Web3, popularly referred to as the future of the internet, is a more democratic and inclusive version of the World Wide Web. Not only does it accommodate the concept of blockchain, NFTs, DAOs, decentralized finance, and more, it allows users to have a financial stake in it and have control over the web communities in which they want to take.
Equitability is something that the new age web communities value a lot. The fairness that the presence of blockchain brings to Web3 is making it grow faster than what one could have imagined a few years back.
Estimates suggest that the attempts to build an internet that is trustworthy and free from the risks of being monopolized will help the Web3 market grow at a rate of more than 40% in the coming years, at least till 2030.
Such levels of growth can only come from widespread and diverse adoption of Web3 by a diverse range of people and practices. The world of music would be no exception. The most effective platform for any sort of music to reach out to the maximum of its potential listener base has been internet-based for quite a while now.
How does Web3 add value to those avenues of spreading out to millions and millions of listeners? That’s what we will try to discover.
‘Full of Sound and Fury, Signifying Nothing’
The music industry has never experienced a dearth of talent. Yet, with each passing day, the industry has been shrinking in terms of its dollar value. According to the most recent numbers available, the size of the music industry has dropped to US$20 billion, while the gaming industry is 10X of its size. Why this disparity? Especially when music and games are both forms of entertainment consumed electronically over internet-based platforms.
Well, the problem has been structural and deep-rooted. Yet, if we are to explain the issue briefly, it is the lack of monetization opportunities. Earning revenue from music hosted on the internet has been difficult for most artists. The earnings are concentrated at the top, where those recognized as stars make most of the money, leaving very little for the rest.
According to the latest numbers available for Spotify, one of the most well-known music platforms online, the top 1% make US$4,000 per month on average. However, it is only $12 for the rest of the 99%. Can Web3 resolve such high levels of income disparity?
Inclusivity, Equitability, and Easy Access: All Without a Middleman
Earning royalties or even first-time payments from the music industry has always been a tale of convoluted channels and heavy-handed intermediaries. From agents to recording studios to music labels to concert organizers, an artist’s life has remained riddled with the presence of brokers/intermediaries.
One expected the internet to be free of these bottlenecks, yet the physical world trend persisted. While there are services like Spotify and Apple Music, the money they pay their artists is typically less than one cent per stream. Unless an artist has millions of listeners, earning substantial revenue from making music is next to impossible.
The presence of blockchain-based Smart Contracts would nip this problem in the bud. These Smart Contracts will allow platforms and applications to pay a royalty to the artist when the scope for such a payment arises. The process will help weed out non-value-adding intermediaries from the process who have no role other than facilitating a transaction.
Enhancing the Experiential Value and the Process
Metaverse music platforms have the potential to make listening to music an event where fans and audiences can enjoy each stage of production with increased levels of participation. For instance, dropping a track can become an event in itself to celebrate, where exclusive participation results in well-trusted and secure revenue streams.
The ability to build tokens specific to an event, an opportunity that blockchain allows quite easily, may help fans of an artist to express their love and affection in more meaningful ways.
Joint ownership of tokens may also ensure rewards proportional to one’s participation. If a fan is making significant contributions to the making of a track, blockchain ensures that rewards or revenue streams benefit her too.
Web3 also ensures that artists are not deceived by the organized network that runs piracy and unauthorized republication of content. Each time a piece of music runs anywhere on the internet, the artist would become eligible to earn a royalty. The same level of guarantee applies to the buyer of the music. Once someone buys it, there is complete trust that the buyer is the sole owner and uses it across the internet.
Altogether, Web3 has the potential to transform music into a profitable enterprise where all stakeholders would benefit in every possible way.