Industry Insights: The Future of Music According to SXSW
The rise of streaming, resurgence of catalog, and rapid onset of NFTs’ popularity are all converging. Music royalty will build bigger and more extravagant palaces but only at the expense of artists that are struggling to gain a platform as it is.
Industry Insights explores the inner workings of the greater music industry, and what they mean for artists and fans alike.
Written by Arundhati Ghosh
Image courtesy of Blockchain Creative Labs in conjunction with SXSW
An adage attributed to economist Theodore Levitt states that “creativity is thinking up new things. Innovation is doing new things.” There’s no shortage of proof of concept here: from media to mathematics, materials to medicine, thinkers who have successfully made the transition to being doers are the ones who make history. The more awe-inspiring the idea, the more helpful its application — the more likely it is that something new will be accepted by society with open arms. With this in consideration, innovation has turned almost synonymous with technological advancement in recent years.
Few events better epitomize this than Austin’s very own SXSW, the conference that claims it “provides an opportunity for the global community of digital creatives to encounter cutting-edge ideas, discover new interests, and network with other professionals who share a similar appetite for forward-focused experiences.” From discussions on upcoming tech in the medical field to talks led by advertising executives on different trends, SXSW panels showcase only the most relevant material.
This year, the conference centered around exactly what one would expect: Non-Fungible Tokens. NFTs — and, by extension, cryptocurrency — occupy every corner of the internet, from Twitter artists to Formula 1 drivers. Popular NFT sources noted this shiny new facet of the conference: in an article aptly titled “How NFTs Stole the Spotlight at SXSW 2022,” nft now writer Langston Thomas lets it be known that “you couldn’t traverse the streets of Austin for more than ten minutes without catching sight of an NFT event or activation of some sort.” Considering the numerous panels on specific new technologies (the metaverse, NFTs, crypto) and their projected impact on music as well as artists themselves giving in to the hype (Dolly Parton’s first SXSW appearance being NFT and crypto related, for one), SXSW 2022 simply further proved the threat the change the contemporary age of technology ushers onto the music industry.
SXSW’s Future of Music displayed the effects that technological advances will likely have on the music industry. “Next-Gen Entertainment: the Metaverse and Music,” “Transforming Big Data into Music Impact,” and “10 Entertainment Industry Trends to Know for 2022” are three presentations that touched on different aspects of the music industry and of new technologies that are making headway in it. In that same vein, all three presentations made it evident that if the music industry continues on the projected trajectory these panelists spoke of, the rich will get richer, and the wanting will be left wanting. It was never about the music. It was always about the money. As it has been, so it shall be.
Rob Jonas, Chief Executive Officer of Luminate, headed the presentation of “10 Entertainment Industry Trends to Know for 2022.” His main points related to the coming direction of the music industry were as follows: catalog vs. current, window wars, the vinyl boom, and, last but not least, hype vs. reality, a concept Jonas heavily related back to NFTs. The resurgence of vinyl as a popular mode of listening to music, alongside the fact that catalog songs — “music released at least three years before the listener pressed play” as explained in a Rolling Stone article on older songs bringing in more revenue that newer additions to people’s playlists — are outpacing more current songs on streaming services, paint a clear picture of nostalgia propelling oldies forward into the future.
Jonas also touched on content windows and their implications on creators and consumers, citing musicians contributing to film soundtracks as an example of what he meant. According to the data Luminate has been gathering, crossover between types of media is becoming more likely to affect audience’s tastes and reactions to certain media products. Finally, his last point centered mostly around the music industry, was about whether the current hype of NFTs will continue, or if it will slowly but surely die out. The Luminate CEO shortly defined NFTs as “digital collectibles,” with an individual NFT being a “financial instrument.” Ultimately, he nudged the audience in the direction of considering NFTs to be a way to monetize fandom that is here to stay, though he did not mention that musical fandoms are already heavily monetized, especially when taking into consideration entertainment industry staples such as tours, merchandise, and streams.
Image courtesy of FLUF World in conjunction with SXSW
Another talk that touched on NFTs was The “Metaverse and Music” panel. It consisted of Adam Arrigo, the CEO and co-founder of the metaverse virtual concert experience that is Wave, and Oana Ruxandra, Chief Digital Officer & EVP of Business Development for the Warner Music Group. Arrigo kicked the panel off by defining the metaverse as a “persistent 3D space” that allows consumers to “be present with other people” despite not being in the same physical space as them. He provided the audience with an example: in November of 2021, Wave collaborated with Justin Bieber to put on a virtual concert experience during the pandemic. Ruxandra claimed it was an avenue for listeners and artists to “connect in a way they weren’t before,” and considering the inability to attend concerts that existed during the heaviest eras of the pandemic, this isn’t necessarily untrue.
What isn’t necessarily true, however, is another concept Arrigo floated during the panel: the idea that the metaverse is the “next evolution of the internet.” Putting on a virtual concert in the same fashion as Justin Bieber, or creating an interactive album experience like Riot Games’ in-house heavy metal band Pentakill, comes with at least one massive, glaring caveat: money.
For artists that may already be struggling to break even, buying and using special suits, motion sensors, greenscreens, multiple cameras, etc. is less than feasible. This setback, coupled with the fact that most artists make a lion’s share of their revenue from touring, means that if virtual reality truly becomes the next step in garnering an audience, your favorite local bands will have to get more creative with how they market themselves. It’s a Catch-22 in the making: without the requisite money, one can’t put on a virtual music experience, but without putting on a virtual music experience, one can’t keep up with the level of financing one’s expected to be at. This same reasoning applies to why it is far more difficult for smaller musicians to commission NFTs from visual artists, and why, in turn, they find marketing NFTs and personal cryptocurrency far less navigable than household names such as Dolly Parton and Eminem do. Arrigo and Ruxandra ultimately discussed a possible upper bound of virtual musical performances, but did not fully address a lower one.
This realization was further bolstered in the presentation on “Transforming Big Data into Music Impact.” Spotify Data Scientist Dr. Joshua D. Hayes and Microsoft Program Manager Komala Prabhu Tirupachur provided an academic perspective on approaching analytical projects in music, noting four main questions they always asked when doing so themselves:
What do we want to solve?
How do we plan for it?
Can we build it?
Should we even build it?
When it comes to facets of the future of music, these four questions are more than applicable at every turn. While industry-altering tech such as virtual reality concerts in the metaverse and artist-circulated NFTs for their fans may be fascinating to study, they have the potential to harm smaller musicians’ prospects in the long run. Luminate established that hyped hot-button items such as NFTs and crypto are likely to continue on an upward trajectory, which lines the pockets of millionaire musicians and shunts bands that play weekly at the Ballroom or Mohawk. In considering what we want to solve within the music industry, it is necessary to recognize that if the answer to that question is the difficulties that come with being a common man in the music world, high-end technological advancements that take more money than most have to put in are not the necessary path ahead.
We have all the ideas, all the tools, all the manpower. Now, it’s down to us consumers to make a decision: What do we want to use all of these to solve? Do NFTs, cryptocurrency, the metaverse, and the like have a place in an already tumultuous industry? If they do, if we can plan for their involvement with music and if we can rebuild the industry around these newer innovations, we must ultimately decide whether we should. The opportunity cost of maintaining a status quo is possible stagnancy, but the alternative is making an already uneven playing field all the less level.
This article was added to Industry Insights after its publication, upon the creation of the Industry Insights series.