A big shift is taking place in the creator economy thanks to web3 technologies. The music industry will see one of the biggest net benefits of this. Decentralization and tokenization of music are already bringing many exciting new benefits to the industry, with plenty more to come.
One of the biggest benefits we’ll see from web3’s entrance into the music business is that the artist is placed first.
Let’s have a look at some of my favorites.
1. Increased artist control
Decentralized streaming platforms like Audius and BitSong will offer artists more control over their creative works and help them engage with their fanbase at a much more intimate level. Fans will be able to support their favorite artists right from the beginning, allowing them to feel more connected to the music and reap financial rewards from it.
This offers artists the opportunity to bypass traditional intermediaries like record labels and distributors, and go straight to their fans while still being able to make a living. Such a shift enables artists to retain a larger share of revenues from their work and maintain greater creative autonomy throughout their careers. That’s a win-win for artists and fans.
2. New revenue streams
The concept of tokenization is opening up new revenue streams for artists, such as through the sale of NFTs that represent ownership in a song or album. These tokens can be traded on the open market, creating new opportunities for investment and speculation in the music industry from both institutional and retail investors.
However, the benefits of tokenization don’t end there. Artists can reward their most loyal fans with exclusive NFTs, incentivizing people to stream their music more. Alternatively, artists can leverage tokens to sell exclusive content, access, and experiences to a select group of fans, allowing them to expand their revenue streams while the fans get to interact more intimately with the artist.
You can learn more about music NFTs from the following:
AnotherBlock
Royal
Spinamp
Coop Records
3. Improved transparency, accountability, and security
Blockchain technology enables transparency and accountability in the music industry by providing a secure, tamper-proof ledger of ownership and royalties. On Audius, for example, artists can share demos and drafts with their audience without worrying about copyright infringement from any other artist. As soon as artists share new music to the platform, it becomes an irrefutable record, timestamped on the Audius ledger. Furthermore, with ownership rights living on the blockchain as NFTs, royalty payouts become increasingly transparent, ensuring artists and stakeholders are fairly compensated for their contributions and ownership.
“As the song becomes more popular, and that song begins to generate more income, you actually have a right to those royalty streams as the owner of the asset” — 3lau in Protocol
4. Enhanced fan engagement
Decentralized streaming platforms enable the artist to build their fanbase and communities directly on the platform, similar to SoundCloud. Through the use of digital tokens that allow fans to support their favorite artists directly, up-and-coming artists have an opportunity to create a bond with early supporters that’s never been possible before.
This allows artists to create more sustainable fan communities and gives music lovers a completely novel experience.
Overall, the decentralization and tokenization of music have the potential to create a more equitable, transparent, and artist-friendly music industry. Thanks to this new technology, many more artists and their creative works will emerge. Those artists who were previously blocked by record labels are now given the opportunity to thrive. All they need is a laptop and an internet connection.
While there are still many challenges to be addressed, current web3 solutions offer us a glimpse into the future of the music industry. The future of music creation, distribution, and engagement is more exciting than ever.
