Digital music’s new drop culture

“We’ve always had this idea of music being mass-market,” says 3LAU. “It’s always been, ‘we need to get this music to the most amount of people.’ The art world has never been that way. It’s the opposite mindset: Who can afford this really expensive piece of work that I’ve spent hours and hours creating? [Hornby] is an expert at his craft, and indust... See more

To create an aura of artificial scarcity around their music, the likes of 3LAU and RAC create a non-fungible token (NFT) to represent each piece of art. An NFT is a token that — unlike, say, a U.S. dollar bill or a standard cryptocurrency like Bitcoin or Ether — is rare, singularly unique, not mutually interchangeable and indivisible into smaller d... See more

This decision-making around how to price digitally scarce music and art illuminated to me that in a commodified streaming economy, most musicians don’t have the ability to set the price of their own creative output in the first place, and may be leaving money on the table in the process.

In all of these cases, the “drop” is valuable because it is artificially scarce; fewer people would want it if everyone could have it.

What excites me the most about these kinds of projects is that they combine multiple kinds of cutting-edge business models and technologies — digital scarcity, drop culture, blockchain and cryptocurrency — into a direct-to-fan transaction that actually makes real money for the artists involved.

3LAU turns to both the streetwear and fine-art industries for inspiration, because both of those worlds invert the mainstream music-industry model of low-margin ubiquity in favor of high-margin scarcity.

Yet there’s a fundamental tension between drop culture and digital music itself. As I've written about in the past, artificial scarcity could not be more antithetical to how the streaming economy works today, because we expect digital music to be as close to free and ubiquitous as possible — i.e. the opposite of scarce.

If you take nothing else away from this article, remember this idea: In a capitalist economy, artificial scarcity creates the conditions for discovering culture’s true market value.