The global music industry is believed to be worth more than $40 billion, but sadly, approximately only 12% of the revenue goes to artists. A chain of intermediaries consumes the rest, 88%. Artists are the real backbones of the music industry, and they deserve better remunerations. Can you imagine how the music industry could flourish when most revenue is returned to the actual music creators? It could be a disruption, exponentially changing the quality and quantity of music creation. However, this idea can only be shipped with the introduction of blockchain and Web3 in the music industry. Advocates of blockchain and decentralization philosophy believe that Web3 technology has the power to disrupt ‘big tech’ music companies, democratizing the industry and finally leading industry to flourish. This article will help you understand how Web3 music can disrupt the industry positively.
Ready or not, Web3 is here to stay despite the debates on its feasibility across different industries. For musicians eager to carve new innovative pathways, create niche communities, and push the boundaries of creativity, Web3 has grown to become the best-fit solution. As Web3 music protocols become more prevalent, they could empower artists by giving them greater control over their work and new revenue opportunities.
Traditionally, the music industry has relied on intermediaries, such as record companies and streaming services, to facilitate music distribution from artists to listeners. However, these intermediaries often take a significant portion of the profits, leaving less for the musicians who create the music. Now, how does Web3 help in this scenario?
Well, decentralization and transparency are the two pillars around which Web3 is built. With these powerful features, Web3 technology can revolutionize the music industry by empowering artists to sell exclusive content directly to their fans as fan tokens. Through smart contracts and cryptocurrency, artists can bypass traditional intermediaries, such as record labels and streaming services, and offer unique experiences, like NFT bundles with digital artwork and lifetime concert passes, to their dedicated followers. In a previous article, we learned how record labels could embrace NFTs to add more value to their fans. This option gives artists more control and fosters direct engagement between musicians and fans.
For the music industry, Web3 can revolutionize how artists and rights holders are compensated for their work. The use of blockchain technology can create a more transparent and efficient system for tracking and distributing royalties, eliminating the need for intermediaries such as record labels. Web3 music platforms allow for direct artist-to-fan transactions, bypassing the need for intermediaries such as record labels. This allows for more control, transparency, and flexibility for the artist and gives more power to the creators and the consumers.
Web3 also allows music NFTs (non-fungible tokens), unique digital assets representing ownership of a music piece, concert ticket, or collectible item. This can provide artists with new ways to monetize their work and offer fans the chance to own a piece. Web3 music has the potential to empower music creators, give more control to consumers, and create a more transparent and efficient system for the music industry.
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The main components of Web3 are blockchain and DAOs. These protocols, combined with artificial intelligence and the metaverse, can offer a lot for the music industry and create a brighter dawn by creating numerous opportunities for artists in the music industry.
Decentralized payment networks offer several benefits for artists and musicians. They can allow individuals to receive and exchange money without relying on third parties, and they can make international transfers cheaper, more transparent, and more secure. The use of blockchain technology can create a more transparent and efficient system for tracking and distributing royalties, eliminating the need for intermediaries such as record labels. This can help artists and rights holders get compensated more fairly for their work. In addition, decentralized payment networks can provide financial services to individuals in countries with limited access to the traditional financial system. These networks can be accessed with just a mobile phone and a wallet, making them easily accessible to anyone with an internet connection.
DAOs, or decentralized autonomous organizations, provide a direct connection between artists, consumers, and other stakeholders, eliminating the need for intermediaries. They can help to address imbalances in the music industry by giving artists more control over the distribution and consumption of their work and by creating a direct connection between musicians and their audiences. DAOs also allow infrastructure layers like record companies and management to work more closely with their core demographics and get closer to the music itself. Web3 music enables the creation of decentralized music platforms where artists can share, distribute and monetize their work without relying on centralized intermediaries.
Music streaming platforms use AI to improve their services through personalized recommendations, new track suggestions, and playlist creation. AI-based tools are also being used to enhance the quality of streaming services by removing background noise, optimizing bitrates, and decreasing latency. In addition, artists are starting to use AI to compose songs and create music videos. Overall, using AI in the music industry allows for a more personalized and higher-quality user experience.
Metaverse allows music artists to have a closer, more immersive relationship with their fans through streaming concerts and music, music videos, digital merchandise, access passes and tickets, avatars, and audio-visual art. It can benefit independent artists by allowing them to collaborate and reach a global audience without needing record labels. It can also create a direct partnership between the artist and their fans.
Web3 music also allows music NFTs (non-fungible tokens), unique digital assets representing ownership of a music piece, concert ticket, or collectible item. This can provide artists with new ways to monetize their work and offer fans the chance to own a piece.
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Music NFTs are a new way for artists to monetize their work and for fans to own a piece. NFTs are unique digital assets representing the ownership of a piece of music, a concert ticket, or a collectible item. They work on blockchain technology, which enables the creation of decentralized digital ledgers that can be used to track and verify transactions and ownership. When an artist creates and sells an NFT, they receive payment in the form of cryptocurrency for the sale of the NFT. This allows artists to sell their music in a new way, bypassing traditional music industry intermediaries such as record labels and giving them more control over their work.
On the other hand, collectors can also make money from music NFTs if the value of the NFT increases over time and they decide to resell it. The value of NFTs can be influenced by the artist’s fame and popularity, the uniqueness of the NFT, and the demand for it. It’s important to note that the NFT market is relatively new, and it’s still being determined how sustainable it will be over time. The value of NFTs is currently driven by hype and speculation. It’s unclear if the market will continue to grow long-term. However, it’s an interesting new development in the music industry that has the potential to change the way music is consumed and monetized.
The current music industry model has some limitations, such as the need for musicians to pay a monthly subscription fee to platforms like Spotify and the delay in receiving payments for audio streams. NFTs can change this by enabling musicians to list their NFTs on marketplaces and directly engage with their fans, receiving all the revenue from their music sales. Additionally, NFTs allow musicians to continue earning royalties from future sales and eliminate the risk of copyright issues as the records are securely stored on the blockchain.
Musicians can earn royalties from selling their music NFTs on marketplaces like OpenSea and Rarible by setting a percentage of the sale price to them as secondary sales fees. However, suppose an NFT is transferred from one marketplace to another. In that case, it may be difficult for the musician to receive their royalties as various blockchain projects are still developing cross-chain NFT sales.
Here we will examine seven music blockchain companies and their projects that have emerged in recent years. These companies are examples of the progress in Web3 music and its potential to benefit artists and the music industry as a whole.
1. Audius
Audius is a decentralized music streaming platform that is built on blockchain technology. It allows artists and curators more control over their music and allows them to create immutable records for their work, which are secured by a decentralized network.
The platform aims to cut out intermediaries in the traditional music industry by connecting artists directly with their fans. Artists have complete ownership of their Music on Audius and can decide how to monetize it through free distribution or custom fees for exclusive content. Unlike other streaming services, Audius does not take a cut of artists’ revenue and instead allows music curators to earn 90% of the revenue in AUDIO, the platform’s native cryptocurrency, with the remaining 10% going to stakers supporting the Audius network.
2. Royal
Royal is a platform that allows artists to sell song rights as non-fungible tokens (NFTs), enabling artists and fans to co-own music and earn royalties. It allows artists to maintain independence and creative control while allowing fans to support their careers.
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To use the platform, artists can choose what percentage of their song’s royalties to sell and include additional perks such as fan experiences, special tracks, and digital art. Users can then purchase these streaming royalties in the form of “tokens” directly from the artist and will receive their accrued royalties at a later date determined by the artist. These tokens can also be resold on an NFT exchange, allowing the new owner to claim all royalties and additional benefits associated with the token.
3. Melodity
Melodity is working to create a decentralized creator economy in the music industry by building a Web3 music monetization infrastructure. The company is developing a proprietary blockchain ecosystem that includes streaming, play-to-earn (P2E) features, and a music-focused metaverse, which aims to provide opportunities for music artists, professionals, influencers, and other stakeholders. The platform allows artists, content creators, and other cultural figures to take control and leverage the potential of non-fungible tokens (NFTs) to unlock hidden value and create new digital assets and virtual experiences. Melodity is also working on a marketplace for Music NFTs and integrating traditional physical shows into its music-oriented metaverse.
4. Guts
GUTS is a ticketing system that uses blockchain technology to register ownership of smart tickets and prevent ticket fraud. It allows event organizers and artists to set the price for tickets, which can only be sold or resold at that price, eliminating high fees and prices for secondary tickets. The platform utilizes innovative technologies such as blockchain and dynamic QR codes to create a user-friendly experience for all ages. GUTS has already successfully ticketed various events involving thousands of people from multiple countries, including stadium concerts, business conferences, and dance parties.
5. Muscoin
Musicoin is a blockchain-based music streaming platform that aims to create a shared economy for music creation, distribution, and consumption. It allows listeners to stream songs from independent musicians for free without ads while providing musicians with a more fair compensation compared to other major music streaming platforms.
Musicoin uses a decentralized, peer-to-peer platform similar to Bitcoin or Ethereum, which allows it to host music accessible to everyone and facilitates transparent and secure transactions. Musicians receive 100% of the revenue from their streams on the platform, which operates on a pay-per-play (PPP) basis. Users can also directly tip their favorite musicians in the platform’s native cryptocurrency, $MUSIC, to show their appreciation for their music.
6. OnChain Music
OnChain music is a platform that helps artists, musicians, and labels earn more money from their royalties through the use of blockchain and the sale of non-fungible tokens (NFTs). It has created the $MUSIC token, a hybrid cryptocurrency that combines utility, governance, and revenue share characteristics. As the value of the $MUSIC token increases, artists signed with OnChain have the potential to receive higher royalty payments, turning their music into a valuable investment. OnChain distributes 85% of all revenue from music hosted on its platform through platforms like Audius, XSongs, and Emanate. It pays out this revenue in cryptocurrency that can be exchanged for USD or USDT (Tether). The platform currently has 235 artists, ten record labels, nearly 2,000 songs, and over 300 albums on its roster and is continuing to grow.
7. Opulus
Opulous is a platform that combines music and decentralized finance (DeFi). On the platform, users can purchase non-fungible music tokens (NFTs) that also include the copyright of the music and entitle them to receive a share of the monthly royalty income. Musicians can also apply for loans on the platform using their music works and royalty income as collateral. Opulous aims to address the issue of unfair royalty distribution in music streaming by operating a decentralized platform that allows users to support artists directly. The platform, based on the Ethereum blockchain and stores tracks on the Interplanetary File System (IPFS) to reduce server costs, gives artists a higher percentage of revenue than other streaming platforms, with expected revenue expected to be 90% or higher. It also rewards users who discover and spread music on the platform through playlist creation by giving them a share of royalties.
It is quite evident that blockchain, Web3, and metaverse technologies have the potential to revolutionize the music industry. These new platforms, combined with cryptocurrency and smart contracts, could create immersive and experiential ways for music lovers to connect and share their passion for music. Not only could this enhance the social aspect of music, but it could also provide a more equitable system for artists to earn a fair wage and for fans to support their favorite musicians directly.
With advancements in technology, we can expect more personalized and immersive experiences for listeners. Virtual reality will be integrated with music streaming platforms, allowing users to experience live performances and concerts in a new and more engaging way. AI and machine learning will also play a significant role in the future of music streaming. With these technologies, streaming services can offer highly personalized recommendations and playlists that cater to each listener’s unique tastes and preferences.
Another important aspect of the future of music streaming is the integration of blockchain technology. This will allow artists to directly connect and monetize their work with their fans, bypassing intermediaries and providing a more transparent and efficient system for tracking and distributing royalties. The future of Web3 music streaming is exciting, with new technologies and innovative approaches offering listeners an ever-evolving and personalized music experience.
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