The music industry can be traced back to the early 1900s, when recorded music appeared. In the past few decades, the industry has made continuous progress with technological changes. From vinyl records to CDs, from radio to television, all these have brought huge growth to the music industry. However, the rise of digital music has brought a decade-long downturn in the industry. Free music download tools such as Napster have contributed to rampant piracy. Users like free music, but the sharp decline in the revenue of music companies has led to large-scale layoffs in the industry, which still plagues many practitioners.
Fast forward to recent years, the new wave of technological change brought by blockchain technology has again swept many industries, including music.
This new wave, known as Web3, has emerged with cryptography technologies such as blockchain, cryptocurrency and NFT (irreplaceable token). In particular, in 2021, NFT will emerge on a large scale and grow explosively. When people are immersed in the imaginary value of NFT, Web3 music, or NFT music, is quietly changing the music industry. Is the music industry ready for subversion this time?
Original intention: save independent artists
Artists seem to have a bright life with both fame and wealth. However, on the contrary, there is always a dark side in the music industry, which is the exploitation of artists by music companies. Artists who avoid inequality by maintaining independence often need to worry about their survival. These independent artists have been looking for ways to stabilize income, and the emergence of blockchain technology seems to be a solution. However, regulating copyright through this new technology ended in failure.
In 2020, the COVID-19 hit the music industry hard, especially the live performance, and many independent artists lost this most important source of income. As a result, many artists feel unprecedented pressure to make a living. If we look back at many Web3 artists who became famous at the beginning of 2023, almost all of them had to find a new way to make a living in 2020: selling NFT.
Picture: emerging Web3 musicians on sound.xyz
Initial entry into the music industry
As early as the beginning of 2021, the so-called "NFT year", when 3LAU (one of the top 100 DJs) auctioned his NFT album "Ultraviolet" for more than $11 million, the entire music industry was shocked. His brokerage company, YMU, was pleased to announce that "during the epidemic, the artists' income was seriously affected by the stop of the tour and the loss of other factors. However, NFT auction provided an exciting opportunity to monetize art. 3LAU proved this in a historic way."
Despite these pioneers, the real explosion of music NFT will not happen until the summer of 2022. There are many reasons for the slow progress, one of which is that artists question the benefits of using NFT to distribute music. After all, the logic of music NFT is very different from the image based and wanton NFT. In addition, the mentality of artists is different from that of consumers who buy NFT. Artists try to solve this problem, for example, by giving their NFT the "useful" attribute - for example, as tickets for future offline performances or VIP for peripheral products.
This strategy has successfully promoted NFT in the music industry on the surface, but we believe that Web3 music and Web3 artists have a better way to succeed: community!
Web3 provides a consumer community for artists
"There is nothing new under the sun." As early as 1999, David Bowie talked about the transformative power of the Internet (now known as Web1) with foresight in an interview with the BBC. He envisioned the relationship artists should establish with their fans and communities. In fact, as early as 1997, he issued "Bowie Bond", which is a unique asset-backed securities. It is a pioneer of social tokens, which is secured by Bowie's current and future album sales and live performance income. However, even if platforms such as Twitter and Instagram appear exactly as he expected, the artist's relationship with fans and communities is still unsatisfactory.
Until now, the emergence of the Web3 community has successfully fulfilled this prophecy. Artists in the Web3 era no longer need to rely on specific platforms provided by record companies to build communities or make a living, as Kevin Kelly's "1000 True Fans" theory does. (If you have 1000 real fans who will buy everything you create, and you can create products worth $100 per year, you can get enough creator income, in this case, $100000 per year, to maintain your own life.)
When Kelly, a famous Chinese-American writer and creator economic investor, first proposed the "1000 True Fans" theory, most people believed that the money paid by 1000 fans was far from enough. But let's take a look at the case study from the Web3 music platform sound.xyz: Kasbee, a musician from the slums of Colombia, sold 1.81 ETH with three singles in the past two months, a total of 58 NFTs (some of which are free), which is already a large amount in her hometown. What is more noteworthy is that DJ Mija, a 30-year-old American, won 10 ETH and 15 ETH in December and November through his efforts to release a single. Each of these singles released 25-120 NFTs.
The difference between these Web3 artists and traditional artists is that when their works are released on the Web3 platform, not only 100% of the income will belong to the artists, but also 10% of the royalties will be returned to the artists in the subsequent resale.
There is no "killer" social platform in Web3, so these artists often use Twitter or Discord to build their fan community and interact with other artists. In the words of another active Web3 artist, Reo Cragun, he has won the natural fans of the Web2 platform on Web3. He is very willing to hold private concerts for fans and NFT collectors to give them the best music experience. At the same time, he is also actively buying the works of other artists, because they are the people and works he likes, and he can benefit a lot from them. If there is no NFT, it will be challenging to create such a cycle between creators and fans in the past.
Web3 music is popular offline
IRL (In Real Life) represents offline events and experiences. Therefore, although Web3 sounds like the product of the Internet, it has gone through the computer screen and extended to the real world of music and art industry.
Most artists rely heavily on on-site activities to generate income in their career. During the epidemic, many live performances had to be cancelled. However, fans' demand for music and art is increasing. Don't believe it? Looking at the figures reported by IFPI and RIAA, the music market in 2021 has exceeded the peak of 10 years ago and is still strengthening. This is certainly not because Web3 plays the role of "savior" - Web3 is still just icing on the cake for the entire music industry. However, the Web3 community soon found a new social demand around NFT.
When virtual avatar NFT is popular, many people have formed new communities around the same type of NFT, whether for investment value or bragging. Since their birth, these new communities have obvious rebellious characters, similar to the hippie culture of the 1970s. When people from all walks of life gather under the banner of Web3 - from students to entrepreneurs and celebrities - they chat on Twitter Space or Discord and plan Web3 activities. Nevertheless, the rebellious and ethereal core of Web3 has brought a more cohesive community than the previous Web2 community. It is obvious that when such a new circle is formed, people are more curious, exploratory and communicative.
Picture: FWB Fest, a party held by FWB, a Web3 cultural community, in the summer of 2022
DAOs and communities thrive
American artist Seth Goldstein had a bad day at the end of 2020. He chose to take his camera to Venice Beach in Los Angeles to have a rest. At that time, because of the epidemic, the whole Venice beach seemed to be in a depression. Desperate, Seth did nothing every day, so he used his telephoto lens to shoot the sunset, and saved many beautiful beach sunset photos. Then a friend suggested that he make these photos into NFT.
After making his photos into video NFT with the help of AI and selling them quickly, Seth was not complacent. He began to think deeply about the value of NFT as a new art form. In Seth's view, as entrepreneurs and artists, with NFT, people can watch and consume physical paintings and artworks without owning them. Imagine such a scenario: people in the online community can go into their local galleries, experience the physical works of digital art, interact with other lovers in person, and enjoy the works of art on the blockchain at any time and anywhere. Inspired by this idea, Seth created a DAO (Decentralized Autonomous Organization): Bright Moments.
The reason for adopting DAO instead of traditional organizations is that Seth wants to create an active online community, which should be managed by all members and beneficial to all members. Therefore, he also practiced the governance forms that DAO should have - issuing governance tokens, exclusive NFT, etc. Bright Moments has been very successful in business so far, displaying and releasing many phenomenal NFT projects. Nevertheless, one of the most successful aspects is its unique offline experience: to get exclusive NFT, you must go to the offline gallery of Bright Moments to cast it yourself. This method attracts many people. Even if we can't go to Los Angeles with offline galleries for the time being, people are willing to buy NFT in the secondary market.
Bright Moments soon expanded to Berlin, New York and London, and some artists famous for their works began to show their skills. For example, in Berlin, some Bright Moments musicians followed its model and created an offline audio club called/GLU: T/, aiming to establish a Web3 fan community based on offline venues. The project was once at the top of the five-issue list of SeedClub, a well-known Web3 cultural incubator, but it was eventually cut off. However, the community is still strong.
Another similar project, wavWRLD (also on the list of SeedClub), was launched by several musicians from SongCamp, a Web3 company, and is dedicated to holding offline programs for NFT collectors every week. So far, dozens of independent artists who have released NFT have been invited to hold concerts, which is exactly what Web3 artists such as the aforementioned Reno Cragun are eager to do. Therefore, these artists and their small communities have established a more cordial relationship with each other. They promoted the subsequent NFT release and sales of these artists. Not only that, wavWRLD also began to explore the idea of making live performance audio and video into NFT, which seemed ridiculous even in the Web3 world a few months ago. But now, this seems to be a new trend.
Picture: Karma Violetta in the wavWRLD activity
These examples show the impact of Web3 on the music industry. Although it originated in the field of technology, it has transformed the paradigm of the music and art industry from creation and distribution to artist-fan interaction. The epidemic has contributed to this process unexpectedly. Community and experience are the core of the integration of Web3 and art. With the impact of the global epidemic receding, we can expect that the music consumption based on live music will return. But can the new Web3 paradigm continue to have an impact?
We believe it will. With the gradual improvement of the Web3 infrastructure and the continuous integration of the encryption economy and real life, various Web3 offline music festivals are also poised to launch.
What new experience will these music "ceremonies" bring to the industry? Let's wait and see!
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