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Streaming services have made music more accessible than ever, yet controversies remain around creator compensation. Platforms and labels capture over 80% of streaming revenues while artists receive fractions of a penny per stream. This imbalance has sparked a movement towards decentralized distribution.
Across sectors — including publishing, software, fashion & consumer goods — the digitisation trend has tended towards creating alternatives that offer more equitable distribution of value (earlier in the value chain), not less.
E-books, direct-to-consumer digital tools/brands, and the open source software movement retract power from centralised platforms and intermediaries — redistributing the locus of control and ownership. Not so (far) in music.
Projects like Vault Music and Formless.xyz aim to change that by directly connecting artists and fans using blockchain technology. Vault Music, founded by FanDuel’s Nigel Eccles, wants to “turn true supporters into collectors” through tokenized music releases. Formless.xyz centers its model on instant, equitable payment flows using smart contracts in a “multiplayer digital economy”.
Streaming has revolutionised access, convenience, and distribution for music artists — particularly as a legal solution to the piracy of entities like Napster and Limewire. Yet centralised actors and intermediaries maintain control of curation, reach and price discovery.
Founder of Formless, Brandon Tory, suggests that:
The problems in the music industry are a small reflection of power law problem in society, 1% extracting 99% of the value.
1,000 True Fans is broken. With 8 billion people, and soon to be 300 million self-identifying creators, that model no longer scales.
Early data indicates that a new primitive is upending the status quo.
I’ve explored artists leveraging crypto-native mechanics, architecture, and frameworks to form new modes of interaction with their music and generate remuneration for their creative talents. RŌHKI earned over 100 ETH ($150k — $300k) selling musical NFT, while TK earned over $50,000 from a recent NFT drop.
Neither artists’ music can be found on streaming platforms today.
These initial signals of success have seeded significant investment in the sector driving new generation of artists, engineers, entrepreneurs and change-makers to experiment in a rapidly evolving landscape. Two such experiments have begun to show promise.
The multiplayer digital economy thesis is multifaceted.
The first aspect focuses on ownership and property rights. Digital smart contracts confer sovereignty to artists much akin to the privileges we take for granted in the physical world. As proof of their impact his recent experiment was to offer up those rights, for free, to the public. A hundred splits in total, with 80% of the income of the release to the community. He set his own price, got paid instantly, and revenue share was trustlessly executed on-chain.
35 free splits were claimed in minutes, first come first serve, live during a Twitter space with 194 attendees. Within the first 24 hours, the song generated $160 in revenue on 100 streams. The revenue was generated by customers paying $7 for 3 days access to the song. Top streaming platforms today pay around $0.003 per stream, meaning this release achieved a 500X increase in revenue generated vs. those streaming platforms. And, since payments were instantly received at the time of each transaction, the speed at which I received the revenue was 200X faster. Within 12 days, the song generated $700 in revenue (an additional $540 after the first day), and 60% was distributed across all people participating in the splits — that’s $420 in passive income for the community.
This implies a redefinition of the dynamics of digital rights management and revenue sharing, offering a glimpse into a future where creators and consumers co-own and benefit from an array of digital properties, expanding the array of dynamics in the creator-consumer relationship that are possible.
The second aspect of the thesis centers on purpose and participation.
Platform incentives and machine learning algorithms reduce active fan-artist relationships into passive consumption driven commodities. Yet human nature shows we thrive via multidirectional communities united by shared goals.
The multiplayer thesis invites would-be passive listeners into collaborative participation. By sharing value creation, their purpose elevates from consumption to contribution. Not just benefiting from artists’ creativity but fueling it.
This collective-action creates a bedrock of digital rights allowing authentic identity and communal bonds to flourish online. When codified into self-governing smart contracts instead of on centralized platforms, the substrate exists for genuine digital societies to emerge.
Formless is powered by SHARE protocol on Polygon and just announced a $2.2m pre-seed funding round. The second ever split is now live featuring award winning producer anatu, the dojang record label co-owner behind hit songs like Sugar and Bleach.
https://x.com/anatuuuuuu/status/1735643101111189559?s=20
Bella Rose and Sum Sun are representative of a new wave of artists embracing NFTs, without necessarily being entrenched in crypto culture. They are leveraging Vault Music’s app, fiat on-ramps, and focus on ease of use to open up web3 modes of interactivity to mainstream music fans.
https://x.com/vaultmusichq/status/1717186408589168717?s=20
Whilst their bread and butter is enabling fans to collect limited-edition music, directly supporting artists, the platform is leveraging previous experiences of its founders to bring gamification in the form of fantasy music management to the space.
Formerly founders of FanDuel — the popular fantasy sports platform that allows users to participate in daily or weekly contests for real money sold to Betfair for nearly $500m: the team recently launched Vaults music fantasy manager (beta now open to the public).
Cash prizes weekly of $1,000 are payed out to participants who are able to select from a roster of artists that collectively have the most growth in follower counts on streaming platforms over the course of that week.
https://x.com/vaultmusichq/status/1733136539536793856?s=20
Bella Rose, a rising pop musician based in Nashville has opened for acts like Ringo Starr and played SxSw. In September 2022, she made her debut in the world of NFT music by minting her first single, “80 Proof,” on Vault Music, selling over 150 editions and generating more than $750 in primary sales revenue.
https://x.com/vaultmusichq/status/1683560397327024131?s=20
Perks/benefits for collecting “80 Proof FT. ROXO” included:
Voice memos writing the song
Handwritten lyrics & BTS photos
An in app track stem player + downloads!!
An exclusive first-listen to “Felt Like” before it hits streaming services. Exclusive to “80 Proof” holders and New Music Tuesday (a Vault Music tradition) Collectors on 19th September 2023.
Nashville — March 31st
Instagram — 2k followers
Twitter — 40 followers
Tik Tok — 3578 Followers 584.7K Likes
Spotify —87k followers
Sum Sun, the electronic pop duo comprising Nick Benton and Ilan Pomerance, have over 1 million cumulative streams; receiving acclaim from industry icons and publications like Travis Mills, People Magazine and Rolling Stone. Actively touring, their Live At Brooklyn Monarch DIGITAL EP sold 75/100 NFTs at $10 for their debut drop on Vault: $750.
These collectibles offer returns an order of magnitude greater than streaming, and add a new alignment dynamic to the fan-artist relationship. Their recent medium article summarises the ecosystem they seek to build to arrest inequities prevalent in streaming models based on three pillars:
a primary market for limited-edition music releases
a secondary market for trading editions
a fantasy record label game stimulating the markets and rewarding fans for investing in artists.
https://x.com/vaultmusichq/status/1734263734963515620?s=20
Vault raised $4m in funding and is currently in week 5 of the fantasy record label beta (19/12/23). Track artists progress on this handy spreadsheet.
These new alternative distribution models are reaching an inflection point.
Early pioneer artists and collectives like Songcamp have already earned over $750k selling limited musical NFT editions as an alternative to streaming services. Formless facilitated over $700 in revenue for artist Brandon Tory’s “Money Can’t Buy Love” release in just 12 days. Plus 60% distributed to fans as passive income. This initial traction signals how blockchain-based platforms can reroute value flows.
With greater wider adoption, made possible through initiatives like account abstraction, blockchain based music is poised to enable a power shift away from centralized corporate platforms towards artists and engaged supporters collectively controlling sustainability and reach.
https://x.com/gelatonetwork/status/1620131603208110082?s=20
In this new paradigm, direct creator-fan connections take center stage.
Projects like Vault Music and Formless leverage ownership dynamics where supporters become actively invested in new releases. Whether via collecting rare NFT album editions or claiming real revenue shares. This community ownership primes deeper artist loyalty and consumer participation in the creative process itself.
Expanding these experiments across millions of creators and supporters will compound the user-generated nature of web3 distribution. By allowing open contribution combined with equitable incentives, the platform intermediaries that dominate today will cede ground to decentralized models roadmapping a more engaged, energized, and collaborative music economy built on instant trustless exchange between artists and fans first.
The substrate now exists for mainstream musical migration to social tokens, NFTs, community splits and beyond — unlocking new creator potential. If current momentum persists, music in 2030 may bear little resemblance to the current streaming models of today.
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