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In January, HIP LAND MUSIC launched FRIENDSHIP. DAO, an artist-driven Web3 community project that is a pioneering initiative for the Japanese music industry. The profit structure of the music industry is changing, and FRIENDSHIP. DAO aims to bring together all those who support artists and music, creating a community that can lead to multiple collaborations through ongoing musical activities. We talked with Yuto Uchino from The fin., who is active not only in Japan but overseas as well, and Shacho from SOIL & “PIMP” SESSIONS, about FRIENDSHIP. DAO’s potential and ideals.

Jay Kogami: What led you to create FRIENDSHIP. DAO?

Yuto Uchino: I’ve been part of the digital distributor FRIENDSHIP., serving as a curator, since it was first launched. When I was working with my team to develop a broad range of ideas for a DAO, I realized that the FRIENDSHIP.’s activity philosophy had a lot in common with DAOs. FRIENDSHIP. DAO began when our team decided to use a DAO to address problems which couldn’t be solved with Web2.0, and to solve as yet unresolved problems faced by the music market, which has developed along the lines of music streaming. This all happened at the same time that overseas independent artists were starting to generate buzz by releasing their music using NFTs. A growing number of people around me were investing in cryptocurrency, so I was kept constantly abreast of information about Web3. However, even then, I realized that there wasn’t much affinity between NFTs and music.

Kogami: What do you mean?

Yuto Uchino: Most of what people were talking about in relation to NFTs were high value transactions. However, when music was released using NFTs, you didn’t hear about whether it actually reached people; whether they shared it; whether they heard it. These kinds of questions went unanswered.

Conceptually, a DAO is created and operated as a new organization. Unlike existing structures, in which everything is focused on platforms operated by large companies, like streaming services and YouTube, in the DAO, we created a new organization focused on the music itself, connecting different people and pointing to a new future for the music industry. In particular, with FRIENDSHIP.DAO we want to use Web3 technologies to visualize and restructure the human networks that are so hard to see in the industry.

Kogami: What specific music-related problems do you think Web2.0 has been unable to address?

Yuto Uchino: For a lot of indie artists, streaming on streaming services does not translate into actual sales. CDs also sell less, and it’s making it harder to raise money for activities. In the music streaming business, the flow of money has become concentrated and centralized, making it harder for indie artists and DIY artists to raise funds. This centralized distribution of money has weakened the underground and indie scene, and there are fears that the whole framework of new music creation may break down.

Kogami: Shacho, what do you think?

Shacho: We’re targeting both fans in Japan and overseas, and the way people access music overseas is totally different from Japan. Overseas, artists are constantly announcing fresh new songs on Bandcamp, and this has become an established approach. Artists around the world on the frontlines of the jazz scene are releasing new works and achieving strong sales and physical distribution, simultaneously, across national borders. The distribution system is very different in Japan. Looking from the outside at the speed with which things move overseas, it’s very frustrating not to be able to take part in it.

Kogami: Bandcamp’s service was created based on the music framework that was in place before the rise of streaming, so it’s interesting to see that it still draws so many artists and fans.

Shacho: Bandcamp has social media functions, too, so you can see songs that were purchased by famous DJs or by other people whose musical tastes are similar to your own. It fuses the best parts of Web2.0 and traditional media.

Kogami: One of the things you’re trying to do with FRIENDSHIP.DAO is to create sustainable revenue streams for all kinds of artists. What kind of approaches do you think you can use to achieve that?

Yuto Uchino: When talking about generating revenue and compensation, one major problem is that, under Japanese law, you cannot use cryptocurrency for transactions. If this issue was addressed, it would make it easier for Japanese artists popular with overseas audiences and active in overseas music scenes to connect with people outside Japan.

To enable artists to make money on FRIENDSHIP.DAO, we’re envisioning introducing a point system. We’re thinking about setting things up so that when work or collaborations are performed, points are assigned based on people’s actions. We’d like to use cryptocurrency for payments in the future.

Kogami: Who can take part in the DAO?

Yuto Uchino: In its first stage, it’ll be artists that are releasing music through FRIENDSHIP. In the future, we also plan to open this up to foreign artists. Then we’ll expand the scope to all kinds of people working in the music industry. The way we see the DAO as being used is for contributing to communication between people working in the industry, stimulating business. Ultimately, we’d like to make it possible for listeners to participate as well, directly connecting the people who listen to music with the artists that create it.

Kogami: What, specifically, is your first goal? 

Yuto Uchino: We’re not looking at trying to achieve profitability in the DAO’s first stage. Instead, we want to reinforce the elements that serve as communication tools, helping participants broaden their networks. Our goal is to connect talented people, skilled engineers, and people with specialized knowledge, who are buried in the industry’s current structure, by relaying job offers and giving them the right to take part in projects. The decentralized organizational structure of a DAO will change the methods by which people take part in musical activities and projects, and will change how they contribute at a personal level. I think this organizational structure is a great fit for the music market.

Kogami: If you were able to find promoters outside Japan, you’d want to collaborate on projects with them, right?

Yuto Uchino: FRIENDSHIP.DAO would create synergy by visualizing networks of people overseas who can support Japanese artists. We also plan to make it possible to credit them in artists’ works. With FRIENDSHIP.DAO, we’re employing a mechanism to visualize credits by recording them in a blockchain.

Kogami: What hopes do you have for the Web3-native artists and creators that we’re likely to see in the future?

Shacho: As a creator, I want to see them create music with even better sound quality. However, in the music streaming era, the mainstream approach is now to create music with low audio fidelity, optimized for the speakers of mobile devices. I’m very curious to see if Web3 creative activities restore the value placed on audio quality. I’m also interested in how musical experiences and entertainment will be created for the metaverse. Of course, real-life, live music will live on. We can’t allow it to disappear. I’m just worried that, as musical experiences become more divided, such as through VR performances in the metaverse, audio quality might degrade even further.

Yuto Uchino: Future generations of artists won’t just be able to access music around the world, it’ll also become commonplace for them to collaborate with artists throughout the globe. Creators will connect with each other regardless of their countries and where they’re active, so we’ll see new, unprecedented music being made. I’m looking forward to hearing the music created through these collaborations. I also want to get started on these kinds of creative activities myself.

Shacho: I think that Web3 will be a great fit for Japanese artists and bands with a strong overseas focus. Translation technology has also evolved quite a bit, so the language barrier is shrinking. Using DAOs and NFTs and communicating in English from the very start will, I think, turn into a way to connect with the world at large.

–This article by Jay Kogami first appeared on Billboard Japan.