Down Arrow Button Icon

If you’re a music fan of a certain age, you’ll remember the night that tech entrepreneur Shawn Fanning trolled Metallica on national TV by wearing the band’s T-shirt onstage at the MTV Video Music Awards. The stunt was a clever diss to the band, which was trying to sue Fanning’s file-sharing platform Napster out of existence, but also a seminal moment in music history that symbolized the beginning of the end of the industry’s longtime business model that revolved around selling records and CDs.

Napster would become little more than a footnote in that broader story as the platform was sold and resold to various private equity players, while the likes of Pandora, Spotify, and Apple would go on to popularize the streaming model we know today. But as of this year, Napster has a new CEO who has a plan to make the service relevant again—and it’s not a bad one.

I spoke with the CEO, Jon Vlassopulos, at an event hosted by VC Michael Arrington this week and came away intrigued by his plan. Vlassopulos previously ran music operations at the giant online world Roblox and told me he believes that the business paradigm for music is going to shift once again—away from charging for access to a giant catalog of songs and toward a platform model where fans will buy tunes, merchandise, and tickets within a Roblox-like environment. He claimed that “verch” (virtual merchandise) will be a huge part of this model.

Vlassopulos said Napster’s plans will include a crypto component, which is unsurprising since the platform’s new owners include Web3 player Algorand. I observed that other crypto-based attempts to disrupt the music industry—notably the platform Royalty, which uses NFTs to give fans part ownership of artists’ songs—have failed to catch on. Vlassopulos said this is because such efforts are a legal minefield and that they don’t overlap with how people consume music right now.

Napster’s plan will succeed, he says, because it is built to capitalize on the “1,000 true fans” (or “100 true fans”) thesis that taps into the notion that many music aficionados would happily pay more if they could get more access and experiences. Meanwhile, Vlassopulos added that Spotify’s plans to charge ever more for different types of content access don’t jibe with where the world is going.

I have no idea if Napster will be able to pull this off—it feels like a long shot, frankly, given that the once-famous brand means nothing to the current generation of music fans. But I like how they’re trying to innovate in an industry that continues to be disrupted by technology.

Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts

DECENTRALIZED NEWS

Crypto asset manager Valkyrie has expanded its Bitcoin futures ETF so that it also offers Ethereum, becoming the first to do so. (WSJ)

The liquidator of Three Arrows Capital says one of the founding bros of the collapsed hedge fund has been arrested in Singapore. (CoinDesk)

Andreessen Horowitz led an almost $17 million funding round in IYK, which is using NFTs and NFC chip technology to verify the authenticity of designer goods. (Fortune)

Ripple has backed away from its plans to acquire crypto custodian Fortress. (Decrypt)

The judge overseeing Sam Bankman-Fried’s case denied his bid for pretrial release yet again. (Fortune)