What Does Web3 Really Mean for Musicians?
Here are the top 4 benefits for musicians in Web 3.0…
Peanut butter and jelly, Batman and Robin, Nascar and rednecks, Apple Bottom jeans and boots with the fur…
If you haven’t guessed it already, this is a humble list of things that just plain go together. And here’s one more: Blockchain and Disruption.
These days, most of the content you explore on Web3 isn’t complete without at least touching on “the disruptive power of the blockchain.” After all, the blockchain and cryptocurrency first came onto the scene to (wait for it) – disrupt – the financial industry by way of eliminating superfluous middlemen.
Since then, people have wasted no time finding other industries to throw the proverbial blockchain wrench into – and the music industry is no different.
If you’ve been here before, you probably already know about the systemic issues within the music industry, or how the impact of streaming and the digital age has severely limited 99 percent of artists’ ability to earn a living. You might even know what makes the music industry an ideal use case for blockchain and Web3 – and if not, this article will tell you everything you need to know.
But while you may understand how the blockchain can disrupt the music industry, you might not be aware of how musicians actually stand to benefit.
With that said, let’s dive into the top four Web3 benefits for musicians…
1. Compensation Transparency
If there’s one thing that’s abundantly clear about the music industry, it’s that the methods of compensation are, well…not. While the variety of different types of royalties is enough to make anyone’s head spin, the process of splitting them between labels, distributors, producers, writers, artists, and who knows who else is downright mystifying. Add to this the grossly unfair compensation (reluctantly) handed out by streaming platforms and it isn’t hard to see that artists are getting the short end of the stick.
But now, Web3 presents the perfect opportunity to shed light on a traditionally murky process. Thanks to blockchain’s decentralized exchanges, new, more equitable models of compensation are possible – ones that guarantee terms transparency and fair distribution to each party. And the best part is that the more blockchain tech like cryptography and smart contracts continue to evolve (which is pretty much always), the stronger, more secure and reliable these compensation models will be.
2. New Revenue Streams
Let’s talk cold hard cash… The blockchain makes it possible for artists to expand into new revenue streams that go beyond just streaming, touring or physical merch. That’s right, I’m talking about NFTs, and all of the astronomical earning potential they encompass.
When most people think of music NFTs, they typically think of a digital asset representing a particular song, video, or even a whole album. For example, electro house DJ, Steve Aoki, dropped a music NFT project consisting of 11 unique tracks coupled with stunning animations which sold for $4.25 Million. While this is certainly one lucrative use of music NFTs (with practically limitless variations), it isn’t the only one.
Musicians now have the option to fractionalize streaming royalty rights of their songs as NFTs (which, if you didn’t know, is a big part of what NEWM is all about). This means that fans or collectors who buy the NFT earn the right to collect a percentage of streaming royalties for every stream. To take it another step further, these NFTs can feature additional utility that gives fans access to exclusive merch, VIP events, meet and greets, privileges to future NFT drops and so much more.
3. The Freedom of Choice
While we’re on the subject of music NFTs and royalties, let’s take a look at how they can put control and freedom back into the hands of artists… Unlike traditional music royalties, which are typically fixed percentages paid to songwriters, music labels, and other rights holders, NFT minting gives artists the freedom to select their own royalty structures – both for streaming royalties and secondary sales royalties.
For example, an artist wanting to fractionalize and sell the rights to a song’s streaming royalties has the freedom to determine the exact percentage of rights they want to sell. On top of this, artists have the option to collect extra royalties (also called “creator fees”) representing a percentage of every additional sale of the NFT when it is resold. Let’s say the artist chooses to receive 15% of secondary sales as royalties. Before minting they simply set the royalty amount which will trigger the smart contract to automatically direct the creator fee to a predetermined crypto wallet every time the asset is sold. Simple, automatic, and transparent – how refreshing…
4. Bridging the Gap between Artist and Fan
In 2008, Wired writer, Kevin Kell, first coined the “1,000 true fans” theory which suggests that any artist only really needs 1,000 devoted fans to be successful. While this model might have held true in the early millennium, it has become exponentially more achievable in the era of Web 3.0 and limitless digital connectivity.
Imagine this: you’re an independent artist sharing your creations quite literally with the entire world with just a push of a button. All the while, your platform is getting bigger, your reach is getting wider, and hundreds of people are discovering you daily. And what’s drawing them in? Your music to be sure, but also the opportunity to interact with you, the artist, on a whole new level – web3 and music NFTs add a whole new dimension of interaction to the equation.
Music NFTs not only offer artists the tools to build an engaged community from scratch, they also give music lovers an avenue to support and connect with their favorite artists. At the same time, NFT holders benefit by potentially earning passive income, in addition to any extra NFT utility and the knowledge that their support is going directly to the artists and not lining the pockets of some music industry bigwig. They’re invested in your success, you’re devoted to them and it all works together in perfect symbiosis.
The Future is Bright for Musicians and the Blockchain
For decades, the music industry has been evolving alongside technology, from recording and production to the way we consume music itself. But the internal mechanisms and status quo that have defined the industry practically since its inception have largely remained the same – until now.
The application of Web3 and blockchain technology to the music industry marks a long overdue turning point for musicians and fans – and the promise of an industry that can no longer benefit from the exploitation of those around which it revolves. This is the vision that we at NEWM are dedicated to making a reality and it’s already beginning.
If you or someone you know is a musician and want to join in as a pioneer in the new frontier of music – join our Artist Portal and be among the first pioneers to fractionalize your music IP rights once our Music Streaming Marketplace goes live.
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