Web3 technologies, such as decentralized applications (dApps), non-fungible tokens (NFTs), and decentralized autonomous organizations (DAOs), have the potential to revolutionize the music industry by enabling artists to have more control over their work and how it is distributed and monetized.
We will not get tired of saying it: web3 creates monetization models in different fields, with special interest for those who were hit by the irruption of the internet and the consequences of its demonetization. I am referring, of course, to those integrated fields in what is called the creative, cultural, and entertainment industries. That is to say, an industry in which one of its main axes and values ​​is creativity.
Here are a few ways that Web3 technologies could impact the music industry:
- Disintermediation: Web3 technologies can enable artists to sell their music directly to fans, bypassing traditional gatekeepers like record labels and music distributors. This can give artists more control over their work and allow them to keep a larger share of the profits.
- NFTs: NFTs can be used to represent unique digital assets, such as music tracks or album art. Artists can sell NFTs to fans as a way to monetize their work and give fans ownership of a unique digital asset.
- Smart contracts: Smart contracts can be used to automate the distribution and licensing of music, allowing artists to get paid more quickly and easily.
- Decentralized streaming: Web3 technologies could enable the creation of decentralized streaming platforms that are owned and operated by the users, rather than by a central entity. This could give artists a larger share of the profits from streaming and allow them to have more control over how their music is distributed.
Web3 Puts Music To The Future Economy of Creativity
With the Internet, the symbolically well-valued creativity, in a supposed society of leisure and consumption of culture and entertainment, was demonetized from access to its consumption without remunerating the creators. When illegal copying or plagiarism dominates without economic recognition, creators and creativity are impoverished.
Web3 Music
There are many ways in which the monetization of cultural products in their digital consumption can be carried out. But for simplicity, let’s break them down into two broad types: streaming on the one hand, and proprietary product on the other. It is in this second type where NFTs come in. Let’s see how this materializes in music.
After the crisis of the record companies, streaming platforms, like Spotify, seemed like the alternative. The creators received income, derived from payments for advertising or from the users themselves, from the platform where they put their products. Income is proportional to consumption. The problem with these platforms is for the new musicians, the new creators because mainstream artists are favored.
Practically and algorithmically, they are constituted under the logic -tautology- best seller, so that they will tend to listen to what is heard the most. If, for example, a musical genre is selected, the order of appearance for the specific selection will be given by the most previously selected and that, in addition, have the genre label in their identification. In fact, of the around eight million creators on Spotify, very few manage to achieve minimally interesting income.
Bet on creativity
In addition, for the creator to be able to live with dignity through this platform-managed streaming model, their products must be consumed millions of times. Large figures, millionaires, and global, which is what the platform makes possible, once it has been imposed on the market, practically monopolizing it.
From such logic, creativity is somewhat affected, and devalued, since what can be considered really new, the radically creative has very difficulty getting out of the depths. It must be taken into account that, until not so long ago, what is now radically new and minority, in the field of artistic production, is what can generate the bases for creativity in the coming years.
It is no longer just that, from the economic point of view, they win, but the creativity system itself would enter into a kind of equilibrium on what is established, increasingly resistant to change and, therefore, adaptation. to society and innovation in society.
The alternative seems to be in the use of NFTs. In fact, there are already artists who earn more income this way, than in the flow per platform. It must be emphasized that one model does not replace the other, but rather can exist together. Moreover, they can feed each other.
In collaboration with streaming platforms
The income of the artists, from the NFTs, is located at the beginning of the process and more as an investment, than as direct consumption. The musical creator puts up for sale, in the form of NFTs, his current or even future creation. Those who acquire it will be able to enjoy it, the product, and, at the same time, enjoy the income that the intellectual property rights generate each time it is reproduced. It is in this second part that the articulation with the streaming platforms comes.
Therefore, there would be platforms for investment in creators and songs or musical themes and platforms for their consumption, being able to articulate both purposes on the same platform.
Through the investment platform, anyone can invest in their favorite artist. This is what the start-up Coop Records propose. In fact, each artist becomes an entrepreneur of himself and his products in search of investors. Investors will primarily seek out their fans, selling all or part of their copyright to them. Thus, the artist could keep most of them.
How To Take The First Steps Towards Web3
In turn, together with other artists, they can become entrepreneurs who own their own creative companies. Of course, this implies a certain dedication to the management and decisions on the strategies of that company. Of course, in exchange for control, between them and their fans, everything that has to do with their activity.
Renewal of the musical ecosystem
From here, you are not part of millions or even thousands of fans. These are relatively small groups, small sub-ecosystems, that trust and are personally, professionally, or financially involved in their activity and in their future. Involvement with a form of music, with a musical genre, not just with a single artist. It is the lever to start looking for new consumers and, perhaps, reach the hundreds of thousands or millions.
The horizon is to go from that small sub-ecosystem defined by a new musical taste to the renewal of the musical ecosystem, thus changing the balance in the musical field. What was a creative, professional, and cheap project, supported by a relatively small number of fans through a web3 application, now leaps to the surface of streaming platforms.
Web3 technologies are still in the early stages of development and adoption, and it is difficult to predict exactly how they will impact the economy of creativity. However, they have the potential to significantly change the way that creative work is created, distributed, and monetized.
