The shape of Web3 music communities: Internet forums with a shared bank account
Many of the world’s most famous musicians got their start in the online communities of the late ‘90s and early ‘00s. Before contemporary online giants in music and social media like Facebook, Twitter, Spotify and SoundCloud dominated the industry, blogs and internet forums offered creative petri dishes for budding producers to make their first steps and ultimately become hallmarks of pop, hip-hop and EDM. As trends tend to move in cycles, we can now see similar dynamics in newly fledged Discord communities and blockchain-based decentralized autonomous organizations, or DAOs.
Just like their predecessors, today’s Web3-based takes on community-building have a magnetic pull on early-adopter musicians, designers and technologists. But unlike their predecessors, these petri dishes also have bank accounts — with money from both investors and their own communities, which are used to fund new tools and creative experiments at breakneck speed and in a way that directly benefits creators as a whole.
Understanding tech trend cycles
To contextualize current developments, it helps to become familiar with two frameworks that both deal with cycles in technology adoption and innovation.
People working in music, tech and adjacent industries may already be familiar with the “diffusion of innovations” curve, which divides consumer adoption of new innovations into five different segments (innovators, early adopters, early majority, late majority and laggards):
A framework that is not as well-known is the product lifecycle curve, pictured below. The framework was first proposed in 1965 by Theodore Levitt, who argued that products go through three stages that may range from a single season to multiple generations until they enter a fourth stage of decline. In order to stave off this fourth stage, the practice of product lifecycle management seeks to extend a product’s life through continued innovation. As software can be updated at the push of a button, an ongoing innovation practice has become a major strategic pillar for incumbents that aim to keep their audiences engaged or subscribed.
A simple yet powerful example: Facebook and Spotify both started as desktop services, and extended their respective lifecycles by creating great mobile experiences. Had they not launched mobile apps in the late 2000s, the companies would likely be irrelevant by now. They have continued to innovate through features like integrations with more devices and smart content recommendation algorithms that give people new ways to connect to things they want to see or hear. This has allowed them to hold onto existing users, including the early adopters who signed up over a decade ago, while appealing to new joiners — people who are more likely to fall into the late majority or laggard categories in the innovation diffusion lifecycle.
Levitt’s product lifecycle graph could also be broken down by adopter audiences. As your product evolves, you’re likely to lose the earliest innovators first, because they’re always on the lookout for what’s next. For subscription products or ad-supported services, this loss may not look instant; instead, people might invest less into your service over time until they eventually churn. Next are the early adopters. They will also be power users with specific needs that may be expensive to cater to, since the majority of users won’t have the same problem (for example, a diehard music fan might maintain a sprawling music library with 1,000+ playlists that are hard to organize). As services focus on more mainstream use cases, early adopters become underserved.
In the context of music and tech, some of those underserved early adopters are artists themselves. A-Trak, DJ and founder of the Fool’s Gold label, describes musicians, artists and creators’ frustration with the status quo, as many of them are “made to feel like there’s only one way to release projects,” he tells me. “The internet was supposed to democratize the arts, but the all-powerful algorithms of streaming services and apps only gave us a new set of gatekeepers.” He points to Web3 putting a new form of power and leverage into creators’ hands: “The fact that it rose in popularity during Covid, after the pandemic put a lot of musicians out of work, says a lot about its power.”
As the incumbent music streaming and social media services of the past decade hit a plateau of stabilization in the product lifecycle, new opportunities emerge to cater specifically to early-adopter artists like A-Trak. Web3 as a cultural and musical space has eagerly detached itself from the individualized, algorithmic feeds that are common in Web2 today. Instead, the former scene makes gratuitous use of communal spaces on services like Discord, Telegram, Clubhouse and Twitter Spaces. It’s here where a new breed of creative professionals are laying a foundation that is going to shape music culture for a generation — only just hitting the introductory stage of the product lifecycle curve with NFT marketplaces, music DAOs and the tools they build along the way to govern themselves and create new opportunities for each other.
Lessons from music forums of the early 2000s: Hollerboard, Dogs On Acid & Ninja Tune
Internet community forums in the early 2000s filled a crucial gap for online music. While they were clunky, they allowed people to learn from and exchange ideas with each other and put artists’ music on the map way beyond their own cities or countries.
“This was just before YouTube even existed, and the internet wasn’t a world of money trying to sell you shit. So a lot of information was hard to find,” recalls Thys, an artist who creates music solo and with a renowned drum & bass group called Noisia. “Search engines weren’t great, so a lot of information was shared peer-to-peer. [As Noisia, we] made a lot of contacts on those forums. We were pretty internationally focused immediately, we weren’t attached to a local scene at all… so those forums were our scene, back then.”
Tim Exile, founder of “multiplayer” music-making app Endlesss, emphasizes how instrumental music communities were to kickstarting his music career. “Just regularly showing up striking up conversations with the community helped gain kudos through replies and engagement which then helped me get noticed by labels and other known artists,” says Exile, who went on to release albums on labels like Planet Mu and Warp Records before starting his current music tech company.
In an interview with VICE, Chicago-based Willy Joy described the Hollerboard forum — which counted musicians like Diplo, Louisahhh, and Flosstradamus among its users, and shaped and accelerated the rise of dance music in the US — as “SoundCloud before SoundCloud.” A-Trak was another Hollerboard member; in the description of his “Hollerboard Redux” mix, he reflects on how influential the community was for contemporary music:
“Serato had just recently become available, so tons of DJs were converting their music library to digital and exchanging files with friends. Mashups were popular. The term EDM did not exist yet. We were all hip-hop DJs, but we were a bit bored with popular hip-hop. So we would go find other types of tracks and mesh them into our sets with a hip-hop feel. It was an era of huge creativity in DJing.”
The Hollerboard created a type of social “record-digging culture” where “DJs were helping each other fill gaps in their collections, even in their knowledge,” A-Trak tells me, as he describes how DJs and producers shared files through the forums and even physical hard drives sent through mail.
Hollerboard was far from the only online community to make its mark on music culture. From drum-&-bass community Dogs On Acid, to hip-hop boards like RapMusic.com, B-Boys.com and AllHipHop, to labels and artists like Ninja Tune and Erol Alkan who ran their own communities, the web was full of digital watering holes of hundreds and sometimes thousands of people each who would gather to discuss various topics, post music, collaborate and share production advice.
But as people were pulled into Facebook, Twitter and Reddit throughout the 2010s, almost none of these early communities survived — crashing through the decline stage of the product life cycle until it wasn’t viable to keep the servers running anymore.
What happens when music communities get a shared bank account?
The tech giants of the Web2 era are still firmly entrenched, but they haven’t been able to address all the needs of early adopter audiences. This has created room for services to cater to emerging early-adopter behaviours, often with significant amounts of venture-capital funding in tow. In the past year, we’ve seen music marketplaces like Bandcamp, video and audio livestreaming platforms like Twitch and Clubhouse and multimodal social apps like Discord fill in that gap.
One recent trend that could have even more significant implications on the economics and long-term sustainability of these communities is the rise of NFT platforms and blockchain-based communities such as DAOs. The early Web2 generation of music communities had a profound impact on music culture, despite having no money. What can the Web3 generation of music communities achieve when they have a shared bank account?
Friends With Benefits (FWB) is one of these DAOs and has combined various cultural communities into one, from early NFT pioneers to Burning Man VCs to DJs like Thys and A-Trak. Founded by Trevor McFedries, who is also the creator of virtual idol Lil Miquela, FWB requires people to hold its community tokens ($FWB) in order to access its Discord, newsletter, events, meetings and more. As an aspiring FWB DAO member, you can attain these tokens by swapping them for cryptocurrency on decentralized exchanges like Uniswap, which gives the community treasury liquidity in the form of ETH, the cryptocurrency of the Ethereum blockchain. Or, you can earn $FWB by selling NFTs through marketplaces like Zora and Catalog that allow you to set the price of an NFT in $FWB terms. As a member, you may be granted additional tokens in exchange for work done as part of teams that serve the community. If you decide FWB is not for you, you can sell the tokens and cash out at whatever the valuation of the tokens is at that point. While in some cases this scenario invites financial speculation (the price of $FWB has gone up more than 10x since June 2021), the overall mechanic is common for DAOs and allows for members to participate in the value they create.
FWB has an active music community, and many of its members already make (some) money from the sale of NFTs or participation in other DAOs. Thys, for example, sells music as NFTs through Catalog and was part of one of the “genesis NFT” creator teams of the Songcamp collective, another music DAO. He sees the current phase as exciting, but uncertain. “I am pretty confident something radical will happen here. I’m keeping a close eye on it,” he says. “But it’s too early to predict which [initiatives] will stand the test of time.”
Communities like FWB and Songcamp often work in thematic seasons, each with a specific mission they’d like to accomplish. For instance, Songcamp’s latest “season,” Elektra, encompasses not only NFTs, but also a world-building exercise through music, visuals and a Discord server set up as a game. The season started through an NFT-based crowdfund which raised over 41 ETH, or $129,000 in fiat at today’s rate, which went into the community treasury to be distributed to contributors ranging from musicians to visual artists, programmers, strategists and project managers. The season ends with Elektra being spun off as a DAO with its own $ELEKTRA community tokens that have been distributed to its creators, contributors and NFT buyers.
Communities with bank accounts can also decide to take their impact offline. Many early Web2 communities had a physical geographic dimension, often rooted in local music scenes through events. Drum&BassArena, an early community founded in 1996, started organizing events many years ago, and still does so today. Its mother company, AEI Group — founded by the same founders of the forum in 1998 — is now also home to brands like UKF and NCS, which started as YouTube channels and also have an offline dimension through festivals and events. The company even launched a coworking space “with music at its heart” in London called the halley.
One example of this URL-to-IRL connection in action in Web3 today is CabinDAO, which was spun up to fund tokenized residency programs at Creator Cabins. Based physically in Texas, “and globally on Discord” in their words, Creator Cabins attempts to bring Web3’s principle of decentralization to the physical world and calls itself an “experiment in decentralized cities.” Holders of the community’s $CABIN token can participate in the CabinDAO and vote on future participants of the residency program’s cohort, which caters to “creators” in the broadest sense of the word. In the process, they intend to develop “DAO-based governance models for physical spaces,” according to their website. Some of the artists they’ve hosted include Jon Gold, who recorded sounds of nature at the cabins to incorporate into his projects, and Jasmine Mitchell, who wrote a rap musical.
Radical new beginnings, drawing from history
Thinking back, A-Trak says it feels like everyone from the era of Web2 music communities is up to something interesting now. “Some became huge DJs, some are booking agents, some started their own businesses and some remained oddball counterculture people,” he tells me. “There was something inherently radical about those boards.”
Radical would not be an exaggeration to describe budding Web3 communities like FWB as well. Due to the nature of the Ethereum blockchain, with its publicly viewable database of transactions, tokens and smart contracts, many DAOs often find easy ways to build out their own infrastructure that can tap into anything on the blockchain.
When YouTube recently withdrew API access for most popular Discord music bots, a few people from the Songcamp DAO took it upon themselves to build a new bot that plays music NFTs minted on the Catalog marketplace instead. Within a week, the community had its music NFT bot crowdfunded and prototyped to a point where it can play music in Discord channels. The bot, called BPM, is supported by a small DAO called Club BPM which also has its own Discord server. The group is now considering throwing events in which money raised through tickets is paid out to the creators and collectors of NFTs played during the event.
Unsurprisingly, this type of activity is catching the attention of investors — but DAOs are bringing investors into the fold in radically different ways compared to what is standard in Web2. For instance, FWB recently held a community town hall to discuss a swap of a portion of the community’s tokens in exchange for $10 million in USDC (a digital stablecoin pegged to USD) from investors including Andreessen Horowitz. This is extraordinary not only because FWB is little more than a tokenized Discord community with some basic tooling (for now), but also because the community was actively involved in determining whether or not the investors were right for the collective as a whole.
The status quo of services in the digital music landscape has plateaued, and is struggling to create new meaning and outlets for the innovator and early adopter audiences. Meanwhile, new tools, communities and experiments are emerging on a daily basis — often plugged into the same blockchain for their data.
This mirrors the landscape and dynamics of the early days of SoundCloud, Facebook, Twitter, Spotify and countless other apps and services. Suddenly, these companies emerged with open APIs, which allowed people to build new services that pulled from the data & tools offered by these companies. The results were powerful, and for years hackathons were a standard component of every larger music conference. Over time, though, for reasons ranging from music licensing to value-capturing strategies, companies started restricting their APIs and this phenomenon became a less common sight.
Now, with Web3, there are various mega-APIs in the form of blockchains like Ethereum, Solana, Tezos and others that won’t be restricted due to their inherently immutable nature. And once again, technical and creative talent come together in great numbers to explore what can be built together. In this way, the early Web2 communities’ mentality of open networking, experimentation and collaboration has shaped music culture to this day. Reflecting upon the dynamics of Web3 communities, A-Trak mentions that friends who were also active in the internet forum and blog era of music “all say that this captures a similar DIY feeling.”
The big difference this time from Web2 are the available resources and the velocity at which communities can move. DAOs can raise funding from their communities quickly and create music, tech tools, narrative-driven worlds and even decentralized cities to support themselves. It’s this dynamic that pulls innovators and early adopters into a new cultural and technological playground — a playground that’s just as clunky and hard to understand as the early internet was, as Web3 still matures through its introductory phase of the product life cycle. When the Web2 moved from its introductory stage of blogs and forums to the growth stage of modern social media, its early adopters transitioned from simple community members to cultural tastemakers on the platforms that turned into today’s landscape of incumbents.
As the adage, that’s commonly (mis)attributed to Mark Twain, goes: History may not repeat, but it often rhymes.
Full disclosure: The author owns small amounts of Bitcoin, Ether, the social tokens $FWB and a small amount of $ELEKTRA. His NFTs and fractional tokens can be seen in his wallet at basgras.eth.