#7 - Scales and arpeggios 🌞

LA: 🌅 6:48 AM PST | ☀️ High of 77° | 🌇 6:36 PM PST

NYC: 🌅 6:54 AM EST | 🌧️ High of 60° | 🌇 6:36 PM EST

Welcome to our weekly roundup of happenings in the music industry. Here's what we have queued up this week:

1. 🎹 Song recs based on what we're listening to.

2. 🎧 Arpeggi Labs is our Sunlighter Spotlight of the week.

3. 📈 Data from the Recording Industry Association of America (RIAA).

4. 💿 Industry passes to the Super Bowl LVII halftime show.

5. 🎡 Austin City Limits and some tour announcements.

Songs we're currently listening to 🎹 

From the Vault 🔙

Donya's Pick

Chris's Pick

Sunlighter Spotlight: Arpeggi Labs 🎧

What is a Digital Audio Workstation?

Before we introduce you to Arpeggi Labs, let’s break down what a digital audio workstation (DAW) is and how it is used within the music industry. A digital audio workstation is a software platform that allows users to produce music digitally on their computer. Because computers have different operating systems, there are nuances among the numerous DAWs available on the market today, but most DAWs provide the necessary functionality for users to take a song from early production to mastering. It’s the backbone of the digital music production stack, and when combined with other necessary hardware such as a MIDI keyboard, audio interface, microphone, and studio headphones, you get the whole enchilada. If you’re interested in learning more about DAWs and the popular options within the retail market today, you can refer to this Masterclass article.

What's special about Arpeggi Labs?

While traditional music producers, audio engineers, and mixing engineers may use popular traditional DAWs like Ableton, Avid Pro Tools, Fruity Loops (FL Studio), or Logic, Arpeggi Labs is trailblazing its own path by utilizing blockchain technology to create a collaborative Web3 version of the platform. Their DAW can be accessed in-browser, allowing users to login and connect their crypto wallet from their desktop to instantly begin creating music through the Arpeggi Studio platform. As users compose their own music, they have the ability to store their song on the blockchain by “minting” it as an NFT. Arpeggi has a proprietary way of serializing the composition data to keep storage costs low (traditionally very high on the blockchain) and allowing for the song to be rendered in-browser! The entire application would likely be unscalable and financially unsustainable without this technology.

Audio Relationship Protocol and the Arpeggi CC0 Sample Library

Unlike legacy DAWs, Arpeggi Labs’ ultimate goal is to better align the use of NFT technology between creator and collector interests. Here’s how they’re doing it:

1. Aggregating all user-generated compositions into an on-chain audio relationship protocol, which simultaneously publishes the composition into a library of music samples known as the Arpeggi CC0 Sample Library (ASCL).

2. CC0 or better known as Creative Commons Zero (a hotly debated topic within NFT circles) is primarily utilized as a base layer of creative content that accrues more value as others in the public domain utilize the content. So as the Arpeggi CC0 Sample Library grows with your collection of composed music, if other users in the future want to access your samples within the ASCL (ex: to create a remix), those users will be able to utilize your sounds and simultaneously provide attribution to your work.

3. As a creator, you can track usage of all the sounds that you’ve created on the platform (via blockchain technology). In the not so distant future, royalty payments will be integrated so you may even receive monetary benefit for creating compositions that are used by the public.

This is a classic example of strong network effects and an ecosystem differentiator that Web2 legacy DAWs can’t take advantage of.

What’s Next?

Arpeggi Labs continues to improve the functionality of Arpeggi Studio v2 (recently the ability to upload samples), and we expect an accelerated pace of new releases after their team recently announced a seed raise of $5.1 million from lead investor a16z. As with any other Web3 native application, check out their docs or join their social channels to learn more.

Data 📈

RIAA Mid-Year Revenue: Last Wednesday, RIAA published their mid-year 2022 music revenue report. Here are our main takeaways from the statistics:

1. Total recorded music revenue within the U.S. market rose 9% to $7.7 billion in estimated retail value and 8% to $4.9 billion in wholesale value.

   1. What’s the difference between retail vs. wholesale?

      1. Retail revenue - the amount a consumer might pay at a recommended or estimated list price for access to a song that is inclusive of retailers, digital service providers, and other third-parties, not just the music creator.

      2. Wholesale revenue - the estimated amount of revenue that goes directly to music labels from sales and listening. However, the calculation of this metric is a bit obscure because it isn’t always attributed to a consumer making a payment and it excludes any revenue captured by third-parties delivering the music service.

2. Streaming revenues have increased from $5.9 billion to $6.5 billion between H1 2021 and H1 2022.

3. Paid music subscriptions have increased from 82 million subscribers to 90 million subscribers for the first half of the year, year-over-year.

4. Permanent digital download revenue continues to decline, showing multi-year decreases of $23 million between H1 2020 to H1 2021 and $61 million between H1 2021 to H1 2022.

Physical product revenue continues to increase, primarily driven by vinyl record sales. Revenue from vinyl albums grew 22% from H1 2021 to $570 million, accounting for 73% of the total physical product market. The next largest contributor is CDs, which comes in at ~26% of the physical product market.

Industry Updates 💿

• MoviePass but make it Music: In case you missed it, Live Nation dropped their “Club Pass” a couple of weeks ago, which allows any passholder access to any Live Nation-produced concerts between October through December 2022 for a fee of $59 or $79 at participating venues.

• Rihanna’s Return: Last Sunday, Rihanna, now the wealthiest female musician in the world, was announced as the headliner of the Super Bowl LVII Apple Music halftime show on February 12, 2023.

• Avicii Masters: Swedish entertainment company, Pophouse Entertainment, has acquired 75% of Avicii’s masters and publishing catalog, while Tim Bergling’s family will continue to own a 25% minority stake.

• Planet Hip-Hop: Four months ago, Spotify became the first music streaming service to have a virtual presence in a gaming platform. Last week, they doubled down on growing their presence within Roblox, launching their second digital music destination, Planet Hip-Hop.

• Lyte Expands: United States ticketing company, Lyte, has acquired the assets of struggling UK ticketing company Festicket. Lyte views this opportunistic acquisition as a way to kickstart international expansion.

Festivals & Tour Announcements 🎡

Since Sunlighter’s roots are from Austin, we’re covering Austin City Limits this week. Expect to be educated.

You’ve probably heard of Austin City Limits, but its rich history is often the untold story. Austin City Limits, better known colloquially as ACL, was originally known for their weekly music performance TV program on PBS. In fact, ACL is still the longest running music program in TV history, and over the years, the show has become a sphere of influence that has helped evolve the music industry. The show’s pilot was in 1974 and starred Willie Nelson, who was mostly unknown at the time (unreal). During the 48 year span from pilot until now, ACL has become one of most iconic music institutions in the country, ultimately spawning a live show venue and a festival attended by approximately half a million people each year.

ACL wasn’t always two weekends. From its inaugural year of 2002 until 2012, it was always one weekend, until the secret spilled over and the yearly influx of ACL attendees grew too large for the city. From that point forward, the city council decided to expand the festival to two weekends, creating a huge economic opportunity for Austin. Last year’s festival provided an eye-popping $369 million impact on the local Austin economy.

So what can you do at ACL? Glad you asked. Here’s a short-list:

• ACL Night Shows: The best-kept secret, check it here. Y-axis is the venue, X-axis is the date.

• Getting to the Show: Uber down or take the Metro to Barton Springs, then work your way to the back entrance!

• ACL Eats: You can’t go wrong with The Mighty Cone, East Side King, or Chi’lantro (yum).

• Austin Kiddie Limits: If you have kids and they’re 8 years old or under, they get in free!

• Merch: Get there early, the lines are always long!

• Sponsor Activations: We suggest the American Express Experience, T-Mobile Club Magenta, The Hulu Motel, and Tito’s Stardust Experience.

• The Craft Beer Hall: Want to take a break? Grab a beer and watch some football while recharging your batteries.

• Get Front Row: Last but not least, make your schedule and watch your favorite artists!

Tour Announcements 🤘

• Santigold canceled the North American portion of her Holified Tour noting that the music industry has become unsustainable and uninterested in the welfare of artists.

• Dominic Fike announced this week that his Out of Order Tour will kick off on November 6, 2022 in Seattle.

• Jason Isbell and his new band, the 400 Unit, are hitting the road next January.

• Fitz and the Tantrums are dropping their new album on November 11, 2022 and are expected to support their album with a tour next year.

• Big Thief will be on tour late January of 2023 and until March. Catch them while you can.

• Although, a month late (sorry), Florida Georgia Line played their last show together as a duo on August 31st. Both Tyler and Brian will be pursuing solo careers.

Wrap Up 👏

We're closing the newsletter this week with a line that is rooted in Israeli biblical royalty, but also gives a hat tip to the original Gs spinning yo' block. Rest in Peace, Coolio.

Lyrical Genius ✍️

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See ya next Sunday 😎

Chris and Donya