Music Label 3.0
Phlote DAO
January 29th, 2022

Phlote (pronounced "float") is a MUSIC CURATION PROTOCOL AND LABEL. We’ve built technology that allows us to scale our ability to identify, invest in, and amplify talented emerging artists alongside our network of independent labels, creator focused blockchain protocols, and early fans.

Our process for finding music relies on a passionate community of music lovers who select which songs we release using a process that’s open and transparent. We offer artists a straightforward deal structure that’s available to any artist and bypasses the power dynamics, politics, and barriers of the traditional music industry.

To unlock the power of the internet for artists, we’re formed to allow anyone with an internet connection and crypto wallet to help discover and invest in the next generation of stars. 

We love music and the artists who create it. Our mission is to provide a path to creative freedom for artists by helping them maximize the visibility and value of their work.

The problem is, nearly all artists rely on streaming revenue as their primary means of income. Without skills, resources, or means to tour or make high quality merch, most artists must make ends meet on $.0003 per stream, a challenge that’s nearly impossible to overcome.

To put things into perspective, a recording artist must cut through Spotify’s 80,000 daily uploads and generate one million streams to earn enough money to pay one month’s rent. Artists must first gain visibility and then reach scale to have any chance to make a living as a musician.

This is a problem faced by millions of independent creators globally, regardless of their level of talent.

Imagine if musicians were fairly compensated for the value they bring to billions of listeners?

Fans are not immune.

Early fans break artists across social media every day, but have no way to be compensated for the work they do. The most passionate fans helps elevate emerging artist out of obscurity and onto the radar of editorial outlets and eventually big labels. Think about the DJ, who spends much of her time finding obscure music to introduce to an audience, effectively helping to break new music. There’s tremendous value early tastemakers deliver to the music ecosystem, although there has been no way for them to capture it. Music labels are the only parties positioned to profit from discovery and rely on the signal generated by fans as their A&R function.

Just like artists, fans are not getting paid for the value they create!

What if we built a system that allowed artists and fans to get compensated fairly?

All of this is possible with blockchain technology and non-fungible tokens (NFTs) - digital deeds that give any piece of digital content scarcity on the internet. The emergence of NFTs has created a global market for music that’s liquid, expanding, and favors up and coming artists. Now there’s a way to design skin-in-the-game incentives that allow artists to get paid a non-commoditized price for their work and for fans to profit from discovering new artists and helping them break.

In the old world, labels provided the capital and distribution. Those resources can now be offered to artists, in part, by their super fans. Decentralized labels can enable this by using two components:

  1. Decentralized Curation Protocol (voting)
  2. Decentralized Marketplace (monetization)
  3. Distribution (music sharing)

Decentralized Curation - At the foundation of Phlote is a curation protocol that rewards curators who are able to identify good music as voted on peer-to-peer.

Our music curation process relies on a global community of music lovers who decide the music we sell as NFTs in exchange for a share of proceeds from NFT sales. The curation engine capitalizes on the public nature of blockchains to create a system that’s 100% transparent, permissionless and globally accessible to anyone with an internet connection and crypto wallet to participate in.

Decentralized Marketplace - Breaking new artists now requires finding hundreds of fans versus millions and is likely to happen on marketplaces as much as it happens on streaming platforms. Number of transactions is the new follower count.

For a decentralized label, the marketplace serves two functions. The marketplace is how the community monetizes it’s taste in music and enables artists to identify their core fans.

By connecting our curation protocol to Zora’s decentralized marketplace protocol, we’ve created a pathway for any artist to mint music on the Ethereum blockchain without the restriction of gas fees. The bridge will allow for curation on to automatically launch NFT auctions on Zora, protocol-to-protocol. Phlote operates a custom contract that directs funds automatically to curators and artists. The DAO’s share of the sales proceeds is recirculated to the DAO treasury and used to fund fees for future artists.

Distribution (music sharing). Once an album is upvoted through the curation protocol, and sold on Zora, the next step is to amplify the artist and music. Today, the best interest of the artists and early supporters to look to traditional distribution platforms as the best place to reach a mass audience because that’s where they exist. YouTube and streaming platforms are utilized to serve as marketing for digital assets that exist on the blockchain. A wholly owned terrestrial radio station placed as distribution on top of a label would be powerful. Trad radio is a space that’s undervalued to new media/social media platforms, but for music continues to hold high value and cultural significance.

Music social media is an interesting way to conceptualize what decentralized distribution could look like that takes advantage of music ownership as status, music collection as connective tissue, and the power of human recommendations over algorithms. Imagine a social music network where each user’s profile is a playlist.

We foresee a future where all next gen media networks are designed to be powered by the human recommendations of their community using the components discussed above. Using blockchain technology to combine community curation, ownership, distribution unlocks the global power of the internet for artists and enables a new class of participants to create, curate, and invest in media and IP for the first time ever.

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