Why Web3 music?
Web3 is a dynamic, interesting space. And major labels are now getting into the fray.
Let’s examine some of the reasons one might like to jump into Web3 Music.
Access to a high quality global network
Perhaps the most valuable aspect of Web3 Music at the moment is the networking aspect. At the time of writing this article, Web3 Music is still relatively small, and due to the barrier of entry (which is essentially just education about the blockchain), Web3 tends to attract folks interested in both innovation and collaboration.
The current music industry, at its most basic level, is a huge, high level network of people. Labels, with their audience bases, are essentially just powerful networks. And so, one way up is to become integrated within these networks. The other way is to build your own. This is where Web3 is interesting.
Web3 Music is essentially a whole new network currently being built, often by younger folks in the industry. This provides unique opportunities to make friends with people who could with a musical project - the kind of folks we spoke about in our Building A Team article.
Just by being a part of a team seriously building in Web3, I have personally spoken to dozens of musicians, label heads, producers, event organisers, incubators and other projects. If you intend to build something seriously in web3, like-minded people are often not more than a Twitter Space or DM away.
Alternative Revenue Streams
In the Web2 music industry the most common revenue streams include:
- Music sales (bandcamp, beatport etc)
- Streaming royalties (spotify, apple music, youtube, radio play)
- Live performance (at clubs, festivals, venues etc)
- Merchandise (t shirts, vinyl etc)
- Sync/licensing (licensing your music to a tv show, ad or movie)
- Teaching (in person and online)
These are all useful, and most bigger artists in the industry will use some combination of the above.
Web3 offers some extras:
- Music NFT sales
- Metaverse Performances
Let’s have a look at these in a bit more detail.
Music NFTs
If you aren’t familiar with Music NFTs already, we have you covered with an article here. If you understand the basics, feel free to read on.
Music NFTs are essentially similar in practice to something like baseball cards. There is a limited amount available, they have a verified creator (“authentic/official”) and their price generally rises with demand.
By creating, and listing a music NFT for sale on a marketplace, you provide an opportunity for fans and collectors to support you by buying an NFT.
But what’s the difference between buying a Music NFT or a song on a platform like Bandcamp?
The two main differences are:
- Different audiences - people attracted to bandcamp may be different to those attracted to web3.
- Bandcamp does not offer Utility in the same way that Music NFTs do - such as tokengated content, secondary royalties or access to exclusive communities.
Once you have built a high quality audience and network in web3 (most often this is done through Twitter and supplemented through Discord and Telegram), making some money selling music NFTs to those who want to support you is another revenue stream.
And the ability to offer utility through NFTs (such as accessing locked content, membership to communities, or being able to periodically reward fans by sending them nfts) is where a lot of innovation and experimentation is currently happening.
Additionally, if a collection is successful, the creator can gain a percentage of royalties each time an NFT is sold on to another buyer, adding an extra stream of revenue back to the creator.
A great way to gain insight into the sale of Music NFTs is to follow and study those who are doing well in Web3 Music already (hint - Twitter is your friend for this).
Metaverse Performances
The Metaverse (A Web3 internet of community owned virtual worlds, such as Voxels) is a new live performance space where artists (as their avatars) can perform to virtual crowds across the world.
These performances are often packaged within an event, such as an NFT drop or a project launch.
Performances can be pre-recorded and streamed into the 3d spaces through platforms such as twitch, performed live on video, or some combination of both with virtual avatars.
Artists can use these spaces to interact and meet new fans, or provide treasure hunts for NFTs across the spaces.
Many celebrities have now performed in the Metaverse and we expect to see a lot more of this happening in the coming months and years - with increasing levels of customisation and sophistication.
While there are limited opportunities to make money with metaverse shows currently, there will be more. Another option is to create a live metaverse experience so compelling that folks will pay for tickets to attend.
Conclusion
Web3 is still new, and isn’t without its risks and barriers.
As Web3 is (mostly) about decentralisation, and as it is such new technology, there are inherent risks of hacks, phishing and mistakes. These risks can mostly be minimised through education and experience.
And Web3 isn’t (necessarily) everything - most artists in 2022 utilise as many streams of income as they can, and at the moment, a lot of these still sit in the Web2 world.
As we talked about in Why There Are No Rules In The Music Industry, experimentation and learning by doing is key in Music, and each artist's approach will be different and tailored to them.