Listen to Your Heart

Music Adventures in the Cloud

By Chris Lin

Music is a form of communication with the ability to transcend language and life. It is the language of the soul. People across the world worship their Creator through music. It is the most quintessential form of expression in life. Everywhere we go, music flows, just like water.

The Origin of KKBOX

17 years ago, I started KKBOX, one of the earliest (if not the first) legal music streaming services in the world. My idea was simple but perhaps too progressive at that time: Buying and downloading music files, transferring them to your listening devices (e.g, iPod, MP3 players, laptops, etc.) through wired sideloading was going to be obsolete as wireless connectivity matured.

In 2003, I saw a world where devices would one day be connected by cloud Internet.To me, downloading and copying files was like fetching water from an underground well and carrying it 15 miles home on foot. While there are still rural areas in the world where people still have to travel miles to fetch water to sustain daily lives, most of the modern world now enjoys the convenience of running water from faucets. This was analogous to how I imagined the proliferation of music should be. More importantly, I wanted to find a way for it to be done legally so musicians could thrive in the Digital Age.

The obvious solution to me was to build a cloud depository full of music and run a subscription based streaming service. It was an obvious and easy decision to make and in retrospect, a daring one because the implementation of this idea and all the negotiations with music labels and copyright owners was far from easy. I spent a good part of a decade in courtrooms and boardrooms trying to prove the case for connecting people and music through the Internet. In the early days, I was that crazy bozo trying to convince the music industry in Taiwan that all was not lost from the decline of physical music sales.

Disruptive innovation often appears illogical in the beginning because the paradigm shift occurs in the fact that the old logic no longer applies. It sometimes appears rudimentary but as adoption increases, new business models will sprout. Today, digital music streaming makes up the majority of recorded music revenue. Music streaming as a format for music consumption was possible because of Internet connectivity and the music industry has beaten the gloom and doom of the era of digital music piracy.

Today, KKBOX is the market leader in my home country of Taiwan, the birthplace of modern Mandopop music, and one of the leading music streaming services in Asia. We are not the biggest in the world but I genuinely think we still provide the best and most innovative service among our peers. I like to believe I made a tiny dent in the music universe but my adventure is far from over.

Blockchain and the Age of Tokenization

Fast forward 17 years, KKBOX Group is now one of Asia’s leading media technology companies. We have expanded our scope of business from audio and video to powering media businesses in the region. We even took a curious detour into empowering music entrepreneurism through a small fund and building cloud services for independent musicians. This ecosystem called theFARM is now Taiwan’s biggest indie music label network.

However, let me be very clear, I am not blind to the notion that the unit price of music has shrunk dramatically from two decades ago. Almost 20 years ago, Steve Jobs (may he rest in peace) decided the price of a single would be 99 cents and I guess helped bring that price down lower so everyone could have access to millions of songs affordably. While I sometimes feel a little bit of guilt, I find comfort in knowing musicians are getting paid again but I have never given up on searching for the next format of music.

In 2018, we started looking into this issue at the Ideation Lab at KKBOX Group. We quickly identified blockchain technology would be the next big thing for music. From close interaction with blockchain evangelists, we realized that this technology was much more than cryptocurrencies. This new technology allowed for the provenance of digital assets. This made us think deeper — Digital music streaming was my obvious solution to illegal file copying in the early 2000s and blockchain technology seemed to hold the promise of solving the latter.

Simply put, if people on a trustless distributed network are willing to trade economically measurable digital tokens, these tokens become real assets. For over a century, people have traded paper cards with their favorite athletes, artists and animation characters printed. But what gives a piece of paper that economic value? The answer is probably not the printed image itself. It is more likely the collective sentiment the image represents. With an authority to provide authentication, this “paper card” now has real perceived value.

With blockchain technology, we can now create a new class of digital assets that encapsulates “collective sentiment” and “authenticity” thus making it tradable online. Like my earlier analogy of running water and music streaming, this was obvious to us three years ago when we started OURSONG, initially as a social experiment. We tested this concept with selected independent artists and issued limited-edition cryptographic tokens visualized as virtual cards. We wanted to validate if music fans would pay for these tokens and be willing to trade them amongst each other. The results were encouraging. Through this experiment, we not only validated our hypothesis but we also uncovered insights which led us to believe that blockchain technology and cryptographic tokens are not hype and will eventually become an everyday commodity that will impact music lifestyle for both artists and fans. Nevertheless, when we tried to bring it to a larger scale, we were yet again deemed “too progressive” and “too dreamy”. Again, not unusual for me.

Beyond the NFT Hype

We were certainly not the only company looking into this area. There were bright minds and plenty of teams all over the world waiting for the next tide to come in. Then the tide came. I have no idea what triggered the recent NFT hype but I am quite happy that we no longer need to spend hours explaining or convincing music artists to look into cryptographic tokens, more specifically, Non-Fungible Tokens (NFT). Instead, we actually have to tell music artists to treat and utilize NFTs in the right way for it to be beneficial to their music careers. OURSONG is certainly not the only company in this space but I am bold enough to say that we are the earliest and have spent years building the best marketplace focused on creating value for music artists and lovers. There is going to be a sea of crypto-art NFTs but we want to build an online service that is optimized for music lovers and culture.

If you are a music artist, here are some tips about NFTs if you are not sure what your strategy is yet:

  • NFTs are NOT only for superstars and established music artists.
  • NFT is a new medium of content experiences and creative expression for all music artists at any stage in their career.
  • Use NFTs to induct real fans from followers and let them come forward to form a special connection with you. Look at NFTs as a new way to invite a select set of your audiences, large or small, to establish an exclusive emotional connection with you in a new dimension. These are the people who really support you. You can call them super fans. Be good to them and they will be to you.
  • We understand large amounts of stream counts, followers, and likes are important but you also want to identify the 1% of your true supporters who are ready to become your evangelists or your army.
  • NFTs can be your one-time PR hype but they are capable of much more. It is key to not think of NFTs as a means to fulfill the vanity of super wealthy crypto-whales. Music artists need to find out how to use NFT as a new medium to engage and create mutual-benefits for their real fans.
  • Use NFTs as a medium to give these real fans “co-ownership” of your creations. There are many ways that you can use NFTs such as minting limited edition “digital vinyl”, encapsulating memorable moments, unreleased content and rare artefacts, granting access privilege and much more. In the future, you can even let fans buy shares in your creations, sharing royalties with them. They benefit from the upside of promoting your creations.

Please consider NFTs as a new innovative way of encapsulating creativity, sentiments and moments in your musical journey, turning them into tradable digital assets that are affordable to fans. Make sure they are issued at a balanced amount versus price. You do not want to make your NFTs too expensive and scarce for fear you will scare your true fans away. Do not exploit them. For too long, Big Tech has exploited content for capitalistic gains and this is your chance to take back that ownership and upside. Design a strategy that will allow you to keep churning out NFTs at the right amounts, at the right time, throughout your career and even after you retire. If you get into the right habit of doing this right, you will be on the right side of innovation and possibly, history.

Unlocking the Unrealized Value of Music

We can all agree that music has an intangible impact on society which cannot just be measured by pure economic value. Mainstream understanding of economic value in the music industry comes from record sales, live performance tickets, branded collaborations and sale of merchandise. But now, we are able to tap into the hidden economic value of music’s collective sentiments. This is incredible. These sentiments are like hidden underground “oil wells” we have not been able to reach and draw from ever in the Digital Age till now.

With NFTs, all things are possible for music, as long as we do it in the right way. The recent hype of super high value NFTs is not necessarily a bad thing. It is merely the beginning of a new era in music economics. This current craze is like the foam on an ice cold beer on the first day at the start of a brand new Summer in music history.

I have dedicated my entire life to discovery, learning and invention with the hopes that I can keep finding new ways of using emerging technology to connect people. I believe that when like-minded people come together, they change the world, they move mountains and they shift paradigms, parting the clouds and bringing down the endless rays of sunlight. The next curve is here, let’s jump it together.

Listen to your heart,

Chris

Chairman and CEO, KKBOX Group / Co-founding Curator, OURSONG

NFT For The People