Cryptocurrency can buy you a dance at a Las Vegas gentlemen's club or tickets to see the Dallas Mavericks in their 2018-2019 season. But if you're more into music than cabarets and sports, a record label in Texas recently started accepting crypto for music and band merchandise.
Founded in 2012, Feedbands is an Austin-based streaming service and label that supports independent musicians. Its bread and butter is a monthly vinyl release that spotlights an up-and-coming artist chosen by subscribers.
Graham Langdon, founder and chief executive officer, started Feedbands to give indie musicians an alternative avenue to make money and gain new fans — and crypto is the next frontier in that mission, he says.
Langdon likened the current era of cryptocurrency to the first years of the internet, when people began increasingly hearing about it and it was on the brink of transforming the economy and society. In April, Feedbands announced a partnership with Dash DAO, a form of cryptocurrency, allowing music lovers to buy music and merch with a digital wallet.
"If history has taught us anything, it's that those who are quick to seize the opportunity reap the reward," he says. "We want to help our artists seize the opportunity to start earning cryptocurrency so that years from now if it has exploded, which we believe it is likely to do, our artists didn't miss the boat."
How crypto could work in the music world
Any discussion about crypto revolves around two separate but complimentary concepts: the token, coin or currency; and blockchain, the technology that supports it. Both are enticing to musicians because they remove the need for third-party organizations such as labels, and are said to give artists greater control of their intellectual property. At least in theory.
Cryptocurrencies such as Bitcoin and Ethereum exploded in popularity in recent years, thanks in part to investor enthusiasm that sent prices skyrocketing — and plummeting — with unprecedented momentum.
While fans can purchase music and more on Feedbands using many different forms of crypto, its artists receive payments in Dash tokens that they can keep in a digital wallet or subsequently cash out in dollars and cents through a third-party exchange.
And why use Dash over more popular brand names?
"Dash is solving a lot of the problems that other cryptocurrencies have. For example, they can make instant transactions, which is really important when you're selling things," Langdon says.
Transactions using Dash are also private or "anonymous," unlike Bitcoin, which displays how much cryptocurrency is in each person's account, he adds.
"Imagine every time you swipe your credit card, the merchant could see how much you have in the bank," Langdon says. "So Dash kind of innovated on that, too — they made transactions instant, they made transactions private, and we see that as all the key pieces in place for commerce to be able to happen like it does in the real world."
Sam Howard-Spink, clinical associate professor of music business at New York University, has seen industry trends come and go. As a former music journalist, he covered the digital music revolution from the ground up and says he's encouraged by Feedbands' model because it covers music's past (vinyl), present (streaming) and possible future (crypto).
Dash is especially intriguing, he says, because its transaction fee is so small, it enables the music distribution company to send almost all of the revenue from recording sales to the artists making the records. Sound obvious? It's not, actually.
"This is a new emerging space for artists to actually recoup the majority of the value of their labor, which hasn't ever really been the case under the industrial system," Howard-Spink says. "The fact [that crypto] is available to use and [Feedbands] is encouraging people to do it is valuable and worthwhile."
Will it allow Feedbands a competitive advantage? "We just don't know," he says.
"And anyone claiming to know is lying."
What has to happen in the future
This new wave of music transactions has two sizeable variables: how long it takes for the greater population to adopt crypto, and how companies using it will adapt to listeners' habits. In 2016, streaming eclipsed sales as the primary source of revenue for musicians, according to the Recording Industry Association of America.
"Access," Howard-Spink says, "has now decisively flipped ownership as the dominant revenue model for the recording industry ... and it's growing super fast and has huge room for continued growth." What he means is that fewer listeners may be buying music in the future and instead paying for subscription streaming services.
In the months since partnering with Dash, Feedbands has experimented with incorporating it into the site's streaming strategy, paying musicians the equivalent of 10 cents in crypto each time their song was streamed. For comparison, Spotify's going rate is infamously a fraction of a penny per stream, according to numerous artists such as Taylor Swift and Radiohead's Thom Yorke, who at one time pulled their catalogs from the service in protest. (Both have since made their music available there again.)
Feedbands hopes to launch crypto pay-per-stream by the fall.
"That's where we see music streaming and cryptocurrency going," Langdon says. "Even if it's not Dash, we think that it's highly likely some cryptocurrency will want to partner with us as a music streaming service."
Whether crypto is 'the next revolution' in music
Like many musicians, Austin-based singer/songwriter Michael Garfield posts his albums on innumerable platforms, including Feedbands, for streaming and for sale. While he lauds Dash for its security features and instantaneous transactions, what most excites him is blockchain's potential to reinvent music publishing and licensing.
Blockchains provide a new way to record, store and distribute data in what's known as a "digital ledger." According to CoinDesk, a crypto trade publication, they provide a record of input data as well as transactions, making them virtually unchangeable.
"Copyright protection is totally ineffective and ultimately helps labels and publishers more than it helps the artist," Garfield says. Blockchain allows for automatic rights management, he says, by having all that information stored digitally as a "smart contract," which enforces copyright restrictions.
"If you're an inventor, you can publish your idea on the blockchain and if someone wants to use it, the licensing process can happen automatically without them having to contact you," Garfield says. "If somebody were to try and appropriate that file for commercial use without compensating you, they just wouldn't be allowed to."
Garfield, who has accepted crypto for merch and gig tips, isn't alone in his enthusiasm.
This summer, Grammy Award-winning musician Imogen Heap launched a blockchain initiative called Mycelia to ensure musicians are paid fairly in the digital era and offer a technological solution that makes that possible, according to the website. Heap created a "creative passport" template she hopes other musicians will adopt to keep tabs on the details of their intellectual property.
"It's about how to ease flow of payments, how to ease collaboration, how to grow partnerships, how to make better collaborations on a business level and a creative level," Heap told Business Insider in June.
The project is just one in a larger movement toward decentralization driven by blockchain and cryptoeconomics. One of cryptocurrency's selling points is that it's not "centralized" or stored in one database, but rather many databases. There are now efforts to apply that same thinking to music publishing and licensing, music curation and even journalism.
Howard-Spink, the NYU professor, says his students studying blockchain are "very evangelical" about its possibilities, but he's skeptical that it will revolutionize the music industry. One reason: There is a huge amount of music already cataloged, many times with inaccuracies.
"The data about who wrote that, who owns it ... that data is not always accurate, hasn't been for a long time and the idea you can impose accuracy on that system with blockchain is wrong," Howard-Spink says. "You might be able to, from this point forward, keep some sort of accurate record of who's involved in what. But the idea you can propel back from 2017 is not true."
There have been attempts to create a single, comprehensive database of songs — like the failed Global Repertoire Database initiative from 2014 — but the deals have been marred by friction over approach and cost, according to Billboard. Another pilot using blockchain launched in May in hopes of making the process more collaborative and democratic.
Still, Howard-Spink says it's too early to identify what will shape the industry going forward.
"It's very normal for people in the music industry to proclaim the next revolution," he says. "I've been reading and writing and teaching about the music business for going on 20 years, and I've heard many of these 'this is all how it's going to be now.' And it's 2018 and I'm doing research on the vinyl resurgence and album bundles with concert tickets."