(By Music Intelligence)
Web 3.0 urging for industry changes
Today, music streaming services are the most widespread ways for artists to share music and earn money. Such platforms provide whole legal infrastructure and intellectual property rights assistance together with a revenue model in a centralised-based approach (Yamwaja & Angsuchotmetee, 2022). However, with the arrival of Web 3.0, the possibilities for both musicians and listeners may revamp.
In fact, Web 3.0 isn’t just a buzzy word. It unites a wide range of new Internet applications like cryptocurrencies, decentralised autonomous organisations, NFTs and metaverses, that are being created with blockchain technology (Murray et al., 2022). In relation to the music industry, blockchain-based streaming platforms like Audius, OPUS, Choon, and others already give musicians more control over their music, ensure transparency in royalty distribution, increase revenue for musicians and bridge the gap between musicians and audiences. Moreover, the volume of music NFTs is hitting millions of US$, while established music platforms are stepping into the world of metaverses and trying to adapt to the new Internet realities. So, how is Web 3.0 altering the future of music streaming?
Blockchain-based streaming platforms and music NFT
Web 3.0 and decentralised blockchain technology are currently solving some of the biggest problems related to the current Web 2.0 streaming music platform. The music streaming industry noticeably needs more transparency, better rights management and fair revenues for artists. Blockchain can be the solution. It is a decentralised, open-source database that enables data stored on it to be transparent, immutable, and traceable. As for NFTs, they are non-interchangeable tokens recorded on a blockchain. They represent a crucial step in the evolution of digital music ownership since authenticity and verifiable ownership of digital assets are no longer dependent on a third party (Murray et al., 2022).
Applying decentralised blockchain technologies and NTFs allows artists to design their royalty fee model and get paid promptly, equitably, and independently, as well as to approve and manage their own music rights (Chavan et al., 2019). For example, Royal offers a platform where listeners can buy a portion of the royalties from an artist, turning listeners into investment partners. A Royal user can purchase these royalties as tokens and keep them for themselves or sell them on an NFTs market. One more example is Probably A Label, a new type of record label aimed at redefining IP ownership in the music industry.
Step to a metaverse
Another significant manifestation of music streaming platform brands, entering and connecting to the Web 3.0 world, is metaverses (Murray et al., 2022). A distinctive example is Lil Miquela artist on Spotify. Simply put, Miquela is an avatar produced by computer programming. This anonymously created next-generation influencer, who is nothing more than code, has already amassed a sizable following base. So, the creation of virtual talent on the music platform uncovers the musical metaverse experience for Spotify's large customer base.
However, the metaverse in the music streaming industry can be more interactive. Thus, the COVID-19 pandemic restricted offline concerts but encouraged a series of globally famous artists such as Travis Scott or Lil Nas X concerts in the metaverses of Roblox and Fortnite. Having the technical and conceptual capability, continuing trends for virtual concerts could have a fruitful symbiosis with traditional music streaming leaders enabling attending the concert from anywhere on the earth. Thereby, both customer experiences can be enriched and music streaming can obtain a new approach to value proposition and monetisation.
To sum up, Web 3.0 has the potential to alter the music business and artists’ careers by preserving their musical works on the blockchain and proving their ownership. Blockchains are creating a new economic model where artists are getting paid and saving their intellectual property, while fans are getting rewards. This new business model allows creators to reduce problems associated with musicians earning low rates from centralised music streaming services. Even though this industry is still far from sustainable, these tools can completely alter the music industry’s current business model and revolutionise the industry model.
Established music streaming platforms should address their solution of integrating Web 3.0 not by redefining how people listen to music, but by highly elevating the experience in which people consume it and collaborate with artists.
Chavan, S., Warke, P., Ghuge, S., & Deolekar, R.V. (2019). Music Streaming Application using Blockchain. 2019 6th International Conference on Computing for Sustainable Global Development (INDIACom), 1035–1040.
Murray, A., Kim, D., & Combs, J. (2022). The promise of a decentralized internet: What is web 3.0 and how can firms prepare? Business Horizons. https://doi.org/10.1016/j.bushor.2022.06.002
Thomas, L. (2022). The Music NFT Bible: A Guide to the Future of Sound, Nft Now, Available Online: https://nftnow.com/guides/complete-guide-to-the-nft-music-ecosystem/ [Accessed November 11, 2022].
Yamwaja, S., & Angsuchotmetee, C. (2022). DMS: An architecture of a decentralized-based music streaming platform using blockchain. 2022 37th International Technical Conference on Circuits/Systems, Computers and Communications (ITC-CSCC). https://doi.org/10.1109/itc-cscc55581.2022.9894878