The week in music, tech and crypto: Lil Nas X's (nonexistent?) NFTs, Deezer's livestreaming play and more
Music/Audio Tech Investment Dashboard
Music startup funding rounds
We’ve added Deezer’s investment in Driift, a music livestreaming production company.
Driift is the mastermind behind several projects that were considered landmark case studies in the evolution of music livestreaming during the pandemic — from Laura Marling’s ticketed livestreams at Union Chapel in London to Spotify Live, a series of premieres of pre-recorded performances from the likes of Leon Bridges and The Black Keys. (They were also behind the most recent Glastonbury livestream, which faced significant technical difficulties.)
This marks Deezer’s second investment in a music livestreaming company this year. The first investment was in Dreamstage, announced in May 2021.
Last month, we pointed out the significant gap between venture-capital funding in music livestreaming platforms and the actual consumer demand for the format — which, per some sources, sits at 5% of the general US population. That said, we also argued that there could be a lucrative exit strategy for these livestreaming platforms, as almost every major music streaming company — including Deezer, Spotify, Amazon Music and Apple Music — has expressed interest in hosting virtual music events on their respective platforms.
Music startup exits
Dapper Labs announced their acquisition of Brud, a decentralized storytelling studio most known for their digital characters like Lil Miquela and Blawko.
Brud is not a music company per se — but Lil Miquela has released several songs on streaming services (under the moniker Miquela), and has significantly influenced the music-industry conversation around the role of avatars in artist branding and the overall fan experience. In addition, the company’s founder Trevor McFedries (who also founded the DAO Friends With Benefits) has a background in music as a DJ and producer.
As part of the acquisition, Dapper Labs is creating a new division focused specifically on building tools for DAOs. We’ve argued in the past that the next big opportunity in music and crypto might be more around long-term DAO tooling for artist and fan communities, rather than around short-term NFT tooling.
Music Crypto Dashboard
Music NFT drops
On the whole, we’re seeing a lot more “announcements about announcements” than actual, concrete economic activity around music NFT drops this week.
Case in point: Lil Nas X’s NFTs with TikTok were supposed to drop last Wednesday (Oct. 6). But after scouring the Internet, we still can’t find where those NFTs are, and there has no communication from any of the parties involved (Lil Nas X / Columbia, TikTok, Immutable) about a possible delay of the launch.
Lil Nas X himself, ever the active Twitter celebrity, has not posted about his own NFTs at all on social media, either. But he has been actively promoting his collaboration with esports organization 100 Thieves.
We’ve written about this before in previous digests: You would think that messaging and education around music celebrities’ NFTs would be clearer, more consistent and more proactive by this point, now that we’re several months into the general music/crypto hype.
If it turns out that this drop got pulled for whatever contractual, legal and/or marketing reasons, it certainly won’t be the first case of its kind in the music industry. Several other artists like Jacob Collier, Charli XCX and A.C.E. have announced high-profile NFT drops, only to pull back on their efforts after the fact due to backlash from fans.
In the world of NFTs bridging the URL/IRL gap, Metapurse — the NFT investment fund founded by MetaKovan, the guy who paid $69 million for Beeple’s NFT at Christie’s — will be hosting a music- and art-themed NFT festival called Dreamverse at Terminal 5 in NYC on November 4, 2021. Featured performers include Alesso, RAC and PLS&TY, all of whom have released their own NFTs in the last year or plan to do so in the near future. This event will likely focus on courting a more exclusive, wealthy crowd, with individual tickets starting at $175 a pop. Tickets can be purchased either through Terminal 5’s box office or in NFT form thru YellowHeart.
NFT platforms focused on music
As we covered in our Extended Play column this week, it seems at this point like new music NFT platforms are being launched on a daily basis. Many of them are claiming to have a unique selling point of connecting fans directly to artists — but most of them haven’t done any drops yet or demonstrated genuine differentiation from the increasing competition in the market, nor any innovation in the utility of NFTs beyond limited-edition digital collectibles.
One new music NFT platform our radar is the new music arm of Republic, an equity crowdfunding platform that has partnered with Opulous to allow fans to invest in fractional shares of artists’ streaming royalties through NFTs. Initial partners on the artist side include Lil Pump and KSHMR. There is no official launch date for either of their royalty investment NFTs yet — the main landing page only displays the message “dropping soon.”
This makes Republic a direct competitor to 3LAU’s new startup Royal, which launched in August 2021 and offers a similar concept of fractional investments in artists’ streaming revenues. The main difference is that Republic’s music offering, like the Republic platform as a whole, seems to be limited by government regulations that restrict who can partake in equity crowdfunding campaigns for startups, and how much people can invest over a given period of time relative to their individual income. The inclusion of NFTs as a vehicle is therefore just a decorative, PR-friendly gloss over a still highly-regulated investing mechanism.
In his recent piece for Water & Music, Dan Fowler argued that many supposedly “disruptive” music/crypto projects do not actually meaningfully challenge the status quo because they “are ultimately still reliant on old-school royalty flows to generate value in their systems.” Republic Music is a perfect example of this: Despite its NFT-centric marketing, it’s still reliant on traditional, bureaucratic, centralized royalty payment infrastructure to deliver value to fans and investors.
One higher-level pattern we’ve also observed in our data is that Nifty Gateway — historically the No. 1 platform for music NFTs in terms of primary sales — doesn’t seem to be hosting music drops anymore. Instead, they seem to have pivoted to a more limited schedule of drops with visual and multimedia artists, akin to what Christie’s and Sotheby’s might focus on for their own NFT auctions.
It’s unclear why Nifty Gateway has stepped away from music. Perhaps there’s just a bigger market in visual art NFTs than in music/audio NFTs for now. Or perhaps many of the major-label artists that Nifty was partnering with ran into prohibitive licensing disputes with their label teams. In any case, the virtual absence of Nifty from our recent music NFT updates reinforces how quickly the market has changed in a matter of just a few months.
Music SVOD Partnerships Dashboard
Justin Bieber just released a new concert documentary on Amazon Prime Video titled Justin Bieber: Our World. The film goes behind the scenes of the star’s New Year’s Eve 2020 livestream, and is currently No. 2 on Amazon Prime Video in the US.
This makes Bieber at least the 14th artist to release a concert film exclusively on SVOD platforms in the last year. Previous artists on our list include Billie Eilish (Disney+), Ariana Grande (Netflix) and Nils Frahm (Mubi).
Justin Bieber: Our World is a perfect example of what we previously described as a “waterfall strategy” for monetizing music livestreams — leveraging exclusive deals with SVOD platforms, radio stations, movie theaters and/or other partners to extend the lifespan and revenue potential of an otherwise ephemeral livestream over a longer period of time.
Bieber’s upcoming world tour has been rescheduled not once, but twice; the latest announced dates for the tour kick off in February 2022. Releasing a concert documentary in the interim not only gives the artist a new revenue stream, but also maximizes the chances that he stays top-of-mind in the public consciousness while he waits to go back on the road.
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