, with little to no extrinsic pressure to “win.” Many of the games that ended up resonating the most with me emotionally were ones in which I could customize my strategy for advancing in and winning the game based on my own personal playing style (The Legend of Zelda: Breath of the Wild, Horizon Zero Dawn, Spiritfarer) — or where there was no win condition at all, and the “gameplay” was more about exploring and exploiting the game’s overall meta-system, letting my own personal narratives and goals emerge naturally from the choices I made within that system (Stardew Valley, Animal Crossing: New Horizons, Everything). This open-ended, agency-first approach to game design is different from how I’ve seen the term “gamification” used in tech and business discourse over the years, where the abstracted gamer experience is interpreted to be so menial, linear and hierarchical to the point of incentivizing not only manipulation, but also distraction from the game’s core mission.

The second experience that seeded the above tweet is my real-time journey transitioning Water & Music from a paid, Web2 music/tech newsletter into a more decentralized media and research DAO, with a token ($STREAM) designed to incentivize collaborative, peer-to-peer knowledge-sharing and research in the music industry.

Immediately upon entering the Web3 rabbit hole, one realizes that it’s hard to talk about crypto without also talking about gaming — specifically a highly financialized form of “gamification” revolving around microtransactions and “play-to-earn” (P2E) incentive design, whereby players win real tokens with real financial value for specific behaviors or achievements. Crypto-native P2E games like Axie Infinity have generated several hundred millions of dollars in revenue so far this year and, for better or for worse, have turned into de facto digital labor markets whose currencies are starting to be accepted by vendors around the world. It’s no surprise that seemingly every corporate gaming behemoth, including Epic Games, EA and Ubisoft, has publicly expressed their interest in blockchain in response to this fervor.

The reality of these P2E games is that, to borrow the words of Mechanism Capital’s Eva Wu, “financial incentives are currently bootstrapping player interest” much more than interest in the core narrative or mission of the game itself. This isn’t good or bad — it’s amazing, in fact, for people who can make a living from it — but it’s ultimately an incomplete picture of what a “game” can really be, and what Web3 can learn from gaming from an incentive design perspective.

I recently went through Cohort 3 of the Seed Club accelerator, which helps communities like Water & Music launch their own tokens and navigate Web3. Some of the most crucial takeaways from the accelerator were as ideological as they were technical or financial, particularly the importance of iterating alongside your community, embracing emergent organizational frameworks within DAOs and adopting clear communication and onboarding tactics that align well with these emergent strategies. Ironically, crypto/gaming discussions seldom touch upon these ideas of emergence — even though, as discussed above, some of the most critically acclaimed (and my personal favorite) games of recent years are fundamentally emergent and iterative rather than linear and regimented in nature.

Connecting these disparate inspirations, I wanted to dedicate the first Water & Music DAO update to exploring the role of emergence in DAO onboarding design — specifically rethinking the term “gamification” to support more open-world, self-directed narrative- and skill-building paths for DAO community members.

I am not the first to make this connection: As Gnosis’ Kei Kreutler writes in her phenomenal piece “A Prehistory of DAOs,” today’s DAOs share a common ethos with many early gamer guilds dating back to the 1990s, in which groups of players would band together in emergent organizations to collectively achieve specific sets of goals in more open-world MMORPGS that could not be accomplished by a singular individual alone. Rewards systems like dragon kill points (DKP) serve as “reputational tokens based on the participation of members,” writes Kreutler — bearing a stark resemblance to the roles that certain tokens like $JUMP, $BANK, $FF, $GCR and, ultimately, Water & Music’s $STREAM play as on-chain crediting systems for contributions to a larger media or community project, with or without liquidity. Hence, in publishing this piece, Water & Music is simply building upon the long lineage of drawing inspiration from emergent game communities as the blueprint for community design as a whole.

Revisiting my own understanding of “gamification”

Aside from being a gamer myself, I’ve also been covering and teaching about the intersection of music and gaming professionally for several years, as part of my overall interest in researching marketing and business frameworks across industry lines. So, in the context of my DAO journey, a big part of rethinking “gamification” involves revisiting and updating my historical beliefs about gamification’s role in culture.

Let’s step back and define what we’re talking about here: A commonly used definition of “gamification” is the application of game mechanics to non-game scenarios. Existing literature suggests that the main motivations for organizations to adopt gamification tactics in their products and operations are usually twofold: 1) To make stereotypically boring or menial activities, like certain kinds of schooling or employment, more fun or efficient through extrinsic rewards (e.g. Amazon’s controversial FC Games program), and 2) to take part in the financial growth of success of the gaming industry as a whole, through features like micropayments and free-to-play pricing models.

In December 2019, I published an article in Water & Music titled “The gamification of the global music business.” Using a two-part definition of what constitutes a “game” — a set of concrete features on the one hand (e.g. objective-based scoring/points/reward system, ranking/leaderboard system, role-playing and immersion in alternative realities, narratives that advance only through player agency), and a set of abstract emotional outcomes on the other hand (e.g. sense of achievement and forward progress, buildup of determination in the face of a challenge, social status/approval that comes with rewards-based credentials, overall dopamine release) — I argued that nearly every aspect of the music industry was being “gamified” in real time, from commercial chart performance (hence the phrase “gaming the charts”) to fan loyalty (e.g. digital download leaderboards and fantasy record labels) and even the creative process itself (e.g. generative album apps).

The music industry’s motivations to embrace gamification are arguably more financial than cultural: Newzoo estimates that the gaming industry generated over $175 billion in revenue in 2020, whereas official figures for the music recording and publishing sectors sum up to only around $27 billion in the same time period.

But in revisiting many of the gamified music-industry examples I covered back in that 2019 article, one point I failed to make is that many of those examples copied-and-pasted a rather narrow, quantifiable feature set from games onto a non-game environment, instead of starting from the desired emotional outcome of the “game” and designing a specific, bespoke feature set around that goal. In other words, many gamification efforts miss a critical human-centered design perspective — in the sense of pinpointing the problem that “gamification” is really solving not just for the game manufacturer or designer, but also for the player (or in this case the fan), and letting that deeper insight lead product development rather than any surface-level UX trends or financial metrics.

The thinking in the music industry sometimes goes along the lines of: “The gaming industry is making more money than the music industry. But we [the music industry] should be making just as much money as them, because culturally we're just as if not more valuable and influential. So, let’s adopt their UX and monetization strategies and ‘gamify’ everything — put everything on a leaderboard, and give everything a score.” In many cases, this line of thought turns what would otherwise be dynamic systems around music and culture into routines that are arbitrarily regimented and easily manipulable.

Perhaps one of the most extreme examples of this ideological mismatch can be found in the myriad attempts to “gamify” fandom. Cultural fandom is a highly personal, multifaceted journey that is difficult to quantify as a singular, blanket “objective” for a wider audience. No two Drake fans will have the exact same journey to discovering his music, nor the exact same reason to stay loyal to him over time; those reasons will be highly specific to each individual, no matter how many top-down marketing campaigns Spotify or Republic Records shoves down their throats. Yet, most gamified fan engagement apps usually end up tethering fan behaviors to a granular, homogenous points and leveling system — such that, say you can only become a “true fan” of an artist on a certain app if you like 10 of their tweets or stream their song 100 times on Spotify. It’s a top-down approach to an inherently bottom-up, emergent behavior, that risks stripping discovery and fandom of its context for the sake of profit.

Through the lens of Water & Music, the narrow interpretation or outright misuse of “gamification” can also have significant implications for building decentralized approaches to research, education and information synthesis. As a DAO, our overarching goal at W&M is not just to serve as a reliable source of music/tech trend analysis for an industry-facing audience, but also to build a system for curious, ambitious community members to execute on their own emergent research and educational agendas. This doesn’t necessarily map well onto a more linear, hierarchical, atomized pathway for earning tokens that we see in other arenas like P2E games.

In particular, studies in machine learning and business innovation have suggested that, somewhat paradoxically, the world’s “greatest” inventions and scientific advancements have no intention of happening. Instead, they emerge through the slow, steady accumulation of incremental discoveries and innovations over time across several different, unconnected industries, only to be integrated and combined with each other in ways wholly unforeseen by their original creators. Machine-learning researchers Kenneth O. Stanley and Joel Lehman characterize this kind of emergent dynamic a “non-objective search process” — i.e. one not bogged down by preconceived objectives or measurable results.

To connect this discussion back to the importance of desired outcomes driving feature sets, not the other way around — how can we expand our understanding of “gamification” in tokenomics and DAO design to include not merely pushing overly quantifiable, financialized objectives, but rather incentivizing more emergent, non-objective processes of search and creativity, especially in culture- and knowledge-based communities? At this point, we at Water & Music definitely have more questions than answers, but we think this concept of gamification-for-emergence will be one of the most interesting design spaces for DAO communities in the coming months.

Water & Music DAO design: Systemic games and skill trees

When it comes to the design for our $STREAM research token mechanics, we’re drawing significant inspiration from ideas around emergent gameplay — whereby players are able to make inherently personal sets of decisions about how they want to navigate a given information environment, from which narrative journeys unfold in ways that can be guided but ultimately not predicted by us, the designers of the DAO.

There are two concepts in particular that are relevant to W&M’s token and community design:

A. Systemic games

Systemic games are defined by the autonomous interlinking of multiple different systems (narrative system, combat system, nature/weather system, character/NPC system, etc.) such that one system can directly influence the other, often independent of players themselves getting involved. The emergence in systemic games comes from players discovering, tinkering with and ultimately exploiting the unexpected mechanics that arise from these interlinked systems. Perhaps the most renowned example of a systemic game is The Legend of Zelda: Breath of the Wild, whose physics engine, dynamic weather system and combat system all interact with each other autonomously to create seemingly infinite combinations of hacks for navigating the game environment and advancing the narrative — to the point where more than four years after the game’s release, GameSpot is still uploading videos with titles like “X MORE Things You STILL Didn't Know In Zelda Breath Of The Wild” that are legitimately interesting.

The concept of systemic games has a direct line to organizational design for DAOs. In fact, today’s Web3 builders and thought leaders are increasingly thinking of DAOs not as singular organizations, but precisely as networks of interlinked systems — what some call “circles,” “pods” or “subDAOs” — that influence each other in a way that transcends the influence of any one community member.

The Water & Music DAO in particular sits at the convergence of three interlinked systems — each with its own distinct mission that is necessary to realize the overall meta-mission of fostering more collaborative, peer-to-peer learning and education in the music industry:

• Music DAOs <> rearchitecting the foundations of creation, financing and discovery for one of the core pillars of our culture.

• Research DAOs <> creating better systems for navigating, contextualizing and synthesizing the modern information landscape.

• Media DAOs <> crafting and disseminating more expansive, dynamic and diverse information narratives.

The above diagram is not meant to be exhaustive in terms of the logos featured, but rather is meant to serve as a starting mental model for understanding the different components that contribute to W&M’s higher mission, which also map directly onto different sets of ways that members can get involved in our DAO based on their skills and interests.

Importantly, just like in a systemic game, these three systems of music, media and research are not discrete or even merely overlapping, but rather are tightly connected through feedback loops where progress in one circle directly informs progress or improvement in the others. For instance, community operations have always had a direct influence on Water & Music’s editorial and research operations, when it comes to making sure that the topics we’re covering in our newsletter are as close as possible to the issues that people in our community actually care about, as expressed through channels like our Discord server. And our work on the research and development front can have a tangible, direct impact on the music and media aspects of what we do — from building better tools for synthesizing the fast-paced landscape of information and data in music, tech and entertainment (à la Bloomberg Terminal), to designing internal DAO tooling similar to the dashboards that Friends With Benefits Pulse and Forefront Terminal have put together so that our community can have a clearer view of its own growth and evolution.

B. Skill trees

Skill trees in games can be defined as systems that allow players to customize their characters’ abilities over time, by branching out from a base level of foundational skills into one of many possible skill paths that each gets progressively more specialized and/or advanced.

Yes, skill trees do assume some level of linear, top-down progression as opposed to completely open-world exploration. But from a game-design perspective, one of the main benefits of skill trees is that they distribute complexity more incrementally over the course of a game, instead of dumping all possible abilities or powers onto a player’s character upfront — which would feel completely overwhelming, maybe even to the point of demotivating the player from engaging entirely.

Importantly, a lot of the best skill trees in games are also expansive enough that it would be literally impossible — and probably not even that enjoyable — for players to be able to collect all potential skills by the end of the game. Instead, by design, these skill trees force players to specialize and make deliberate choices early on in the game about how to optimize for obtaining the skills that are the most useful and/or interesting to themselves, while also taking the game’s overarching objectives and systems into account. The natural outcome of these kinds of skill trees is that the game inherently rewards several different ways of playing, with players being more able to customize their experience on a more detailed level and drive their own emergent in-game narratives, instead of those narratives being more regimented or assigned top-down.

In the context of DAOs, skill trees are most relevant in the context of onboarding “players” or community members thoughtfully through complex organizational systems. For Water & Music, our member onboarding journey as a DAO will necessarily be much more complex than when we were previously a Web2 newsletter. In the latter scenario, people simply signed up for our paid newsletter, joined our Discord server if they wanted to and then started receiving article and community digests in their inbox — onboarding complete. In contrast, today we need to think about onboarding members with the intention of showing them how to become active, continual contributors and token earners in our community over a longer period of time, across the different realms of our DAO.

(Of course, it would be naive to assume that every member of a DAO would want to become a super active contributor — the equivalent of achieving near 100% completion of a game’s skill tree. Community models elsewhere on the Internet inherently assume that only around 10% to 20% of people in a given community will end up being regular, top contributors, with the rest acting as lurkers or supporters. This is not inherently a bad thing; the design challenge for any communities, including but not limited to DAOs, is how to foster a sense of welcoming and belonging at all levels of engagement, and enable more mobility and flexibility over time for those who desire it.)

From my own exploration of Web3 land, I’ve enjoyed seeing other budding DAOs like pubDAO and Dreams Never Die adopt early semblances of a skill tree-like interface in their respective Discord servers, whereby members have to react with the roles they are interested in taking on in order to unlock specific channels with next onboarding steps. This level of gating and friction not only makes the entire possibility space of DAO contributions clear from the start, but also encourages members to lean into a contributor-first mindset from the very first stage of community engagement.

Another increasingly popular way that DAOs are approaching onboarding is through bounty systems that reward members with tokens for completing specific tasks. We’re in the process of thinking through what a bounty system might look like across W&M’s community, editorial and research verticals, with lower-lift entry points to start earning $STREAM tokens. For instance, members interested in getting involved with our R&D operations can start by curating individual startups and deals for our vast range of music/tech databases. Or, members who want to get more involved in higher-level community design can get started by welcoming and onboarding new members directly (e.g. pointing them in the right direction in our server by replying to their #intros message), or by helping to take notes for our town halls and other live events.

Of course, like with building good skill trees, building interesting and effective bounty programs is really difficult. In fact, the questions that game designers ask themselves about skill trees are quite similar to those that DAO operators might ask themselves about bounties: How do we make sure community members feel like they are actively and intentionally working towards some higher-level goal, instead of getting lost in the “tyranny of the task” — i.e. grinding away at menial, uninteresting tasks that seem irrelevant to the higher game experience or mission? How do we design the lowest-level achievements to be accessible, but still inherently interesting enough to attract the most interesting people?

Again, at this point we have more questions than answers, as we approach building out an emergent research/media ecosystem as thoughtfully as possible. But I’m excited by the opportunity to draw inspiration from game design in more expansive ways, in a way that helps build larger systems not just for advancement, but for agency, collaboration and discovery — and encourage others building in the wild world of Web3 and DAOs to join us.

Addendum: Emergence still needs rules

As a lingering thought — something you may notice about the concepts of systemic games and skill trees is that while games with these characteristics encourage player emergence, their possibility space as a whole is not emergent, but rather is still fully controlled, constrained and predetermined by the game developers.

In the context of systemic games, it’s not like the players themselves are designing the systems as a whole; the overall game designers, or game “masters,” establish a coherent, predetermined set of rules top-down for how the various systems within a game will talk to each other, in a way that is legible enough to players such that over time they can start to build their own narratives on top of these systems. In the context of skill trees, your path through the tree can be personalized, but the possibility space is always set in stone beforehand, and likely you still need hand-holding from the game early on to understand all the different potential paths you could take as a “player.”

To translate this line of thinking to DAOs and emergent organizational design: Even if members’ paths to engagement within a DAO may be more emergent or unpredictable in nature, DAO designers and operators still have important top-down roles to play as arbiters of the possibility spaces within their respective communities.

As one of my favorite examples of this way of operating: CabinDAO has published this really detailed and thoughtful guide to how they approach emergent-friendly onboarding (or “wayfinding”), including a detailed onboarding inventory document that can be thought of as a design template for the “possibility space” of engagement around their specific community and mission. In general, top-down DAO documentation like this does not kill emergence, but rather is crucial for ensuring that emergent contributions and member pathways remain in service of the DAO’s overall ethos and mission, especially as the community scales. CabinDAO contributor Roxine Kee has even suggested that documentation guilds will become a more common organizational subunit within DAOs in the near future, for the purpose of  “scal[ing] narrative while retaining culture.”

Hi there!

We’re Water & Music, a newsletter and research DAO on a mission to empower the music industry with the knowledge, network and skills to do more collaborative, innovative and progressive work with technology.

In December 2021, we will be launching $STREAM, a research token designed to incentivize, credit and reward collaborative knowledge-sharing in music, tech and entertainment. We’re excited to share more info below about the context, utility and roadmap around our token, and how you can get involved today.

If you’re already interested (or don’t feel like reading on), please fill out this general interest form and you’ll be among the first to know about our token strategy and future opportunities to contribute to our community at large.

Our (brief) history

Founded by longtime journalist and researcher Cherie Hu, Water & Music started its life in 2016 as a newsletter sandbox for sharing critical, forward-thinking perspectives on music and tech. In 2019, we launched our paid membership on Patreon, and have since grown to nearly 1,500 paying members — spanning everyone from emerging artists and startup founders to marketers, investors and C-Suite executives at major music companies.

Our contributor network to date consists of dozens of different writers around the world, and we’ve been early to report on several cutting-edge industry trends — from music avatars and niche streaming services, to several different strands of music and Web3 including music NFT drops, Web3-native music communities and crypto-based royalty payments. What makes our work stand out is our relentless curiosity, our penchant for experimentation, our passion for interdisciplinary thinking and our recognition of constructive critique as a driving force of progress in music, tech and culture.

https://www.waterandmusic.com/data/2021-music-crypto-dashboard-track-70m-in-music-nft-sales-music-daos-and-more/

“Cool,” you might be thinking, “this is just another niche media company.”

But from the beginning, we’ve believed that the value of Water & Music’s membership extends far beyond just a catalog of articles or company databases; it’s also about the collective curiosity, enthusiasm and wisdom of our community. Over the past two years, we’ve intentionally designed our member experience not only around presenting our own original, high-quality research, but also around empowering our readers with the tools to lead their own conversations about the topics we cover.

We open-source our research process to members in the form of regularly updated, highly curated databases of startups and deals that members can leverage to shape their own strategies and careers. Our private Discord server has become the daily watering hole for today’s most curious and innovative minds in music, who gather to help each other unpack the latest industry trends, give feedback on new projects and share job opportunities. We curate the most interesting insights from these conversations into weekly, members-only Discord digests, setting the early stages for a more community-driven, crowdsourced editorial and knowledge-sharing framework for the music business.

Why Web3 — and why now?

The question at the core of Water & Music’s next stage of evolution is: How do we build a media and research ecosystem that allows our community to capture more of the value they are creating, both for Water & Music and for each other? Naturally, this brings us to the wild world of Web3, which has empowered communities like ours around the world to claim a stake in the digital networks they help build.

Over the past six weeks, we had the honor of taking part in Cohort 3 of Seed Club, an accelerator program focused on helping communities build their own social tokens. The accelerator was the best Web3 information firehose we could ask for across topics including community design, DAO governance and tokenomics, and helped instill in us the mindsets of emergent strategy and a bias towards action that are crucial for thriving in this landscape. We have come out of the experience convinced that tokens make sense for where Water & Music is headed, as the implementation layer for formalizing the more collective, collaborative behaviors already happening in our community.

Zooming out, music-industry media has also seen major market consolidation that warrants a serious look at more decentralized, Web3-native alternatives.

In September 2020, in probably one of the most under-reported mega-merger events of that year, almost all major entertainment trade publications in existence — including Billboard, The Hollywood Reporter, Rolling Stone and Variety, along with major data providers Alpha Data and MRC Data (formerly Nielsen Music) — consolidated under the same holding company, known today as PMRC. It’s ironic how the music trade landscape is facing the exact same consolidation as the industry it’s reporting on, which arguably makes it difficult for said publications to look at themselves in a more critical way.

https://www.billboard.com/articles/news/9454041/mrc-penske-media-venture/

Just like Web3, the music industry is constantly shifting, experimenting and breaking its own rules, and it deserves a media ecosystem that can do this dynamism justice. We believe Web3 can serve as the rails for a wholly different set of incentive structures for music-industry media and education — one that incentivizes quality over quantity; that rewards curiosity and skill-building over “expertise” or seniority; that better reflects the diversity and ingenuity of its readers; that puts artists and creators at the center; and that encourages more transparent, fluid knowledge-sharing in a historically opaque, exploitative and low-paying business.

$STREAM and collaborative research “seasons”

Water & Music’s Web3 strategy will span both fungible and non-fungible tokens.

The main pillar of our framework will be $STREAM, a “research token” that represents high-quality, tangible contributions to our larger project of collaborative research, knowledge-sharing and community-building in music and tech.

At the outset, the $STREAM token will have no inherent financial value. Rather, the token will function primarily as on-chain credit for contributions across our Discord server, editorial and research verticals, in-person events and more. Over time, token earnings and ownership will carve a path to governance for our most active contributors, who will have a say in the future of our collective research agendas and of the Water & Music DAO as a whole.

We are currently piloting Season 1 of a new collaborative research format, in which we work together with members of our community to assemble the definitive, foundational syllabus on a particular trend in music and tech. In a somewhat meta turn of events, Season 1’s theme is about the current state of music and crypto. We currently have over 30 of our members opted in to collaborate on research across multiple different working groups including music/web3 tooling, NFT royalties and contracts, generative music NFTs, fan sentiment analysis and fan onboarding case studies, covering tasks and skills including interviewing, writing and data analysis/visualization.

All contributors to Season 1 of our collaborative research will receive a launch airdrop of $STREAM in early December, which is when we plan on publishing the results of our work.

Given our existing community history and growth journey leading up to this point, we will also send a $STREAM airdrop in December to the following people:

• Writers and researchers — people who contributed guest articles to Water & Music in the past, and/or are helping us put together our collaborative reports today.

• Moderators and discussion leaders — members who have led high-quality discussions about the music industry and guided/onboarded new members in our Discord server.

• Longtime supporters — members who have supported Water & Music financially from its early days (including on our old Patreon page).

• Current and former team members of Water & Music — people who have helped guide the higher-level strategy of the organization as a whole.

In the near future, we also plan on dropping limited-edition NFTs (using tools like Mirror’s Editions) around the debut of each season, which will allow a wider range of outside stakeholders to be recognized on-chain as supporters of Water & Music’s mission. Funds from these NFT sales will be distributed among core contributors to our research and community projects.

We are still in the process of designing this framework, and would love to hear any feedback you might have on these initial concepts at hi@waterandmusic.com or on Twitter.

Preliminary roadmap

• Nov 12 (today!) — Seed Club demo day + Hello World post launch

• Dec 6 – 10 — Season 1 premiere week + genesis NFT drop

• Week of December 13 — Launch $STREAM drop to Season 1 contributors and historical community members

• Early January 2022 — Season 2 launch

The $STREAM team

Our current team ushering Water & Music into this new era includes:

• Cherie Hu (founder/publisher) — Longtime music/tech writer and researcher, excited about building systems that promote experimentation, foster interdisciplinary thinking, break down industry silos and lower the barrier to learning.

• Alex Flores (tech) — Full-stack developer interested in the future of collaborative knowledge exploration/synthesis, info visualization and decentralized organization structures.

• Diana Gremore (research) — Live music industry professional with an agency/promoter background, now focused on creating technology to change the way the live music industry works with data; excited about the challenges and opportunities in Web3 PR, URL<>IRL connections and decentralized organization structures.

• Kat Rodgers (community) — Varied background across music journalism, social media management and management consulting; passionate about community-building as a driver of change within the music industry, in both fan communities and industry-facing circles.

How to get involved

The most direct — although probably least Web3-native — way to support Water & Music right now and get to know our voice and community better is to sign up for a monthly or annual membership on our website. This will give you access to our private Discord server, as well as the exclusive articles and newsletters we send every week distilling music-tech trends in an accessible, concise voice.

That said, we understand that you might not be mentally ready or financially able to pay a membership fee upfront, especially without first earning our trust.

With that in mind, we invite you to fill out this general interest form if you’re interested in staying up to date with our token strategy, upcoming collaborative research seasons and NFT drops and opportunities to get involved in our community. Identifying information on the form like ethnicity, gender and location are 100% optional, but will be helpful for us as we look to recruit and curate a diverse range of contributors for future research seasons, especially those who might need financial aid.

You can also follow us on Twitter below:

https://twitter.com/water_and_music

Thanks so much to everyone who has supported us so far, and we’re thrilled for everything that’s in store!! ✌️

Over the past few weeks, Berlin-based creative collective CO:QUO has been hosting a virtual panel series titled Music Futures & Simulacra, exploring the use of “symbols and signs to imagine new futures for the music industry.”

The first panel, focused on the future of NFTs and crypto for music, took place via Zoom and Facebook Live on June 16, featuring perspectives from artists, researchers, developers and curators. With a healthy dose of skepticism and criticism, the discussion dissected not only how artists can leverage NFTs to gain more ownership over their careers, but also the significant cultural, financial and ethical risks associated with this emerging infrastructure that tend to get overlooked in mainstream music-industry conversations.

The full recording of the panel is available on Facebook, but we also wanted to publish a text recap of the key themes and takeaways here on Mirror. This specific platform also gives us a chance to put the panel speakers’ collective enthusiasm for collaborative crypto economics into practice, in even a small way.

This article will be free on Mirror (and the blockchain) forever, but you have the option to support our work and our ideas by tipping us in ETH — and contribute to supporting marginalized voices in crypto in the process.

Using a smart contract known as a Split, your tips will automatically be distributed evenly among the following parties (each person/organization gets 10%):

A. The panel speakers

• Kaitlyn Davies/CO:QUO (moderator/host)

• Chloe Alexandra Thompson

• VÉRITÉ

• Zola Jesus

• Mat Dryhurst

• Michail Stangl

• Cherie Hu

B. The co-writer of this recap, Kat Rodgers

C. Two organizations dedicated to supporting marginalized artists in crypto

• The Mint Fund

• herstoryDAO

This article is also the beginning of a “crypto publishing experiment” for Water & Music, Cherie’s paid newsletter about music and technology, which runs primarily on Patreon and Discord. Over the course of the next few months, we’ll be publishing deep-dive analyses of music/crypto projects and business models on Water & Music’s Mirror page, experimenting with different options for readers to compensate contributors and/or even earn access to our community Discord server using crypto (through crowdfunds, NFT sale, tips and more).

In the meantime, if you enjoy the below recap and/or want to support the people who gave their time and expertise to this panel, any amount in tips would be greatly appreciated. <3

CO:QUO panel recap

This recap is broken down into five themes that emerged from our panel discussion, each representing a different tension, challenge or opportunity in the current state of music and crypto:

• Crypto idealism vs. music-industry pragmatism

• The myth of NFTs’ speculative value

• Reconciling the tension between the highly individualized, libertarian origins of crypto and more collective practices in music

• Letting artists control not only the flow of money, but also the incentives

• Critique and transparency as tools for change

Crypto idealism vs. music-industry pragmatism

At the beginning of our panel, moderator and CO:QUO co-head Kaitlyn Davies explained the context behind the name of the panel series. The word “simulacra” in particular — which refers to the presence of signs and symbols in place of reality — was popularized first by sociologist Jean Baudrillard in the 1980s, then by the Wachowskis in their renowned film franchise The Matrix.

“Over the last few years, I started to notice signs and symbols replacing all of my realities, which was certainly exacerbated by the ongoing global COVID-19 pandemic,” said Davies. “But rather than stay with the more dystopian approach that the Wachowskis did with The Matrix, I was more interested in a utopian approach — in building and imagining utopias and new futures, specifically for the music industry.”

The rapid rise and fall of music NFT hype is a perfect example of people conflating signs and symbols with reality — not just in the literal sense of viewing a JPEG tied to a digital token as equally “authentic” and “real” as the physical world, but also in the metaphorical sense of perpetuating certain myths about how NFTs work and how the artist-fan relationship should look that don’t always line up with the reality of how artists and the music industry operate.

VÉRITÉ is an independent artist who has been active in crypto in recent months — most recently selling a portion of master recording royalties for her single “by now” to a fan in the form of an NFT. That said, due to current limitations around royalty payments, that revenue split had to be implemented off- rather than on-chain through traditional legal agreements, with the NFT merely acting as an authenticated “purchase receipt” of sorts on top of the song. Other auctions like Jacques Greene’s “Promise” NFT and Lil Dicky’s “Save Dat Money” NFT had a similar limitation — i.e. auctioning royalty shares through NFTs, but actually implementing those share agreements through traditional music-industry processes that pay out royalties more slowly.

NFT

On this note, during our panel, VÉRITÉ pointed to how two simultaneous conversations were emerging within the music NFT community: “The idealism of what NFTs can be, and the pragmatic and practical reality that we still have to be in relationship with more antiquated systems, especially within the music industry to make that work.” The way in which royalties are collected in particular is a “50-year-old clunky system with a black box that definitely benefits the holders of that black box,” she said.

A sense of pragmatism needs to be considered not only for issues like fractionalized royalty payments, but also for the realities of fan behavior and how everyday people do (or don’t) value culture.

First things first: “The masses do not value digital assets,” said VÉRITÉ. “They do not value the MP3. The idea that we’re going to raise the price of a stream beyond 0.004 cents — I don’t believe that is going to happen.” Crypto is also still inaccessible enough such that the vast majority of VÉRITÉ’s fans are not active in that community: “I have probably five fans participating in these things. Until I’m able to issue NFTs with a fiat option and a credit card onboarding ramp, so I can give my fans the experience of owning a digital asset and having them internalize that [experience], they’re not coming over.”

A related misconception in the crypto world is that there is a critical mass of fans who want to act as financial investors in their favorite artists. Michail Stangl — who works at Zora (the protocol that powers Mirror), curates the CTM festival and formerly served as host and lead programmer for Boiler Room — pushed back on this idea that the artist-fan relationship should be financialized in this way by default.

“A future in which every interaction between audiences and musicians is a financial transaction is dystopian to me,” said Stangl. “A lot of spaces that are designing [crypto] technology assume a certain relationship between fans and artists … if your reality is staring at crypto charts all day, you might think my relationship to my favorite artist is one of an investor. But 99% of fans don’t want to handle cultural investment portfolios, tracking which ‘blockchain track’ is the hottest that might create revenue for them if they sell their fractional share. That is not the way we engage with culture.”

It will take several years to reverse the widespread devaluation of music consumption, which VÉRITÉ suggested is a necessary side effect of overall “market saturation” in music and the fact that “the creation and distribution of music is now fully democratized.” That said, it’s still common knowledge that fans value music in at least some way, even if it’s not reflected in streaming economics.

“They are lovers and consumers of art, and they do want to support the artist — we just need new ways to enable them to give that support,” said VÉRITÉ. “We can add these additional value layers, whether that’s membership to a community, or providing people with an experience that’s bigger than just clicking on something and listening to it.” In this process of devising new means of artist-fan support, this is where it’s important to “center voices who have a pure idealism about what we can build.”

The myth of NFTs’ speculative value

Independent artist Zola Jesus was one of the more critical voices in our discussion when it came to the current state of crypto in music. In a previous interview with Pitchfork, she had expressed her frustration with the financialization of music NFTs, arguing that the market would only become fair for artists once “the art is being purchased for the merit of what it expresses, rather than what profit it could yield in the future. I don’t want people to bet on me like a racehorse.”

Pitchfork

During our panel, Zola Jesus expressed similar sentiments. Initially, she said, her impression of NFTs was positive; she had viewed the technology as an antidote for the corporatization of the music industry — particularly for the “disillusionment” she’d experienced while having to navigate “endless corporate structures,” forcing her to “play a game outside of music itself … [Crypto] was a whole new way to create art, and to be able to find homes and support for that art.”

However, she quickly became suspicious of the intentions of the buyers of her art, and concerned that her art was just becoming “a means of profiting off speculation.” Rather than representing any real challenge or alternative to mainstream culture, she felt that NFTs in their most hyped-up, auctioned form were simply “further enmeshing us in financial contracts and capitalist frameworks,” with artists being “traded like stocks.”

Chloe Alexandra Thompson, who is First Nations (Cree), drew a deeper historical connection between the “cash-grab, transactional rhetoric” around NFTs and “movements around resource extraction and the emergence of new physical colonies on Indigenous land, like mineral mining” (an analogy that is especially relevant given the environmental concerns around proof-of-work blockchains). The end result is an environment where art is merely being “objectified,” rather than “supported and engaged with in a caring way.”

Fortunately, the speculative value of NFTs is largely a myth, anyway. For one, the five- to seven-figure auction model has largely fallen out of fashion for music NFTs. According to research spearheaded by Water & Music, monthly music NFT sales plummeted by 80% from April to May, and is projected to plummet by another 60% to 70% month-over-month in June. Moreover, according to an economics paper published by researchers across the U.S. and Europe, under 10% of NFTs that generated a primary sale since 2017 ended up generating a secondary sale within a week, and only 22% generated a secondary sale within a year.

Music NFT and social token database

Artist and researcher Mat Dryhurst suggested that mainstream media incentives had a lot to do with NFTs’ rise and subsequent fall. In search of sensationalist news, mainstream media outlets automatically navigated towards the six- to eight-figure sales coming out from only a small handful of platforms and actors in the NFT market, even if those outlets had only a rudimentary understanding of how NFTs actually worked. At one point, even SNL got on board.

“Even in a decentralized ecosystem, you don’t get to decide when people choose to pay attention to things,” he said. “Now, everyone associates ‘web3’ with ridiculous valuations for things that are quite clearly entangled in some dodgy stuff.”

Perhaps the biggest example of this dodginess that seems to have gone over many people’s heads is that the buyer of Beeple’s $69 million NFT on Christie’s — Vignesh Sundaresan, a.k.a. MetaKovan — had a clear conflict of interest. Sundaresan himself is working on his own NFT platform called Metapurse, which offers fractionalized investment opportunities in bundles of NFT artworks. The company makes “B20 tokens” available for fans and investors to purchase and trade themselves to represent a stake in the fund. The kicker: Metapurse gave Beeple 2% of B20’s entire token supply shortly before purchasing the artist’s record-breaking NFT. As Ben Davis wrote for Artnet, “This means that Beeple essentially owns 2 percent of the fund that purchased his work at auction.” Of course, the value of the B20 token then went up 13x in the days following the Christie’s sale.

CNBC

“Someone will drop like $30 million on an NFT, which of course sounds like an insane amount of money — but then when you follow the price of the token that they own, a billion dollars in value gets added to the company,” said Dryhurst. “That’s a marketing campaign. It’s what marketing is: You invest money in order to get returns later. Of course, the media loves these kinds of big-ticket narratives, and bought into it — meanwhile, protocols like Zora and many others are quietly building something which is at odds with that mentality and those objectives.”

This media miscommunication probably led a lot of investors to lose their money on NFT sales, creating a general disillusionment in the market that led to a 90% dip in month-over-month sales in May. Once again, though, the media was incentivized to cover the downfall of the hype that they themselves created. “I think there’s been a bit of a sabotage campaign between the highly coordinated actors pushing for a very specific vision of how [NFTs] work, and a media that is very, very thirsty to write about bad news,” said Dryhurst.

Stangl agreed, elaborating that the notion of NFTs as “provenance” or as artificially scarce digital collectibles is “only half the story.” Instead, in Zora’s case, Stangl explained that the protocol is even more about redefining and redistributing value than merely about capturing more of it. “Our goal is build an open-source infrastructure that allows anyone to use NFTs to make two fundamental decisions: A, what has value — it can be monetary or something more abstract, social and participatory — and B, how do you distribute that value?” said Stangl. “That allows you to create a matrix where anything from maximizing your personal wealth and selling your asset at the highest value possible, to new models of collective co-creation and redistribution, are possible.”

This brings us to the next section…

Reconciling the tension between the highly individualized, libertarian origins of crypto and more collective practices in music

One major gap in a lot of music-industry conversations about crypto, Web3 and smart contracts is that these technologies aren’t just about creating new ways to sell more stuff. At scale, they’re about creating entirely new ways of governing and constituting societies. (Light stuff, we know.)

“You’re moving on a constitutional level, where you provide rule sets on how one should constitute oneself, in a social system that is utilizing smart contracts to constitute, govern and process itself,” said Stangl. “The question then is, what do you center in terms of your definition of societies? That is the really exciting thing — ultimately what you are creating are blueprints.”

The crypto platforms that have gotten the most mainstream media coverage to date tend to center a more libertarian view of sovereignty, self-ownership and individual autonomy as opposed to collective action. Cherie mentioned BitClout as one of the most extreme versions of this philosophy in practice, where someone’s individual value is investable, tradable and entirely tethered to their social clout — an extension of the individualism rampant in influencer and “creator” culture.

Importantly, though, the whole point of decentralization is not to ask people to conform to a singular view of society. “If you look at societies that center solidarity or neutrality in the way that they constitute themselves … you can now put those principles into a smart contract and make it part of the blueprint,” said Stangl. “It’s not just a box that you tick at checkout, like, ‘here’s your 1 euro of solidarity if you want it.’ It can be part of the deeper technological blueprint, so that anything you do in the system is rooted in solidarity.”

A big source of current music/crypto tensions, then, is what Stangl calls “a cultural clash, where a lot of crypto and blockchain is coming from a particular sociodemographic group with a particular view on how society works” (read: libertarianism). This is arguably in conflict with the more collective ways in which many artist and fan communities organize and interact with each other — a conflict that the artists clearly voiced during our panel.

Zola Jesus was particularly critical of crypto models that seemed to wring creative control and authority away from artists. “That’s something I don’t want to feel like I have to negotiate with my fans … like they have some sort of authority over what music I make or what direction I take as an artist,” she said. “I guess I’m a little more punk in that way, where I don’t want to feel that level of financial tether to a fan base. I don’t want to just become a stock, or feel like I’m getting further embedded into a financial structure that is going to only limit or suppress wherever I want to take my art and my passion. That’s been my biggest concern.” Zola Jesus does have an active Patreon page with around 700 members, but she said that that experience has made her feel more protected from the isolation and the “sea of competition and market performance in the music industry … I feel supported in a way that breeds charity, compassion and breeds community.”

Thompson was similarly interested in an implementation of crypto that better reflected the collaboration and interdependence of creative communities. “What I’m more interested in around 3.0 and decentralization is not so much this replication of, ‘I’m a popular artist or I’m getting discovered in the crypto community, thus I get much money,’” said Thompson. “It’s about how we can collectivize and create independent agencies which allow for group safety and redistribution of resources — thinking about the past record-label model not in the problematic way where artists have been excluded … but how advances were made at varying tiers of people’s careers to help bring them up and support their practice, and how that supports mixing engineers, producers and all these different people who are part of making work.”

VÉRITÉ more openly acknowledged the notion that, yes, her fans are investing multiple kinds of resources into her work and community “all the time — whether it’s listening to my music, coming to my tour, buying my merch,” she said. Hence, crypto at large could be a valuable tool for her to “give fans an incentive to participate and become a meaningful part of the community, and raise the community’s overall value. And then it’s actually really easy to weed out bad actors, because if you’re just buying my NFT as a speculative thing, you’re probably not going to contribute value into the fan community because that takes a lot of heart, time and effort.”

The point, though, is that the value of the community is self-sustaining, and is something that exists beyond just the individual artist — which VÉRITÉ suggested could act as a safeguard from the kind of mercenary profiteering that artists like Zola Jesus understandably have reservations about. “My Discord server exists without me,” said VÉRITÉ. “I’ve built a community of people who like to hang out and can entertain themselves while I go away for a month. That becomes the goal, where the community isn’t fully dependent on me as this pillar and this center, but where you’re building something that has a greater meaning than just yourself.”

Letting artists control not only the flow of money, but also the incentives

Moving a bit beyond just NFTs, much of the panel discussion focused on the value of protocols and DAOs (decentralized autonomous organizations) at large for giving artists the control and ownership they’ve been demanding from centralized platforms for decades.

“Spotify and Instagram were designed with one thing in mind: To profit the bottom lines of the people who designed them,” said Stangl. “All of the functions and business outcomes were in essence predefined, to benefit those who designed the systems.” (Investor Li Jin posted a lengthy Twitter thread this week with the same argument: “Without ownership … Creators, by working, are strengthening platform owners’ domination over their ability to work.”)

Li Jin

Similarly, one of the main reasons big-ticket NFT auctions seem like the “only” outcome of the NFT ecosystem is because a small handful of platforms have largely been responsible for driving the now-mainstream media narratives. “We have to give artists the tools to make those design decisions in an informed way, and then benefit from the outcome of those decisions,” said Stangl. “A lot of these things don’t need mitigation or third parties that inject themselves into a particular revenue stream. They can still participate, of course, and still create a value proposition, but that value cannot be justified just by injecting yourself into the part where money passes from one hand to another.”

One such way to give artists control over their own platforms is through protocols that allow them to code their own economics into their creative works. For instance, Bas Grasmayer wrote last year about how companies like Audius are trying to let artists use smart contracts to set their own per-stream rates for consumption of their music online. Protocols like Zora — and the platforms that run on them, like Mirror and Catalog — give artists the ability to bring in multiple collaborators to share revenue on a given creative work, or even wire funds instantaneously to public goods. During our panel, Cherie mentioned that this could lead to a greater diversity of artists getting rewarded for their work — instead of merely “incentivizing repeat consumption” as the dominant DSPs do, which arguably gives an advantage to pop artists while disadvantaging artists who work in less “bingeable” modes like classical, jazz or experimental music.

Music X

Music- and creator-focused DAOs like the Song That Owns Itself (STOI), Seed Club and herstoryDAO are also becoming increasingly popular for aligning incentives among artists, creative collaborators, fans and industry partners, financially or otherwise. On our panel, Zola Jesus questioned whether DAOs are in any way different from a corporation; Dryhurst offered that the main difference was that “you could see the smart contract as the CEO,” and that “there’s nothing inherent in DAO tools that forces you to see them as a financial vehicle.” (That said, Wyoming recently passed legislation that would allow DAOs to register themselves as LLCs.)

Stangl emphasized that the appeal of DAOs for underground music communities might be less about financial gain outright, and more about facilitating and managing already-blurred relationships and responsibilities among members. “In the value creation of underground music cultures, the distinction between who is the consumer, vs. who is the artist or marketing person, is often very blurred,” said Stangl. “When you talk about event promotion, in 99% of the cases, that promoter is not a promoter — they’re someone who’s so engaged with the music community that they put their own money into populating the culture … We negotiate that all the time in terms of what audiences contribute, what festivals contribute, what cultural institutions contribute — it’s not as clear-cut as it is in the mainstream music industry.” DAO infrastructure can allow these grassroots communities to “renegotiate those power relationships” with fans and audiences in a transparent and open way.

Critique and transparency are tools for change

Last but not least, an important theme in our panel discussion was that the critique around music NFTs should not be interpreted as an excuse to shut down the system for good. Rather, voicing concerns at such a formative stage of this technology’s development will allow active stakeholders to shape the role they want it to play within culture and society in the long term. In Thompson’s words: “We’ve seen so much critique of these NFT platforms … and I want to make clear that I think critique is a form of care.”

Davies added that, in an ironic way, the rapid-fire media frenzy around NFTs is also leading to productive conversations more quickly compared to other kinds of technology in recent music history. “It took 10 years for the mainstream to be critical of Spotify, but it took three months for the mainstream to be critical of NFTs,” said Davies. “This criticism is good because it’s getting things more out in the open.”

Dryhurst added that the core reason why so many people have become so critical of music NFTs so quickly is also because of the technology's greatest selling point: Transparency.

“I don’t think crypto alone is creating financialization around culture,” said Dryhurst. “I think crypto is putting that on-chain, and making it all visible, guts and all … And one of the pros and cons of decentralization is that there is no ‘one thing’ in this space. If someone is interested in web3, the good news is that there is no central actor telling you how to interact with it. The bad news is that there’s no central actor to impede somebody else from doing something you don’t like. That’s the kind of bargain you enter into when participating in crypto.”

Many crypto community members and researchers are already wielding this transparency for more productive use, in terms of better understanding the power dynamics and economics around NFTs, social tokens, DAOs and other applications of the technology. It’s only because of this transparency, for instance, that we’ve been able to pin down that monthly music NFT sales are down by 80%; that figure is practically impossible to pin down in any other sector of the music business, due to data silos across multiple centralized platforms and companies. Others have also published helpful graphics visualizing token distribution for various blockchains, exposing the blockchains that contradict themselves by having mostly centralized ownership (i.e. majority-owned only by the founders and/or investors).

"Ultimately, we might be able to develop some fluency as to how culture is currently working and is currently traded, and how most people see culture as a vehicle for social capital or even capital-C Capital,” said Dryhurst. “And then from there: What are the protocols that we as an individual, community, label, magazine — what do we want to put in place now? That, to me, is a net positive.” ✯

ICYMI: If you enjoyed the above recap and want to support its contributors, you can send tips in ETH that will be evenly distributed among CO:QUO, all the panel speakers, the co-authors of this article and two organizations dedicated to helping marginalized artists navigate the crypto world, namely The Mint Fund and herstoryDAO.

CO:QUO panel recap