Web 3 Music Is Rising：How Blockchain and NFTs Are Changing the Music Industry

2022-03-07, 03:42

Summary

1. The music industry will be the next frontier in Web 3.0 due to the superb characteristics of blockchain and NFT.
2. The nagging problem in the traditional music industry is that both musicians and ordinary users rely too much on middlemen, which leads to cheating.
3. For the music industry, Web 3.0 will be an arena where creators take ownership of content rights from oligarchs. Be it lyricists, writers, or artists, they all can win a place there.
4. In the digital world, Music NFTs endow musical works with value and make them scarce.
5. On some copyrighted NFT music platforms, users who purchase music NFTs will obtain the complete or partial copyright of the music works.

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Since the birth of the Internet 30 years ago, the Internet has penetrated each part of our lives and has played a crucial role in changing the world. However, as it advances, the Internet has been monopolized by a few giants and is becoming more centralized. Against this backdrop, the Internet may tilt towards the decentralized Web 3.0 based on blockchain technology.

The Internet is also advancing in a spiral manner, and all the industries that have undergone drastic changes in Web 2.0 will be reshuffled in Web 3.0. The music industry will be the next frontier in Web 3.0 due to the superb characteristics of blockchain and NFT, as well as the features of the music industry.

Image: Coopahtroopa.mirror.xyz

Nagging Problems in the traditional music industry

As a creative economy, the music industry faces similar dilemmas to video creation platforms, social platforms, and other industries.

First of all, the biggest problem in the traditional music industry is that both musicians and ordinary users rely too much on middlemen, which results in very little income. However, this pertains to the streaming media model common to traditional music platforms. So what is the streaming model? Streaming media is the mainstream mode adopted by traditional music platforms. It works in such a way that if musicians publish music works on Web2.0 platforms such as Spotify, Apple Music, and QQ Music, they will receive a fixed amount of income.

There are problems with this model. First, the revenue from a single play of the work is exceedingly reduced. The creator can get about $5 after a song is played 1,000 times; besides, most of these revenues will be allocated to the music platform and the record company. What creators can and will get is very meager. In the traditional music industry, nearly 90% of the revenue brought by music works is obtained by third-party companies such as record companies and streaming media platforms, and music creators can only get about 10% of the revenue of the entire platform, according to the relevant research. Musicians who fail to own a large fan base can hardly live on the income. Obviously, this is adverse to music creation and music innovation.

Furthermore, the strong power of traditional music platforms makes it difficult for music creators to independently promote and release their works. As a result, even good works may be buried if they do not fall back on music platforms and record companies. Because of this, individual creators are further squeezed by the big platforms and can hardly live on their income. In addition, the issuing rights of music works are often held by large record companies and music platforms, which, at the same time, leads to various copyright disputes in the music industry.

The Web 3.0 Revolution in the Music Industry

From Web 1.0 to 3.0, we have witnessed three phases: watching, creating, and owning. For the music industry, it can be said that Web 3.0 will be an arena where creators try to take ownership of content from oligarchs. Be it lyricists, writers, or artists, they all can win a place there and directly earn revenues from their works through tokens and contracts.

In the Web 3.0 revolution, the music industry has to abandon the unreasonable revenue distribution system and get rid of the control of the middleman who extracts value from issuing the works. The real creators should not be exploited by the middlemen who broker the trading but should get the vast majority of the value generated by the work. Embracing this idea, Audius, a decentralized Web 3.0 streaming media platform, came into being. Compared to traditional music platforms such as Spotify, Audius is a simpler music aggregation platform where all music data is stored on the IPFS network, and the token economy and community play a role in maintaining the stable operation of the system. In a tweet released on March 13, 2020, Audius stated that it will allocate 90% of the platform's revenue to creators, 10% as a reward for node operators, and the platform itself will not take a cent.

Image: main interface of Audius

Secondly, musical works will be endowed with value in the digital world. A musical composition in a computer is ultimately just a string of 0s and 1s that can be easily copied. This allows piracy to go rampant, and the value of musical works cannot be fully realised. The way of converting them into NFTs or tokens may solve this problem. By doing so, creators can directly contact fans through music NFTs, and fans can support the musicians by subscribing to their music NFTs. In a way, this model shows a pure relationship between musicians and fans, characteristic of SocialFi. Pianity and MintSongs are such kinds of Web 3.0 music platforms

Image: Music NFT trading market on Pianity

Thirdly, Web 3.0 music platforms link the music NFTs created by musicians to the copyright of the music works. Users who buy music NFTs can obtain complete or part of copyrights of the works and can obtain certain dividends from the subsequent income of the work. Some platforms even allow NFT holders to modify the content of musical works. This model endows the music NFT released with more intuitive commercial value in addition to the collection value. The copyright providers in traditional music platforms are replaced by NFTs and smart contracts here, and the value of music copyrights can flow more flexibly. Royal, Opulous, and Melos are representatives of such Web 3.0 music platforms.

Image: Music NFT market on the Melos platform

Conclusion

The Web 3.0 music industry will break the profit distribution system, set up a music platform governed by the community, wrap music as NFT works, and then bind music NFTs to copyrights in the real world. Web 3.0 also displays infinite creativity in the music industry. The decentralized Web 3.0 music platform will also be a haven for many musicians undergoing ruthless manipulation by oligarchs.

Author: Ashley. H, Gate.io Researcher; Translator: Cedar. W
*This article represents only the researcher's views and does not constitute any investment suggestions.
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