Here’s how Web3 is transforming the music industry
The age of streaming and Covid-19 has made it difficult for many musicians to earn a living and develop deep connections with fans. Web3 is poised to change that.
The modern era has brought mixed blessings for musicians. On the one hand, streaming services such as Spotify and Apple Music have enabled artists to reach vast numbers of people around the world. At the same time, those same streaming platforms are notoriously stingy; Apple Music pays artists about $0.01 per stream, according to The Wall Street Journal, while Spotify reportedly pays even less. Such miserly rates might be sufficient for the small handful of superstars out there with billions of streams, but for the vast majority of artists it’s a pittance.
There’s also the fact that – as many vinyl aficionados are quick to point out – some intangible aesthetic quality has arguably been sacrificed in our need for the instant gratification that streaming provides, with its repeat and shuffle features. Back in the day, artists could expect their fans to listen to an entire album straight through, perhaps while lying on the couch and admiring the intricate details of the album cover’s artwork. There are definitely some old-school types out there today who still listen to music in that way, but they’re no longer the norm.
Web3 is providing musicians with new income streams and new ways to connect with fans / Adobe Stock
While our music-consuming habits have changed dramatically, the income streams that are available to artists have largely remained the same. Most musicians, then as now, depend on touring for their bread and butter. And touring, then as now, kind of sucks. Those of us in the bleachers and on the dancefloor typically only see the romantic moments of an artist’s tour (the concerts). But the vast majority of many music tours, particularly those of up-and-coming artists, are pretty much non-stop carousel rides of stress – planning logistics, talking to venues, eating cheap food, sleeping in buses, and being away from spouses and kids for long stretches of time.
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But painful as touring often could be, it was a reliable paycheck. Enter Covid-19, and all of that comes to an abrupt stop. The pandemic’s grip on the live music industry is beginning to slacken, but it’s going to be a while before concerts return to their pre-pandemic status quo – if, in fact, they ever do.
All of this is to say: it’s a difficult moment in history for musicians. Thankfully, web3 might be able to provide an antidote to the suffering.
How web3 is putting control in the hands of artists
Trying to define web3 is a bit like trying to define social media. It’s nebulous, an umbrella term that encapsulates both specific technologies and a radically transformative social phenomenon. That being said, here’s a decent working definition: web3 is the third rung on the evolutionary ladder of the world wide web, which is oriented around the twin pillars of decentralization and transparency, in contrast to the top-down, hierarchical models of control that have prevailed over the internet since its inception in the early 90s. Web3 is based in large part on a technology called the blockchain – essentially an immutable digital ledger – and has given rise to cryptocurrency, non-fungible tokens (NFTs), the metaverse and other modern tools that are transforming the ways in which we interact with technology and each other.
Web3 is still in its infancy, but it’s already beginning to reshape the music industry. Take the metaverse, for example. ‘Metaverse’ is about as slippery a term as ‘web3,’ and different companies have offered different definitions and visions of this virtual space. But however you choose to define it, it’s clear that the metaverse has opened up a vast new horizon of possibilities for musicians – not only creatively, but also in terms of how they connect with fans.
“The biggest keyword when it comes to music in the metaverse is accessibility,” Ben Ferguson, director of operations and marketing at Soundscape VR, a company that’s working with artists to build customized virtual experiences, recently told The Drum. “Think about it – what’s the cost to go to Bonnaroo? On a bare-bones budget, you could be out of $1,000 to $2,000. That’s a big chunk of change, and suddenly that music festival event becomes that one tangible thing that you can afford to do ... [but in the metaverse] anyone around the world that has access to a [VR] headset can open up an entirely new world of entertainment.”
Ferguson also points out that the metaverse can provide artists with a less painful alternative to the rigors of spending months on the road for an IRL tour. “From the artist’s perspective, I think that’s really exciting,” Ferguson says. “Especially when you look at artists who have been road warriors their entire life – they’ve gone out, they’ve made their living on performing at festivals or performing shows, and they’re getting to that point where maybe the body can only take so much. It really takes a toll. [Artists might find themselves thinking] I’ve still got a rabid fanbase, I still need to produce content and put stuff out for them, but I’m just not into spending months out on the road, away from my family, away from home, living out of a suitcase. The solutions in VR then become another paradigm-changer.”
‘Control’ is another keyword at the heart of the music industry’s gradual transition to web3. In the past, control has largely been in the hands of record executives and other industry bigwigs, often to the chagrin of artists. The young, talented, naive musician signing a significant portion of their future income away to some money-grubbing label at the outset of their promising career has become something of a trope within the music industry. But web3, as some of its proponents are quick to point out, can make contracts much more transparent, trustworthy and less prone to legal vagaries or other fatcat fuckery that can get artists into trouble. “Blockchain removes that, because ultimately you have a public ledger, you can see everything, you can see who owns what [and] you can claim it effectively,” says Jake Murphy, co-founder of Ape In Records, a company that’s leveraging crypto to empower emerging artists.
The opportunities and challenges that lie ahead
Blockparty is another company that’s working to empower artists with web3, specifically with NFTs, which the company’s chief executive Vlad Ginzburg calls “the mainstream use-case for crypto.”
“We want to make sure that ... the artists are in control of their minting process [and] in control of their contract,” Ginzburg says. “We want to make sure that their collectors have meaningful ownership and meaningful access.”
Blockparty recently announced a partnership with Lively, a platform that was founded during the pandemic to enable artists and creators to virtually connect with their fans. That includes, according to Lively co-founder Alicia Karlin, “one-on-one lessons, meet-and-greets, album listening parties, private DJ sets – really anything that you could think of to monetize your time and make up for lost revenue during the time when it was really scary for musicians.” Lively began tapping into the NFT market as a potential revenue stream for its customers when Marc Brownstein, the company’s other co-founder and bassist for The Disco Biscuits, saw a tweet posted by a fellow musician comparing his income from streams to that from OpenSea, a major NFT marketplace. The latter vastly overshadowed the former.
“It was just a huge eye-opener for a lot of artists who instantly can see there’s something going on here in the web3 space,” Brownstein says. “Artists are having a moment.” To Browning, NFTs began to look like a powerful tool that could help artists to regain control of their careers – and rekindle a flourishing connection with their fans – during a time when it was beginning to look like the light of the music industry could be snuffed out, at least temporarily. Music IRL might have been put on hold, but music on web3 was just being born.
Education remains a major barrier to musicians looking to break into the web3 space. NFTs, Ginzburg insists, are simpler than most people believe; he describes them as tools for “using decentralized databases to have proof of ownership that is 100% provable.” And yet Browning himself admits that it took him something like six months to get fully set up with a digital wallet after he received his first NFT as a gift. “There was a lot of steps [and] it was a clunky process for onboarding,” he says. One of the core goals of the new partnership between Lively and Blockparty is to mitigate that education barrier by simplifying the onboarding process for musicians.
Ginzburg also says that NFT drops should not be treated as a cookie-cutter sort of a strategy; each one should be uniquely tailored to the creator’s unique goals and audience. “We want to encourage creators to distill their creativity and its impact on their communities, and think about: ‘how can I confer more agency to my audience, and what do I hope this NFT causes my audience to do? ... It’s being a value add, doing something creative, adding to the web3 space and taking agency in what you hope to happen with your community.” Similar possibilities exist within the metaverse; platforms such as Soundscape VR are beginning to work directly with artists to develop virtual experiences that are customized to each artist’s vision and existing fanbase.
Perhaps the most remarkable aspect of this new web3 music scene is the speed at which it has grown. Just a few years ago, web3 was extremely niche, bordering on esoteric. Now it’s approaching mainstream status, a promotional, PR and profit strategy, which – like social media – could eventually come to be regarded as essential for any serious musician’s livelihood. There’s a long way to go, many experiments to be performed, and a lot more money to be made – both by artists and their web3 expert guides. As Karlin says: “There’s just so much opportunity ... we’re just seeing the tip of the iceberg of what is going to develop here.”