Clayton Blaha is an entrepreneur at the crossroads of entertainment, technology, and sustainability. He is the founder of LA-based management and consulting firm Ferrari Jetpack and the co-founder of OWSLA with multi-platinum Grammy winner Skrillex.
When I first heard Boogie in 2013, he caught my ear for a couple of reasons. He has an identifiable lisp and he rapped lyrics that conveyed genuine vulnerability juxtaposed against his proximity to gang culture in Compton, one of the most rugged cities in the United States and the cradle of civilization in terms of politically charged, brutal, thoughtful, and sometimes scary rap music. This guy was rapping about stray bullets and being passed over by women due to his speech impediment—it struck me. He had also identified a generational fascination with the idea that social media is not only ruling our lives, but that it's dictating the behaviors of people we know and love to their own detriment. He was definitely on to something.
If you have been paying attention, the idea that we are being manipulated by social media and a masochistic magnetism towards our worst impulses is probably not news to you. Russia famously swung the 2016 US election by playing to the fears of Americans and inciting highly shareable and engaging outrage on Facebook (owner of Instagram), and more recently the local military used viral disinformation on the platform to incite genocidal violence in Myanmar. It is also well acknowledged that the Christchurch shooter in New Zealand was radicalized by hateful rhetoric he consumed online—his final words on the Facebook livestream of the massacre were “subscribe to Pewdiepie,” a shoutout to the allegedly antisemitic YouTuber with a massive following.
Digital content by young black people and the data around it is the new oil, and the major labels have managed to pump it out of the internet to astronomical profit.
When I began exploring this terrifying idea within the context of rap music, I began to believe that these massive companies have also facilitated destructive and antisocial behavior on their platforms to the detriment of artists and music at large. The primary beneficiaries are wealthy white men who have their hands in the corporate ongoings of many other institutional industries. Digital content by young black people and the data around it is the new oil, and the major labels have managed to pump it out of the internet to astronomical profit. The bulk of Boogie’s music is about love, hardship, empowerment, and positive social change. The one time we decided to feed the beast is when everything changed. And it wasn't an accident.
Boogie and our team engineered the virality of his breakout hit “Oh My.” We knew that to drive up the price of a major label deal to meet Boogie’s short-term financial needs we would need to give audiences something shareable and sticky, something that shook white kids in the Midwest and inspired engagement. Boogie wrote a jarring song, Jack Wagner shot a starkly energetic video, the YouTube algorithm favored us, and we nearly tripled the advance that he soon received from Interscope Records.
We aren’t special, this happens all the time. On paper a deal like this sounds great, but most of Boogie’s music doesn’t sound like “Oh My” nor does it elicit the riotous, visceral reaction that song does. Most of Boogie’s music is contemplative and beautiful, but we rarely saw YouTube comments echoing that sentiment. He is an anomaly who is versatile and intelligent, but should every artist need to go viral just to pay their most pressing bills?
If one does have the good fortune to go viral, as we did on YouTube, or even have a playlist hit on Spotify or Apple Music, there’s actually no immediate money in the bank to reinvest in touring, merchandise, or studio time.
Before we explore that, I should acknowledge that the music industry is making a sort of comeback. That rosy narrative currently generates hopeful SoundCloud clicks from Ivy League interns in major label offices from Los Angeles to London, but it is important to keep in mind we are still seeing a meager fraction of the money that the recorded music industry was generating in 2001. What’s more, if an artist signs a major deal they’re lucky to see even a small portion of the money flowing through the label after the initial check. If one does have the good fortune to go viral, as we did on YouTube, or even have a playlist hit on Spotify or Apple Music, there’s actually no immediate money in the bank to reinvest in touring, merchandise, or studio time.
We, like hundreds of others, signed that major label deal because Boogie needed the advance to continue to build his career. Virality is not sustainable. No matter the platform, no one gets quickly and directly paid for the content they create, and the services that incentivize the most engagement through addictive attention-hacking and data sales are the biggest culprits. Instagram and the original YouTube are not subscription services, they're advertising platforms. Even on Spotify and Apple Music, attention is the primary commodity that all of these platforms broker by selling it to advertisers. The more time you spend on platform, the more money they make.
But unless someone like Boogie can wait for that revenue to finally make its way back to him after being skimmed by tons of intermediaries like distributors, royalty collection companies, and lawyers, they are left with two options: either sell that attention potential to a major label for a promise of future attention (an advance), or use that attention to sell products and shout-outs for cash. Either way, sensationalism is the best means of being paid in the near-term for people who don't have the luxury of waiting months or even years—the people who, in many cases, historically don’t have the same access to higher education and financial resources as their white counterparts.
the more engagement and attention—or clout as we call it in rap—one is able to leverage online, the more effectively they'll be able to generate revenue tomorrow.
So the more engagement and attention—or clout as we call it in rap—one is able to leverage online, the more effectively they'll be able to generate revenue tomorrow. We know people are inclined to watch car crashes, WorldStar fights, and sports bloopers. The Instagram algorithm knows that you can’t stop clicking on videos of people nodding off on Xanax or those who have tattoos covering their face. It is easy to understand why people like Whoa Vicky or Boonk or Lil Pump are commanding massive checks—that shit gets likes, likes eventually convert to streams or sales, and every major label rap executive knows this. They don’t necessarily care what these people have to do for money after the clout wave crashes on the shores of adulthood.
So how do we close the gap and get people paid for creating great music now and in the long-term instead of leveraging sensationalist attention spikes in the short-term at the expense of their sustained well-being? What if rappers didn’t have to do anything insane to generate attention in order to get a lump sum up front, but could gradually grow a career by speaking and relating to their audiences about shared problems, generating money now and reinvesting in the future? Would music have the potential to lead us to a better society instead of exacerbate its worst tendencies if we paid people as quickly for truth and vulnerability as we do for outrage and virality?
In my mind, the answer lies in a solution that compensates people for the content they create immediately and directly upon viewing or listening, instead of selling attention and the associated data to advertisers. In the world of technology, this idea is being thought of as frictionless micropayments, a concept that many (including myself) believe will be facilitated by blockchain, the underlying technology that gave the world Bitcoin, and the concept stands to upend the way we think about how we transfer value on the internet.
Let’s pay people quickly and directly for their video content and music streams. Sounds simple, right? Well, there are a number of reasons this idea hasn’t materialized just yet, but it begins with metadata, the information that is embedded in a file that tells us who owns the rights to it and where to send the money. Currently, metadata is total mess and useless to many. Ownership is decided by lawyers, and payments are split up by accountants and eventually sent to the rights holders. This can take years, and often the payments are wildly inaccurate. If a file has a misspelled artist name or song title, the payments it generates on current streaming platforms could end up in digital purgatory forever.
In the future I’m describing, this information would be watermarked in the file forever and its creator’s identity, as well as that of everyone who owns a piece of it, will be permanently and inextricably connected to the blockchain. Think of it as a massive Google Drive that anyone can access privately and that no single person owns. Then, every single time a piece of digital content is played the digital money will be split up by what’s called a “smart contract”—essentially a programmed set of instructions—and sent to the bank account of its owners, only differing from a credit card payment in that there are no error-prone humans involved. Then the recipient of that payment can spend the money on whatever they choose, even face tattoos.
Money could flow smoothly around an automated ecosystem of direct value exchange, allowing anyone to express themselves with the myriad digital tools at their disposal and zero concern of being taken advantage of.
Frictionless micropayments also remove much of the difficulty associated with migrating a legacy system of ownership over to the current creative means of reinterpretation and sampling, as well as more traditional sync licensing. Smart contracts could pay people for their intellectual property even if it’s used in another song or piece of video. "Lucid Dreams" is a perfect example, but don’t you think Sting would be less inclined to take all of the money in an agreement up front if he knew that he’d be paid instantly every time it’s played forever and ever? There would be far less incentive to block a sample or a sync license—like one that Boogie lost due to sample clearance issues—because of concerns of who was going to be paid and when. Money could flow smoothly around an automated ecosystem of direct value exchange, allowing anyone to express themselves with the myriad digital tools at their disposal and zero concern of being taken advantage of. Everyone creates and everyone should get paid easily.
So why isn’t this happening yet? As mentioned, a lot of people are making money in the music industry right now, artists just aren’t generally included in the party. Lawyers, accountants, labels, even managers (whoops), and the streaming services themselves all take a piece and benefit from this inefficiency. There are a lot of people between creatives and the money.
Similar to what happened with mp3 compression in the early 2000s, it’s difficult to get a multi-billion dollar industry to stop what it’s doing in order to prevent itself from being disrupted by innovation. In 2015 there was a global initiative to decide how to settle the metadata problem for the catalogs of past music that most labels make all of their money from, but it eventually sputtered due to disagreements about how to solve the problem. DotBC is a newer technology, assisted by AI and machine learning, that is very close to figuring it out. Stem, a distribution company founded in 2015, initially aspired to use blockchain to optimize a payments system with smart contracts and raised millions from some of the smartest people in music and technology, but the ability to execute the thousands of transactions per second needed to facilitate this new system of micropayments for streams still isn’t quite there yet.
it’s difficult to get a multi-billion dollar industry to stop what it’s doing in order to prevent itself from being disrupted by innovation.
The collective Internet and content industry at large needs to decide where this money is actually coming from. In the simplest version of this idea, it would be consumers and listeners who pay fractions of a cent every time they engage with online content. As you read this I imagine you are thinking, “I don’t want to pay for something that is already free,” and I hear you. But online digital content and music actually isn’t free. Someone has to pay the internet bill, right?
Most of the content (and value) on the internet is created by its users who ask for nothing but attention, meanwhile AT&T, Verizon, and Sprint have become multi-billion dollar digital behemoths. Would you pay T-Mobile $150 a month if you couldn’t use your phone to scroll Instagram? We are paying money to use a service that wouldn’t exist if we stopped giving it free content. The technological means to consume digital content (the internet and mobile data) should behave in the market like any other public utility. The electrical company doesn’t just pay for the wires and infrastructure, they actually create the power plant and they create the energy. No one would pay to use just the wires and wall outlets if electricity didn’t come through them. Music is almost exclusively consumed via the internet in 2019—Sprint is the new Tower Records, Verizon is the new Virgin Megastore. The telecommunications companies should pay the people who make their services valuable.
What I hope for and envision is an industry and a society at large that not only places value on actual art, but has the tools and governance structure to reward it with the same excitement they would a Lil Tay Instagram post. With a few taps, we could trustingly give tiny bits of actual money to the people who work hard every day to tell their story and add to our collective culture instead of few small, dopamine-inducing hearts and well-wishes in the comments. I’m working every day to help this become reality, so we are able to support and promote the people that advance our society from the inside out in a time when we need it most, instead of just “living for the likes,” as my favorite rapper from Compton so eloquently put it.