Creators and artists, in their various forms and disciplines, play a vital role in shaping the world and contributing to the richness of its culture. Culture, you see, is very important. In great part, it’s tied to our identity as individuals. Who we are in relation to our family, friends, work environment, the country we live in, and the entire world around us. It ties our collective values around social activities and everyday interactions without us even noticing it. Without culture, we can easily lose our way as we are deeply social creatures who simply can’t live siloed from each other.
In this context, Artists and Creators are essential in our everyday life as they, simply put, bring us together. They bring forth new ideas, challenge existing norms, and inspire us to see the world from different perspectives through their work. They enrich our lives, spark our imaginations, and shape the narratives that define our collective human experience.
Artworks such as songs, paintings, gifs, memes, videos, photographs, sculptures, films, and so on, predominantly made by creators, artists, and other creatives, are what I like to call the medium of emotional exchange between them and the people when words fail to transcend reality people need to grasp. To me, music is particularly interesting because it breaks the language barrier. It successfully communicates emotions, where certain sounds tend to cause the same emotional responses in every human being alive. That’s like magic to me.
Anyway, if I tried to describe my level of addiction to music I’d have to use words like heroin and sucking dick so I won’t do that. But I need you to trust me and understand when I tell you that music is a source of inspiration, motivation, and life itself for me. Hence my interest in Music, especially in the Web3 world which brings a ton of innovation and levels the playing field allowing for more artists and creators to flourish.
Let’s take a look at how Web3 Music is slowly shaping the world for the better by fundamentally changing the underlying operating infrastructure.
Known problems in Music Biz
Next to my personal experience, the stories I’ve read over the years, and things I’ve heard from others, I did a ton of research for this article. I came to the conclusion that the music industry faces several significant challenges, many of which have been prevalent for a long time.
To name but a few…
1. Limited Artist Revenue
Artists often struggle to earn a sustainable income from their music due to various factors. The traditional music industry structure involves multiple intermediaries, such as record labels, distributors, and streaming platforms, which take a significant portion of the revenue generated. This results in artists receiving only a fraction of the earnings from their work.
Limited artist revenue or by now commonly known as the “we can so fuck you why not take your money” tax, describes the reality we live in where there are a few centralized players that have a monopoly in the market and charge ridiculous fees. The most common examples are Apple’s store charging 30% commission on the purchase price, Uber and Lyft charging 20-30% of the fare amount, and so on.
For music specifically, it’s pretty much common knowledge that Spotify and other major music streaming services are peeling the skin off of musicians by paying them as little as 3 sprinkles of fairy dust per every 74 billion song plays… more or less.
How about this though, according to Coinbase’s findings: “The music industry makes billions every year, but artists only get 12% of that.” Let’s take a second to imagine if average workers paid 88% tax on their income like the musicians kinda do. Ain’t that little nuts? Or maybe this 👇
Selling 25 Music NFTs at 0.1 ETH pays more than a million streams on Spotify.
Let that sink in.
Let that sink in.
4,197
We should stop here (for now) to prevent the progression of our state of depression.
2. Copyright infringement and piracy
The ease of digital distribution has led to uncontrolled piracy and copyright infringement, causing substantial financial losses for musicians and artists in general. Unauthorized downloading, streaming, and sharing of music through various platforms have made it challenging for artists to protect their intellectual property and receive proper compensation for their work.
As someone who comes from a third-world country not only that I witnessed this, but there are numerous artists in our country that have sung in their songs (predominantly sarcastically) about this phenomenon.
“Not only that, but up until I was 18 years old I thought going to Pirate Bay and downloading shit was a normal thing, you know… something that everyone just does in the world”, said one young man who I once knew. I may be semi-piracy-oriented when it comes to education, the availability of resources, piracy in transparency, and quality public goods, but I do condemn unauthorized use of others’ lives work!
3. Lack of transparency and fair royalty payments
Royalty payments have long been a complex and opaque area in the music industry. Artists often face challenges in understanding how their music is being monetized and how royalties are calculated and distributed. Lack of transparency and outdated systems can result in delayed, inaccurate, or unfair payments to artists.
Here are a few examples of real-world situations where royalties in the music industry have been poorly handled and have caused...
Taylor Swift's Royalty Dispute with Apple Music: In 2015, Taylor Swift publicly criticized Apple Music for its initial decision not to pay royalties to artists during its three-month free trial period. Swift's open letter to Apple resulted in a change of policy, but it highlighted the power dynamics between artists and streaming platforms, and the need for clearer royalty structures.
Mechanical Royalty Issues: Mechanical royalties are paid to songwriters and publishers for the reproduction and distribution of their compositions. The music industry has faced challenges in accurately tracking and distributing mechanical royalties, particularly with the rise of digital streaming. This has led to lawsuits against major record labels and streaming services for underpayment and inadequate reporting of mechanical royalties.
Sampling: Sampling involves using portions of existing songs in new compositions. The process of obtaining proper clearance and licensing for samples can be complicated, leading to disputes over royalties and copyright infringement. Famous cases like the "Blurred Lines" lawsuit involving Robin Thicke and Pharrell Williams, or the dispute over the use of the "Amen Break" drum sample highlight the complexities of handling royalties related to sampling.
Collecting Societies mismanagement: Collecting societies play a crucial role in managing and distributing royalties to artists, composers, and publishers. However, there have been instances of inadequate transparency and accountability within these organizations. Some collecting societies have been accused of delays in royalty payments, inaccurate tracking of usage, and a lack of clarity in their distribution methods.
YouTube's Content ID System: It was designed to identify and manage copyrighted content on the platform, and has faced criticism for its handling of music royalties. Some artists have reported instances where their original compositions were incorrectly flagged as copyrighted by other entities, resulting in the artists themselves facing restrictions or losing revenue from their own content. These issues highlight the challenges of accurately managing and distributing royalties in the digital age.
And God knows how many more individual cases are out there when it comes to artists who, unlike Pharel, Robin, or Taylor Swift, don’t have millions of followers or the same amount in their bank account to pursue legal action when mistreated.
4. Imbalanced power dynamics
The music industry has historically been characterized by imbalanced power dynamics, where artists have limited control and leverage over their careers and creative decisions. Record labels and other industry entities have held significant control over contracts, marketing strategies, and artistic direction, potentially exploiting artists in the process.
Even Prince was annoyed
The Prince himself fought numerous battles with record labels over his career, often related to royalty payments and creative control. In 1993, he changed his name to an unpronounceable symbol as a protest against his contract with Warner Bros. Records, claiming unfair treatment and insufficient compensation for his work. Prince's case shed light on the imbalanced power dynamics between artists and labels and their impact on royalty arrangements.
Record labels and managers and other players in the music industry will still exist, no one’s denying that. They will need to reconsider their offering and adapt to the new standards. And it’s up to us not to fuck up those new standards being made now.
5. Fragmented licensing
Licensing music for various uses, such as synchronization in films, commercials, or streaming platforms, can be a complex and fragmented process. Different licensing bodies, rights organizations, and territorial restrictions can create inefficiencies and challenges in obtaining licenses and ensuring proper compensation for artists.
Wait but why Web3, ser?
If I had to sum it up in a few words, blockchain technology pretty much solves all of the aforementioned issues and it certainly offers musicians numerous compelling reasons to embrace this new web3 music paradigm.
I’ll try to cover a few without boring you to death.
Direct Control and Independence
Web3 empowers musicians with total control and independence over their careers. By leveraging decentralized platforms, musicians can bypass traditional gatekeepers, such as record labels and distributors, and directly connect with their audience. This autonomy allows artists to make decisions aligned with their creative vision and retain a higher percentage of their earnings.
However, some people argue that an artist cannot fully immerse themselves into their craft while simultaneously having to worry about the ‘business’ side of things. So cutting out the intermediary, I foresee, will only play a role in the transition and distribution of power, melting the existing centralized music power structures that keep ridiculously big chunks of the market.
To elaborate further, there will still be ‘intermediaries’ but their reign over the music market will become a lot more decentralized, a lot more evenly distributed between themselves and other ‘players’ in the field who will engage in a web3 music industry. But we are not in the business of fortune telling, looking at cards or the beans to see the future, so we’ll just have to wait and build and see.
Fair Compensation and Transparency
Web3, in principle, leverages blockchain technology to ensure fair compensation and transparent transactions. Smart contracts enable automated royalty payments, eliminating delays and disputes commonly associated with traditional distribution models. Artists can track every transaction, ensuring they receive their fair share of revenue without relying on complex intermediaries. Don’t trust, verify.
As far as fair compensation goes, everyone thinks that musicians and artists will become millionaires. I don’t necessarily think blockchain will help you become a millionaire, it’s still up to you, your music, your charm, your talent, hard work, your charisma, but what I do know is that blockchain infrastructure and builders will give a fair chance to everyone.
This will result in a lot more creators and artists making a decent living, rather than the ‘everyone who’s in the web3 music will become a millionaire’ mindset. The law of natural distribution will still apply to artists making money. I’m just happy that a lot more of them won’t have to struggle. And kudos to those who actually become millionaires. Probably the ones currently willing, and crazy enough, to lead this revolution.
Global Reach and Access
Historically, artists faced challenges in expanding their reach beyond their local or regional scenes due to the limitations of traditional distribution channels. However, web3 music platforms powered by the blockchain offer a global reach that was previously unimaginable. Artists can distribute their music to audiences worldwide, regardless of their physical location. This means that talented musicians from remote areas or underrepresented regions now have the opportunity to showcase their creativity and gain recognition on a global scale. As a result, listeners can discover and appreciate a wider spectrum of music from diverse cultural backgrounds.
And not only that. Musicians can distribute their music internationally with greater ease. Platforms, websites, streaming apps, and mobile apps, that will be built and used for this type of distribution (or any other use of web3 music) will be plugged into the blockchain networks and have a single source truth to access musicians’ songs from thus creating a shared, publicly available and easy-to-use source that is fully transparent.
Enhanced Fan Engagement and Community Building
Web3 facilitates direct engagement and interaction between musicians and their fans. Artists can cultivate loyal communities and foster deeper connections with their audience through platforms that encourage participation, feedback, and collaboration. This level of engagement builds stronger fan relationships, fuels support for artists, and creates a vibrant ecosystem.
Surely, one of the most significant aspects to consider is that the Web3 music industry genuinely rewards early fans, contributors, ambassadors, and others who actively participate. It provides an avenue for innovation for builders, creators, and fans to collectively work on what they love and get paid for it!
Consequently, a lot of innovative opportunities arise for music connoisseurs to contribute to the ecosystem and create microeconomies within the industry. These opportunities include:
discovering and supporting emerging musicians,
sharing their music,
curating personalized playlists,
and engaging in other meaningful ways.
In this manner, music enthusiasts can play a more substantial role and contribute to the growth and sustainability of the Web3 music industry!
Tokenization of Music Assets
“Tokenization is the process of converting a real-world asset, such as a piece of artwork or a music right, into a digital token. These tokens can then be traded on a blockchain network. Tokenization offers many benefits, including fractional ownership, increased liquidity, and reduced transaction costs.”
Web3 enables the tokenization of music assets, unlocking new revenue streams and creative opportunities. Musicians can tokenize their music, offering fans unique digital assets that represent ownership rights, potential revenue share, exclusive content, and access to limited-edition merchandise or experiences. This tokenization revolutionizes monetization models, allowing artists to benefit from the growing interest in digital collectibles and blockchain-enabled assets.
Fractional ownership
Tokenizing music rights provides a significant advantage by allowing for fractional ownership. This means that several investors can own a portion of the rights to a song or album. This is particularly beneficial for aspiring artists who may not have enough money to fund their projects entirely. But it works both ways since the early supporters of those artists will be paid royalties for their early support.
Liquidity
Music rights are typically illiquid and hard to sell. Tokenized music rights can be conveniently traded on a blockchain network, granting investors greater flexibility and control over their investments.
Reduced bureaucracy
Buying legal rights, transferring ownership, verifying ownership, and so forth, can be time-consuming and quite expensive. Handling all of this on the blockchain, however, can be mastered and executed by a 9-year-old with a goofy sticker on their laptop.
Copyright Protection and Attribution
Web3's transparent and immutable nature provides robust copyright protection and ensures proper attribution for musicians. Artists can establish verifiable proof of ownership and track the usage and distribution of their work, safeguarding their intellectual property rights. This combats plagiarism, piracy, and unauthorized usage, creating a more secure environment for creators.
It's important to note one thing though - While the Web3 music industry holds great potential, it's important to recognize that it is still evolving, and challenges exist, such as navigating new platforms, understanding complex technologies, and building sustainable revenue models. However, many musicians and industry professionals are optimistic about the opportunities Web3 presents for a fairer, more empowering, and artist-centric music ecosystem.
Ecosystem Overview
With each passing day, the Web3 music industry evolves, drawing attention from investors, technologists, and music enthusiasts who recognize its potential to revolutionize the way music is created, distributed, and experienced. As the infrastructure and user adoption continues to improve, the Web3 music industry is on a path toward a sustainable and vibrant future, poised to reshape the music landscape for generations to come.
Just to name a few…
Audius: Audius is an innovative music streaming platform that leverages blockchain technology to empower artists and listeners with greater control and freedom.
Sound.xyz: Sound embodies the essence of music: a harmonious bond between listeners and artists. By harnessing web3 technology and embracing its principles, they are forging a platform that fosters a collaborative music movement.
Catalog: Catalog is a marketplace built specifically with the goal of reclaiming music ownership for artists, by using blockchain technology to redefine how music is valued, bought, and sold.
Royal: Royal is a marketplace co-ownership is put front and center, where fans can invest in music, earning royalties alongside artists.
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Market Overview
The global music industry is valued at around $26.2B. Do you know what this means, anon?? It means that Elon Musk alone could buy the entire global music industry 7 times over.
not bad..
But that’s not important right now, what’s important is that the entire NFT Music market, according to some stats from 2021, was valued at around $1.5B. It’s not super impressive, but given it came into existence less than a few years ago, it’s tip-top.
And when it comes to the total amount of songs minted as NFTs, that number tops at around $10M, according to different sources. However, this number can be debatable since the revenue generated is in ETH primarily and as we all know, ETH is very volatile.
Global Music Industry Stats
82.2 million Americans have paid music streaming subscriptions.
Independent record labels accounted for 31.4% of the world’s streaming and physical music sales revenue in 2020.
Spotify holds 31% of the total subscribers of the music streaming market, the largest portion of any streaming service.
Globally, there are 616.2 million people who have paid music streaming subscriptions.
Universal Music Group is the world’s largest record company, earning 32.1% of the global streaming and physical music industry’s revenue in 2020.
As of 2017, about 35% of internet users access music via copyright-infringing methods. (‘Skini ga slobodno’ - Vojko V)
Is the music industry growing you ask?
I’ll answer with a copy-paste of some stats.
*Worldwide, the global music industry’s revenue increased from $56.74 billion in revenue in 2019 to $59.45 billion in 2020.
In 2021 alone, the U.S.’s recorded music industry grew by 22.9%. US and Canada together had a 22% growth rate this year, up from their 2020 rate of 7.5%.
However, the Middle East and North Africa is the fastest-growing region for the global recorded music industry in 2021, with a 35% growth rate.
In the future (between 2021 and 2026), the global music industry is expected to have a CAGR of 8.5%.*
Some Web3 Stats
I pulled some interesting stats about Sound, Catalog, and Zora marketplace to showcase here. I chose these 3 for no particular reason other than I just like them. There are some others mention-worthy that pull some good numbers as well.
Disclaimer: I want to urge caution and not take these numbers as set in stone because the data varies from Dune query to Dune query and I have no idea how or why but it does. Also, I wrote this article weeks before posting it cos I’m busy af and periodically lazy. Check the resources at the bottom of the article for sources.
Sound.xyz Stats
483 total creators
1,604 total records created
123,241 total song mints
7.1 average song per collector
>2.7k ETH total volume (>$5M current ETH value)
3,961 people who currently own Sound NFT
7,420 people who own + owned Sound NFT
17,381 collectors on Sound
Catalog Stats
548 total creators
2,042 total records created
1,209 total records sold
>650 ETH (>$1.2M current ETH value) total volume
435 total collectors
Catalog primary trading marketplace is ZORA (3M volume)
420 artists who sold a record
The success rate of selling out is 77%
ZORA Stats
8,412 total artists
810,220 total collectors
3,615,604 total NFTs minted
11,543 total collections created
8,529 fixed-size collections
3,014 open editions
3,533 ETH total primary sales
144,588 ETH total secondary sales
Dusha Gang Dusha Gang
And now, boys and girls… I have to selflessly shill my sh*t. Not because I’m an egomaniac cursed and blessed to build forever, but because I’m as excited as a mermaid receiving a pair of waterproof shoes that I get to work on something I’m actually truly passionate about!
I’m working on putting together an all-star team of amazing people to build something in the web3 music space. I’ll dedicate a full article explaining what we’re building and what’s the underlying thesis that fuels our motivation.
For the curious-minded only: DolDusha, the valley of the soul, summed up in one Limited Meme-Edition Presentation.
You can join our Discord to share music, art, love, news, gossip, and vibes.
To conclude
Listening to the song is like taking a glimpse into the soul of the creator who has decided to let us in for a brief few minutes through their songs. We take a small part in their life and temporarily experience who they were. It is as personal as personal gets. And that’s why people who are great creator requires an insane amount of courage and bravery.
Someone once described artists as brave souls who stand alone and naked in front of the crowd and share the purest deepest part of themselves on a silver platter for everyone to consume… and I think it’s hauntingly beautiful because it hits straight to the point. (*I wish there was a painting bringing this description to life*)
To demonstrate the power and weight of what kind of relationship artists and creators have with their work and what kind of struggles they have to go through while creating, I give you an excerpt from one of the greatest speeches ever given by one of the greatest men alive, Nobel Prize winner, Ivo Andric:
“…But in the end, do not past and present confront us with similar phenomena and with the same problems: to be a man, to have been born without knowing it or wanting it, to be thrown into the ocean of existence, to be obliged to swim, to exist; to have an identity; to resist the pressure and shocks from the outside and the unforeseen and unforeseeable acts – one’s own and those of others – which so often exceed one’s capacities? And what is more, to endure one’s own thoughts about all this: in a word, to be human.
So it happens that beyond the imaginary demarcation line between past and present the writer still finds himself eye to eye with the human condition, which he is bound to observe and understand as best he can, with which he must identify, giving it the strength of his breath and the warmth of his blood, which he must attempt to turn into the living texture of the story that he intends to translate for his readers, in such a way that the result be as beautiful, as simple, and as persuasive as possible.”
Thanks and <3s
There are a lot of people I chat with, follow, look up to, and find interesting in this space. Below are some of the people who helped me and inspired me to kickstart this journey and write this article.
DolDusha team and the community
Coophatroopa
Water and Music
WavWRLD
MusicBen: ziggyzag
David from Sound XYZ
BoysClub for a cultural movement and I highly suggest their newsletter too!
Song Camp
Polygon with Everything Music
@0xjck from Momentify
@leo5imon from AmpyMP3
Resources:
Dunes and Drugs and Rock n’ Roll: