Learn: How Web3 disrupts the music sector?
Web3 is a cross-sector notion that describes a new standard for online services – the one where users can enjoy a true ownership of their assets.
The music industry is among those that web3 could genuinely disrupt, and this is already happening.
Its evolution from CDs to streaming platforms and social media has made it easier for artists to share their music, but it did not take away all the gatekeepers. Artists still need to finance their work, which explains why record labels are still very much in business. Streaming platforms like Spotify are regularly criticized for not remunerating the artists enough, and social media alone may not be enough to keep the fans engaged.
Web3 can bring solutions to these problems.
As any digital asset, music too can be tokenized – or in other words, registered as an NFT.
Famous artists have been releasing NFT albums and singles for a while now. Usually issued as addition to the traditional channels, these NFTs come with collectible artwork and special perks, such as front-row tickets to the artist’s shows.
Music NFTs are becoming an important additional monetization source: in 2021, Kings of Leon’s NFT album hauled in about $2.5 million, DJ 3LAU’s - $11.6 million, and DJ Steve Aoki famously said: “In the 10 years I’ve been making music, six albums, and you culminate all those advances, what I did in one drop last year in NFTs, I made more money.”
NFT albums are becoming ever more popular, and record labels try to not miss out. This August Warner Records UK partnered with music NFT marketplace Serenade to launch a new music format they called Digital Pressings – an NFT featuring full length audio together with unique artworks and unlockable rewards. The first band to try this format was none other than Muse, selling out 1’000 NFTs in just 25 minutes.
NFTs are programmable and can be used to give its owner the right to collect a share of its royalties. This quality is exploited by Royal, a marketplace that allows its users to buy and trade music NFTs and earn a share of the attached royalties alongside the artists, as the music streams on platforms like Spotify or Apple Music.
Services like Royal could become key in financing independent artists, also helping them create a group of engaged fans, who are interested in seeing this artist succeed.
Audius, another web3 music platform, ambitions to become a streaming service in its own right.
It promises a new type of revenue distribution, where users pay artists directly when streaming their music, ensuring a level of revenue transparency that traditional services like Spotify cannot provide. This system, however, is yet to prove itself: for the moment $AUDIO token is used purely as encouragement and only top 5 artists are actually paid every week.
The platform now counts around 250,000 artists and seven million listeners.
Selling concert tickets as NFTs not only streamlines the process, bypassing middlemen, but also help fighting bad players in the secondary ticketing market. Platforms like Yellowheart can inscribe the rules for ticket sales into the smart contract of an associated NFT, precising the price of a seat, a maximum reseller price…
Selling tickets as NFTs can also help better distribute the revenue. Their smart contracts can be programmed to send an agreed percentage of the price to the artist, promoter, the venue… and do it not only for the initial ticket sale, but for every consecutive resale too.
NFTs offer a new type of artist-fan relationship, which can go beyond exclusive merch or meets & greets.
Steve Aoki has created Aok1verse, a whole NFT-gated virtual world with numerous perks, ranging from live chats with the DJ to co-creating a song.
Companies like Pixelynx explore new ways of music consumption and experiment in bringing gaming, augmented reality and metaverse elements into the music space. Founded by DJs deadmau5 and Richie Hawtin, yesterday Pixelynx was acquired by Animoca Brands, a web3 behemoth.
The web3 music potential is huge, and new high-profile projects appear regularly. This spring John Legend’s music NFT platform project raised $7.5 million. Warner Music Group announced a partnership with Polygon and LGND, an e-commerce builder, to create a music and collectibles platform. Yesterday the classic Windows media player Winamp added NFT support…
It looks like NFT music is here to stay.