Hello. This is the first talk I’ve ever given with slides, so we’ll see how that goes. I was asked today to speak about web lit­er­a­cy. As one of the exec­u­tive direc­tors of CASH Music, a non­prof­it who’s focused on empow­er­ing musi­cians on the web with open source tools and edu­ca­tion, this is some­thing that I work on and think about a lot. 

I think often­times when we think about web lit­er­a­cy we think about things like skills—learning skills, build­ing on the web, under­stand­ing how the Internet works. All of which is very impor­tant but doesn’t speak to why the web works like it does. I think it’s deeply impor­tant that we add a work­ing knowl­edge of busi­ness and busi­ness mod­els to what it means to be web-literate. The sites that we use, there’s big mon­ey behind them, and there’s even big­ger prof­it motives in front of them. We need to be able to think crit­i­cal­ly about where we build our com­mu­ni­ties, about what they’re doing with our data, and about when—not if—they mon­e­tize us. 

A young woman smiling at the camera while operating a t-shirt printing machine. Text: "Indie labels created their own world because the one majors built was shit."

So, I apol­o­gize for the swear­ing. I’ll try not to do it very much. It nat­u­ral­ly just hap­pens. But I came into the music indus­try as a musi­cian about twenty-five years ago. I start­ed tat an inde­pen­dent record label based in Olympia, Washington in the 90s. That’s impor­tant because we were doing some­thing that we believed was very polit­i­cal. We were try­ing to build busi­ness mod­els out­side of the cor­po­rate struc­ture, out­side of the major label world. We believed it was impor­tant to put artists first, to make artists our part­ners in order to ensure that oth­er voic­es were heard, oth­er than just what the cor­po­rate struc­ture want­ed to hear. So I came into this indus­try think­ing about busi­ness mod­els polit­i­cal­ly and I’ve nev­er stopped.

Disruption is real, but it doesn't always bring change for the better.

It also means that I had a front-row seat to the dawn of the dig­i­tal era, and saw all the destruc­tion that ensued. It affects artists’ lives, liveli­hoods, and it still does. I have seen lit­er­al­ly hun­dreds if not thou­sands of music tech star­tups come and go in that time peri­od. They have all told me they were the future of music. I have watched as freemi­um mod­els have become pre­mi­um ones. And I’ve seen artists build com­mu­ni­ties on closed plat­forms, only to watch those plat­forms implode, and then watched them go on to the next closed plat­form.

Who controls your relationships?

If any­one here uses a Facebook page at all for any sort of promotion—events pro­mo­tion, project promotion—you know that you don’t have access to your audi­ence. They con­trol that rela­tion­ship, not you.

Artists innovate. Artists create. It's what they do, even in business.

I’ve also seen artists embrace the open web and try new busi­ness mod­els. They are inno­va­tors at the core of what they do, and when they’re not scared of the Internet, kind of bril­liant things can hap­pen.

So, one of the founders of CASH Music is an artist named Kristin Hersh. She was in a band in the 90s called Throwing Muses and she built up a very strong core audi­ence of sup­port­ers. She want­ed to fig­ure out a way to then let them sup­port her direct­ly. So nine years ago she built the very first sub­scrip­tion ser­vice. It was the first tool that CASH built, it’s how she makes her liv­ing to this day. She is able to release records, to own her own copy­right, to go on tour, all under her own con­trol. Which is mas­sive­ly inspir­ing.

She was also the first artist to sell MP3s direct­ly. We’ve also worked with folks like Run the Jewels, who have given away their first two records for free to their fans. They’ve become one of the most influ­en­tial rap groups in the world for a vari­ety of rea­sons, but I think it’s real­ly impor­tant to look at how they dis­trib­ut­ed their music to their fans. It shows a lev­el of respect kind of like none oth­er. You know, you trust that your fans are there for you. And they are. All they do is ask for an email address in exchange for a down­load of a free record. They do not exploit that email list. They only use it when they’re going on tour or they have a new album or they have new mer­chan­dise. And their fans are very hap­py to sup­port them.

Musicians are leaders.

Musicians are lead­ers. If you think of any cul­tur­al move­ment through­out his­to­ry, they’re sort of at the fore­front. Think about the Civil Rights Movement. Think about the anti-war move­ment. Third-wave fem­i­nism. Second-wave fem­i­nism, frankly. There are always a song and a musi­cian, and music is at the core of it. Think of Bob Dylan’s Masters of War” or Sam Cooke’s A Change is Gonna Come” or Public Enemy’s Fight the Power.”

Musicians are also lead­ers online. They dri­ve a lot of traf­fic. If you look at the top-followed accounts on Instagram and Twitter, 75% of them are musi­cians. Musicians and music got us to tor­rent. Torrents are ter­ri­ble. It’s a ter­ri­ble UX. And peo­ple want­ed music so bad­ly they learned how to do this.

The open web is closing.

So the Internet, this place of immense pos­si­bil­i­ty and free­dom is clos­ing. We are see­ing users go for the easiest-to-use ser­vices with­out a sec­ond thought to their pri­va­cy, their data, or the long-term effects of where they’re build­ing their com­mu­ni­ties online—or their busi­ness­es online. 

Not all art/business scales.

VC fund­ing has led to an obses­sion with scale. But here’s the thing: not all busi­ness scales, not all art scales. Scale is a shit­ty mea­sure of impact. Scale means that every­thing has to get big­ger and big­ger and big­ger and big­ger and big­ger. And if we demand that of the web, we’re going to miss out on small changes that actu­al­ly change lives.

Corporate consolidation is our "one ring to rule them all."

Sorry, I didn’t make the slides so they’re crack­ing me up. So we see the­se com­pa­nies, the­se star­tups, they began in this giant hole. There’s this deficit that they have to make up. And…so often, they don’t. We see over and over again—either by acqui­si­tion or implosion—the largest cor­po­ra­tions in the world tak­ing con­trol of the­se new ideas. I’ve been work­ing on this chart, actu­al­ly— And I wish it was done right now. But it’s a very easy way to see may­be the top twen­ty music tech com­pa­nies, and then where they’ve been siloed into. You know, Topspin went to Apple, it’s BandPage went to Spotify and then to YouTube. It’s just watch­ing every­thing go into the­se very small, con­sol­i­dat­ed silos.

The anatomy of a unicorn. Revenue, profit, and exit.

So we’re going to talk about Spotify, and I don’t want to talk about whether or not stream­ing is prof­itable for artists. That’s a total­ly dif­fer­ent con­ver­sa­tion. What we need to talk about is is Spotify prof­itable at all as a busi­ness? They have post­ed exact­ly one prof­itable quar­ter, in one ter­ri­to­ry, ever. It was 2014 in the UK. They recent­ly took on anoth­er bil­lion dol­lars in debt, mean­ing that there are now two bil­lions dol­lars in debt. And they are talk­ing about acquir­ing anoth­er in-debt music tech ser­vice, SoundCloud.

So let’s think about that for a sec­ond. We know that Spotify has to pay out 70% of all income to right­sh­old­ers. So that’s record labels, that’s dis­trib­u­tors, occa­sion­al­ly that’s artists directly—not very often with Spotify. But 70% just goes out.

We also know that in order to get a licens­ing deal in the United States they were asked to give equi­ty to the major labels. That is an undis­closed amount; we don’t know how much it is. But it’s some­thing the major labels take in and they do not have to share with their artists.

So we’re look­ing at Spotify hav­ing to pay back $2 bil­lion in debt on less than 30% of all of their income, as well as pay for all of their over­head. Doesn’t real­ly seem like­ly. We’ve seen Rdio lose in this space. There are rumors that TIDAL is going to be acquired by Apple. Next week that could be Google. You nev­er know.

Music is more than just a loss leader.

But I think what we’re see­ing is that stream­ing is a busi­ness that’s only going to work for peo­ple that are try­ing to sell you oth­er things. For peo­ple that are try­ing to sell you phones or try­ing to mine all of your data. And that’s a prob­lem. Music is too impor­tant for that. I think when you put so much cor­po­rate con­trol into what we’re lis­ten­ing to, you’re going to miss out on voic­es. You’re going to miss out on real­ly impor­tant voic­es. If you don’t think cor­po­rate struc­tures are going to cen­sor what we lis­ten to, and what we dis­cov­er, and how we find things, then you’re not pay­ing atten­tion. That is what will hap­pen.

Music connects us.

So, music con­nects us in ways that almost noth­ing else does. It’s the uni­ver­sal lan­guage. It con­nects peo­ple across phys­i­cal bar­ri­ers, soci­etal ones, men­tal ones. It is the way that we can tru­ly find empa­thy with one anoth­er.

Music has power.

It also has pow­er. It gives voice to the voice­less. It gives hope to the hope­less. And if we do not have a vari­ety of voic­es out there being lis­tened to and being heard, then we’re all miss­ing out.

Web literacy also means examining power structures.

So, I know we’re all over­whelmed. We’re all over­sat­u­rat­ed. We’re all over­worked. And it’s hard to real­ly think about the­se things. But we must. We’re all inun­dat­ed with click­bait, and with this never-ending elec­tion cycle, and with social media. But it is vital that we think about where we’re build­ing our com­mu­ni­ties online, how we’re build­ing them, and what the long-term effects are.

We talk about the open web like it’s a code prob­lem. It’s a cul­ture prob­lem. If we had artists embrac­ing the open web, under­stand­ing what it means, talk­ing to their fans about it, we could real­ly see big changes. We need cul­tur­al lead­ers to con­tin­ue to lead us on this path to the open web.


Discussion

Sarah Allen: Okay, who has a question for Maggie? I'm looking out at you.

Vail: None.

Allen: Nobody has a question for Maggie? Let me jump in, then, and ask you a question. So we were talking just before about what this means for the music industry as a whole. What do you see happening in the next couple of years, etc., from your vantage point?

Vail: That is a very good question. I see people getting less and less scared of the web. Which is something that needs to happen. I also see artists getting more and more control of their careers. There's no reason why anyone should ever sign a contract in perpetuity ever again. You have control and power. And while I'm not going to say that labels are a bad thing—I worked at one for seventeen years; I can see that they have real power. But understanding what that relationship is, how those contracts look, and ultimately keeping your copyright and the rights to your own art are vital.

Allen: Another optimistic thought. Oh, we do have a question in front.

Audience 1: Hello. You didn't talk so much about what CASH Music does. I know a little bit about your model. Do you think it will be able to scale up to an extent that it can make a difference to this problem you describe?

Vail: Yes, I do. So, I can give a brief overview of CASH. We're a nonprofit, we build open source digital tools—so we're everything from a shopping cart to subscription service to tour date management. Kind of anything that an artist would need to connect directly with their fans. We have a hosted version and a distributed version, but what we really try to do is tell artists to make their web site the central focal point for their interactions. Which sounds crazy but it's true.

And then we pair that with education. So we've been doing education within the platform with those tools, but recently just launched a publication called Watt that is dedicated to talking about the economic and health and technology issues that face artists. So we've done a lot of how-tos just explaining copyright and trademark, why you need to set up your your band as a business—that sort of thing. But we've also had a lot of first-person artist stories about things that have worked for them or not worked for them. And we're moving into research and case studies as well.

But yeah, I mean the thing about CASH is we don't actually need to scale. I know that sounds crazy but it's… We're three and a half people. We've been around for nearly ten years. And we've built hundreds of projects directly with artists to make sure that the tools work for them. That is one of the things, and one of the problems I see with technology, is that so often companies start up and think they have some kind of answer to a problem that doesn't exist. And we do this flipside of that. We're building solutions to problems that are there.

Allen: Right, let's thank Maggie.

Further Reference

MozFest 2016 web site


Help Support Open Transcripts

If you found this useful or interesting, please consider supporting the project monthly at Patreon or once via Square Cash, or even just sharing the link. Thanks.