HashKey Capital: Explore the possibilities and development prospects of Web3 music

Abstract: The Web 3 music track has now attracted the attention of capital and the community. According to incomplete statistics, from 2021 to the present, the financing amount of the Web 3 music project has exceeded 200 million US dollars, and the ecology has also grown stronger. In this survey, we interviewed Chen Huanren, the first Chinese-speaking musician who issued NFTs, and started with the traditional music industry to explore why we need Web 3 music. The main reason is that under the traditional music model, artists are paid too low, and the industry chain is complicated and opaque. The entire upstream and downstream of Web 3 music includes: upstream creation and generation of music, midstream trading platform and downstream streaming media, in addition, there are other directions including copyright and record DAO. Finally, we discussed the possible problems in the future development of Web 3 music, including the complexity of off-chain royalties on the chain, the short business chain, the lack of visual impact and application scenarios, the lack of IP and traffic, and the weak token economic model.

one. Why do we need Web 3 music? – The allocation cannot be reasonably resolved

On Spotify, the world’s largest streaming platform, artists receive $0.003–$0.005 in royalties for each broadcast. The founder of streaming royalty collection agency Audiam said that despite the growing number of Spotify users, the royalties paid to artists are increasing substantially. Down, the decline in royalties has already started in 2013.

  • The bifurcation of royalties is serious. There are 8 million musicians who upload songs to Spotify, about 60,000 new songs are uploaded every day, and 99.3% of the artists have an annual income of less than 10,000 US dollars.
  • Artists earn low income. The 10,000 US dollars cannot all flow into the pockets of artists. The music industry chain is extremely complicated and opaque. After passing the downstream streaming media, there are still large record production companies, record distribution companies, and artist management companies that share royalties upstream. And agency distributors, the royalties that end up in the hands of musicians are very small.
  • Black Box Royalty. Because there is no simultaneous disclosure of the relevant subjects of the music industry chain, about 655 million black box royalties will be generated every year. Chen Huanren also pointed out that in recent years, people have believed that music is a free product. In addition, the royalty income often does not reach the core creators, and more than half of the musicians’ income does not reach the minimum wage level.

Music NFTs can solve the troubles of income, fees and fan circle establishment for artists:

  • NFTs directly generate revenue. Imagine a not-so-famous independent musician sells a music NFT worth 0.1e on the platform, which is equivalent to 67,000 plays on Spotify, which is often unattainable for niche independent musicians . This money can be used as the income of musicians, so that the creation of musicians is no longer to generate electricity for love.
  • Establish follow-up start-up capital. In addition, selling music NFTs can also be regarded as a fundraising behavior for future music products and plans, which saves time and effort compared to the traditional millions of market research and marketing expenses.
  • Form a positive interaction with fans. Artists can in turn create better works to give back to investors and the community. A closed-loop effect is formed between fans and artists. Chen Huanren also pointed out that fans often support not only music, but the artists themselves. It turned out that artists uploaded their own music for free on streaming media and gained a pan-fan base, but it cannot be quantified, and there is no difference between fans. It is a one-to-many model. With NFT, “loyal fans” who have invested in music can share The rights and interests of the artist’s growth are rewarded and valued by the artist, and the relationship between the two has become one-to-one.

two. Web3 music industry chain – complete and traditional, in the exploratory stage

The main tracks of Web3 music include: 1) upstream creation; 2) midstream transactions; 3) and downstream streaming media playback; 4) others include the music community and record DAO, copyright, and fan economy. The whole track is still relatively early. Taking April as an example, the monthly trading volume of the OpenSea music sector is about 4 million US dollars (the most active 40 music NFT addresses), and the Audius market cap with the largest market value is about 320 million US dollars. , FDV is about 500 million US dollars, financing activities are mainly concentrated in seed rounds, and some projects have not been funded.

2.1 Streaming Media Streaming — the traffic portal for fans

As mentioned above, in the traditional streaming media model, streaming media, as a third-party platform, is between artists and fans, and the artist’s remuneration is relatively meager, while Web 3 music streaming media has a strong decentralization color. The most representative project for content creation and revenue realization is Audius.

2.1.1 Audius — Decentralized Music Portal

Low participation threshold: Audius retains the shadow of traditional Web2 music streaming, and is relatively friendly to Internet users entering Web3. The platform does not require users to have a decentralized wallet, just log in by email, and after the user logs in, if there is no metamask, the platform will automatically assign a Hedgehog AUDIO wallet address, and the usage process of the entire web page is very similar to that of traditional players, such as Like and forward songs, create playlists, upload music, follow favorite creators, etc. The user experience is relatively smooth, the threshold is low, and all functions are free, which is one of the reasons why Audius can accumulate relatively more in the Web3 music track .

Content attracts users: Most of the music on the platform is mainly electronic music, Hip Hop and rap, and the music resources are relatively rich. IPs include RAC, deadmau5, 3LAU, Skrillex, kennybeats, etc. Last year, the cooperation with Tik Tok was also officially announced. The number of active users of the platform reached a peak of 4.83 million in October last year, and has declined in recent months. At present, it is about 2.54 million, and there are about 25,000 currency holding addresses. It can be seen that most of the users are from traditional Web2. In addition, the project party has opened up the API, and other applications can also call Audius data. The API call this month has reached more than 100 million times. In the end, it is not ruled out that a common ecosystem of Audius and other third-party applications will be formed.

Strong ecology, weak tokens: The main function of the token AUDIO is to maintain content nodes and search nodes stored on IPFS, and to conduct voting governance. In addition, there are some basic incentive activities, such as rewards for creating playlists or releasing tracks. . At present, platform creators have no other effective revenue methods other than meager rewards, and uploading music does not need to be reviewed. Apart from operating and maintaining nodes, tokens do not have an effective incentive mechanism for content creation. This is what the platform currently exists. main problem. However, the advantage of Audius is that it has a decentralized vision, strong traffic, low threshold, and it has accumulated arguably the most users in Web3 music applications, especially from traditional Web2 music lovers. In the future, stablecoins will also be introduced to pay for content. , artists issue personal tokens and other models to generate income for artists, and the team plans to give 90% of the income to creators, 10% to nodes, and the platform takes zero commission.

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Audius

2.2 Trading Platform – Differentiated Empowerment

The model of the music NFT trading platform is basically the same as selling other NFTs, so other differentiated empowerment of the trading platform is the key for users to compare different platforms, such as the competition of traffic IP and the design of the token economic model.

2.2.1 Sound.xyz — Emphasis on social attributes

Every song on Sound.xyz can be listened to for free, but only a few users can buy it. The unit price is uncertain, about 0.1e, which is based on a 1 of many fragmentation model. The threshold is not high, and users can listen to the whole song. After the song choose whether to support the artist. One of the things that makes the project stand out is its social nature. As shown in the figure below, after users purchase music NFT fragments, their avatars can be displayed in Audience, and the higher up is the earlier supporters. In addition, each user can comment at a certain moment of the song, the artist will bury an easter egg at a certain moment, and if the user leaves a message at the moment closest to the easter egg, the user will receive a special NFT from the artist. What’s interesting is seeing the early backers of each piece of music.

At present, Sound.xyz is only available in the primary market, and the secondary market needs to go to OpenSea. Currently, a16z, FlamingoDAO, and The LAO have all invested in this project. In terms of business data, artists have earned a total of more than 2.1 million US dollars on the platform. There are 124 artists and 8,660 NFTs on the platform, of which Snoop Dog contributed 2,000 NFTs and issued a total of 2 series, accounting for 23% of all NFTs. %, raising a total of 200 ETH. The first release of the platform In December last year, the number of monthly new releases continued to grow, reaching a new record of 3,463 new releases in April.

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Sound.xyz

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Sound.xyz

Sound’s music NFT supply and new series:

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Dune Analytics

2.2.2 Catalog — returns proceeds to musicians

Catalog is a 1/1 music NFT trading platform based on the Zora protocol. All NFTs do not have mint copies and support auctions. So far, the total sales bonus is 3 million US dollars, 1311 NFTs have been mint, and 373 artists on the platform have already mint, 73% of the artists sold their works, with an average price of $3,450. The transaction volume peaked at $600,000 in October 2021, and is currently around $200,000, which is still relatively early. The Catalog platform basically does not take a cut. Artists get the income from the first sale, and the second income is shared. Artists can decide by themselves. It mainly supports independent and niche artists who have an understanding of cryptocurrencies. Delphi’s report pointed out that artists’ popularity on Spotify and Catalog The sales situation on Spotify is not very relevant. For example, Barbados rapper Haleek Maul sold a total of more than 100e music NFTs on the Catalog. His monthly traffic on Spotify is only about 4k per month, which also proves that NFTs can be effectively solved. The income of musicians.

Catalog monthly transaction volume:

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Dune Analytics

2.2.3 Pianity — a distinctive economic mechanism

Pianity is a music NFT trading platform based on Arweave. Both the primary and secondary markets are open, and the buying and selling methods include instant buying and selling and auctions. The highlight of Pianity lies in token incentives. In order to encourage transactions, Pianity also adopts transaction mining, but instead of simply brushing the amount, it adopts liquidity subsidy. The most NFTs purchased within a week, the most NFTs purchased in the secondary market, the most spent, the most The top three who frequently bid and invite the most new users can get PIA token rewards. The rewards are divided into three levels: 2000PIA, 1000PIA and 500PIA. In addition, the remaining users who purchased NFT on the platform will also receive rewards. The amount of PIA rewarded is the share of the total value of NFT on the user’s Pianity in the total value of all NFTs on the platform multiplied by the amount of PIA issued every week, thus encouraging players to purchase and collect. At present, PIA cannot be traded, and the price is 0.1U. In addition to purchasing cash back, another function of PIA is that token holders vote to decide which songs to put on the shelves, and the community decides which songs in the waitlist can be put on the shelves. Every day the first-ranked song can be minted into NFT, and the auditing power is delegated to the community. Effectively reduce the infringement problem of decentralized music platforms.

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Pianity

2.2.4 OneOf — Bring Your Own Traditional Traffic

OneOf is an NFT platform based on the Tezos network. The founder team of the platform has its own traffic, including the famous producer Quincy Jones. Currently, it has established partnerships with Warner Music, Grammy Awards, and iHeartRadio. OneOf signed three agreements with the Grammy Awards. Annual agreement to issue NFTs for the 64th, 65th, and 66th Grammy Awards. The platform has received the most attention for releasing an unpublished recording of Whitney Houston at the age of 17 for more than $1 million. The NFT gameplay on OneOf is very diverse. Musicians can issue NFTs on the platform. Different NFTs have different gameplays, including fan benefits, blind boxes, levels, collection and exchange, synthesis, etc. It is basically the logic of selling collections, and there is no player. The platform needs to do KYC, all NFTs are priced in US dollars, and credit card purchases are supported.

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: OneOf

2.2.5 Mint Songs — Strong Investor Resources

Mint Songs is a platform built on Polygon to help creators mint music for free, album poster NFTs, and build a Web3 fan community. After artists mint music NFTs for free, they can sell NFTs in the platform’s marketplace. The first sale can get 95% of the revenue, and the second resale can receive 10% of the revenue. All music NFTs are stored on IPFS. These posters and music NFTs can be airdropped to the artist’s community for free, and there is also a dashboard for artists to analyze their own works and community conditions to help artists manage the community. At present, the business model on the platform is mainly simple mint songs and transactions. The community building between fans and musicians is still very early. The number of Twitter followers of the top seller artists on the platform generally does not exceed 1,000, which belongs to relatively small music. people. Mint Songs completed a $3 million seed round in December last year, led by Castle Island VC, with participation from Coinbase Ventures and IOSG Ventures, which will be used to continue to grow the team and develop community management tools for artists.

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Mint Songs

Overall comparison, each music platform has its own highlights: including Sound.xyz’s strong social attributes and fragmentation model; Catalog’s 1/1 sales form of complete singles; Pianity’s token incentives; Mint Songs’ investor resources; OneOf music resources and traffic.

2.3 Secondary creation/generation of music — the creative source of Web3 music

Secondary creation means that users can create based on the music resources already on the platform or uploaded by other users, and the platform provides creation tools. Generating music is also a branch of the upstream creation of Web3 music, that is, players can buy or collect a single track and combine it into different music. The introduction of music units can increase the leverage of the entire music creation sector. Refer to the gameplay and diversity of PFP NFTs to provide music The track brings more imagination.

2.3.1 EulerBeats — the main algorithm to generate music

The algorithmic music platform EulerBeats has developed three series of music NFT series: Genesis, Enigma and Futura. Here we mainly discuss the third series, Futura. Although the first two series are also algorithm-generated music, they mainly focus on Web 3 music. There are some interesting ways to play around with copyright.

Futura’s model is to first issue 4040 Mixpass NFTs, each Mixpass NFT holder can generate two Mix NFTs, and each Mix NFT has a randomly generated cover image and music. Music has a total of thirty attributes. of different rarities. The maximum number of Mix NFTs is 8080, and a total of 5423 have been exchanged now.In addition, the EulerBeats team has also created 11 Master NFTs. All Master NFTs and Mix NFTs are for future users to mix. The mixing is called Remix NFT. Two input sources can form a Remix. The mixing process will In Remix Studio (not yet live, what mixing tools are there and how to mix is ​​unknown). In the future, EulerBeats will also introduce Clips that represent different Stems in Mix music. Users can purchase individual Clips. In the future, if Clips are used in mixing, Clip holders will get a commission, but they are not online yet. Know the specific mode of extraction.

Other similar second-generation projects include Melos. The main mode is that users can use the music NFTs uploaded by other users on the site to modify and create second-generation music to form Gen 1 music NFTs (the original author’s version is Gen 0).

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: EulerBeats

2.3.2 Async.Art — highlighting the composability of music

Async.Art divides the music into different tracks (ie Stem), combined with the way of PFP to generate art, buyers can buy a single track NFT and choose the status of Stem (Variant), and then the status of the master’s ontology music will depend on Every Stem owner. As shown in the figure below, MozartBeats has a total of four tracks, each track has five states, and 625 different kinds of music can be combined. Other participants can record music in different states by purchasing blank disc recordings. The discs are divided into platinum discs, gold discs, and silver discs. The rarity is different but the functions are the same. After the recording, they can be sold in the secondary market. In the future, composable music may introduce elements such as rarity and secondary creation, and have more diverse gameplay, rather than the sale of a single music NFT, and collecting a single track or layer may also be another collection strategy.

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Async.Art

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Async.Art

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Async.Art

2.4 Royalties/Fan Economy – Musicians and fans have a positive interaction

The main gameplay of Web 3 music royalties includes the issuance of limited-edition NFTs of rare original discs similar to vinyl records. In the process of reproducing the original discs, the holders of the original discs can continue to make profits. The other is to distribute the offline royalty income of the artist to the fans proportionally, which is the logic of crowdfunding for the artist, which is equivalent to the fans investing in the artist and sharing the results. This also leads to the concept of the fan economy. Fans have changed from traditional consumption to investment. They have formed a cooperative relationship. Artists have also gained more effective fans. In addition to sharing royalties, there are also other benefits that need to be honored.

2.4.1 Eulerbeats

The first two NFT series of Eulerbeats, Genesis and Enigma, have certain reference for the copyright gameplay of music NFTs. The core idea is that the holder of the original disc has the commercial use right of the music. Mint and buying the re-engraved version are equivalent to investing in the original disc. The more people buy copies, the higher the value of the original and early copies, and the holders of the last copy and the original will form a community of shared interests.

Both Genesis and Enigma have 27 original disks (also called LPs), and the metadata and music files of the 27 original disks are stored on the Ethereum chain. The price of the original Genesis disk is 0.271E, and the original Enigma disk is auctioned on OpenSea , Genesis original disk can be copied 119 copies, Enigma original disk can be copied 160 copies. 8% royalties on copies of Genesis and Enigma go to the original owner. The price of the two series of copies is related to the supply quantity of the copies. The formula of the bonding curve is f(x)=a(b+x)+cx+d, and the values ​​of a,b,c,d of the two series are different. As can be seen from the price and supply curve, the cost of the replica version is very low in the initial stage, and by the time of the last replica, the price of Genesis is expected to reach around 721e, and the price of Enigma can reach around 53e. Taking Genesis as an example, only LP01 has minted 61 copies, and the mint price is about 4.7e. The rest LPs have minted about 30 copies, and the price is around 1e. All the royalties of Genesis are 1184.68e in total, and all royalties of Enigma The income is 136.42e.

HashKey Capital: Explore the possibilities and development prospects of Web3 music

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Eulerbeats

The owners of the original discs of the two series have the commercial use rights of the music, and can conduct a series of commercial activities based on the music of the original discs, with potential profit and appreciation space, while the reproduction of the copies is equivalent to an investment in the original discs. The increase in value of LP will lead to an increase in the market price of the copy, and more people will mint the copy of the LP. It is also easy to form a community between the original disc holder and the replica holder to jointly manage and make decisions about the development of the LP original disc, such as reverb and other commercial use, and ultimately form a community of interests.

2.4.2 Royal — resolve royalty distribution

Royal is to sell artists’ royalties from Spotify’s off-chain streaming to players through NFT, and players can earn future royalties from artists. Different levels of NFT holders receive different percentages of royalties, which is equivalent to collectors investing in singers . In addition to the royalties, different NFT holders can get other benefits, and there are now 10 songs on the platform, including Grammy-winning DJ and electronic musician Diplo’s single “Don’t Forget My Love”. The founder of the project is the famous musician DJ Justin Blau, also known as 3LAU. The platform has relatively rich music resources.

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Royal

The artist decides what percentage of the royalties to distribute to the players and the tier of the NFT. As shown in Nas’s Rare, the NFT of the song is divided into three tiers: Gold, Platinum and Diamond. The corresponding royalty share, price, supply quantity and Exclusive rights are different, but some offline rights such as VIP concert tickets and peripherals require a certain delivery capacity. The process is equivalent to sending part of the payment to the smart contract after the artist gets the payment of the streaming media and pays it to the fans who hold NFT, that is, the fans are regarded as investors and record companies. The crowdfunding process is similar to a broker. Company DAO. The music itself is not an NFT, the copyright of the music is.

A similar project is Opulous. The main logic is to generate NFT from the royalties under the artist chain. Investors can purchase this securities NFT to obtain 50% of the artist’s future royalties. The singer also raised the cost of making music through financing, which is similar to Music. +DeFi mode.

Other models of fan economy, such as the collection of 10,000 Deathbats NFTs released by the band Avenged Sevenfold, fans who hold NFTs can enter the exclusive community and establish connections with the band, and fans who hold rare Deathbats can have other benefits including offline meeting, lifetime free Tickets to spend a day with a favorite member, etc., Deathbats secondary market sales have reached 345ETH.Another example is the music album released by Snoop Dogg on Gala Music, which is released through blind boxes. Each blind box contains a random piece of the album’s 17 pieces of music, and may receive airdrop rewards and the opportunity to go to concerts in the future. If a player collects all 17 songs from the album, they can go to a concert by DJ Snoopadelic or go straight to Snoop Dogg’s house for a night out. Using the form of music NFT, the relationship between artists and fans has changed from a traditional one-to-many model to a one-to-one model. The few “effective loyal fans” who have more valuable contributions to the artist are more worthy of the artist’s attention. As well as giving back, they have a higher status, and the community of artists and fans has formed an effective value closed-loop relationship (fans invest funds for artists to crowdfund, and artists give back to fans for welfare).

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: OpenSea

2.5 Web 3 Music Community — Decentralized Exploration, Learning from DAO Model

Music naturally has the cohesion to form a community. The record DAO and the music community are important cradles of talents in the Web 3 music track. Although it is still immature, it is also cultivating talents, creating communities and innovating business in the way of Web 3. model.

2.5.1 Songcamp

Songcamp is like a hackathon for Web 3 music creation. It started in March 2021 and is held at the rhythm of two events every year. There are a total of 3 events so far: Camp Genesis, Camp Elektra and Chaos. Here we mainly discuss the latest event Chaos .

Chaos, Songcamp’s third event with a larger scope than the previous two, launched in March 2022. It’s an eight-week music creation experiment where 80 participants come to the Songcamp Discord to create music and form a headless band. Chaos includes 7 teams: Music, Visual, Operations, Development, Radio Blog, Economic Model Design, and Cross-Functional Teams.

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Chaos Twitter

45 creators were divided into three groups of bands, a total of 15 groups, each group was equipped with a singer, a producer and a musician with other functions, and the 8-week period was divided into 4 nodes (as shown in the figure below), Random creations and collisions, and some groups (alumni who participated in Song Camp’s previous activities) must be based on other groups’ creative inspiration. The picture below is Chaos’ eight-week pipeline. The final output is 45 songs, 45 songs will be edited into 20,000 NFTs for sale due to their cover rarity.

Eight-week schedule:

HashKey Capital: Explore the possibilities and development prospects of Web3 music

45 songs packed into 20,000 NFTs:

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Songcamp

2.5.2 Good Karma Records

Good Karma Records is a Web 3 Recording DAO, Before signing any artist, Good Karma Records will host a live showcase in Los Angeles to showcase potential signers to members, the event will be for $KARMA token holders and genesis NFT holders DAO members can use $KARMA tokens to directly vote for their favorite shows and artists. Artists will receive $KARMA tokens after signing, and the amount of $KARMA tokens allocated to each artist will be voted on by the DAO at the time of signing, giving the artist DAO governance rights. Members are rewarded with $KARMA by signing artists, doing recording work such as (production, graphic design, etc.), and contributing to the day-to-day operations of the DAO. The services that DAO can do for artists include: setting up wallets, creating and distributing NFTs, and answering all Web3-related questions; recording, making songs, etc.; publicity work. But the potential risk is that the DAO organization may not have very professional operation and production capabilities to promote artists and their records.

An artist’s mirror crowdfunding album:

HashKey Capital: Explore the possibilities and development prospects of Web3 music

Source: Mirror

3. Web3 financing is concentrated in seed rounds, indicating that the industry is relatively early

Below we have sorted out the project financing of the major Web 3 music sectors, most of which are concentrated in seed rounds.

HashKey Capital: Explore the possibilities and development prospects of Web3 music

4. Thoughts on the development prospects of Web3 music

4.1 Web3 music can strengthen the closed-loop economic ecology between fans and artists, but the current business chain is too short

Fans’ investment in artists has become quantifiable, and the relationship between the two has changed from one-to-many to one-to-one. Artists can pay more attention to their loyal fans. These fans also deserve different benefits. They are the investors of the artist. . The financing of artists has become simple, and it can also directly generate income. Creating music is no longer about generating electricity for love. However, at present, the entire business chain of the fan economy of Web3 music is relatively short. Most singers rely on the logic of Web3 music to stay in the surrounding sales, and regard the sale of NFTs as another means of increasing income. The relationship between fans and artists is not close enough. The logic of trading peripherals and collections is also difficult to rely on music NFTs to form an artist community.

4.2 Music NFT can make the industrial supply chain more transparent, but the actual operation is difficult

As mentioned above, there are a lot of black box royalties in the traditional music industry, and casting music into NFT can automatically distribute royalty income. For example, in the event of the cooperation between Sound and the label Soulection pointed out in the Delphi research report, after the listening party, more than 300 NFTs were sold to buyers at a price of 0.1e, and then automatically divided into labels, planners and artists using 0xSplits technology. . However, the traditional music industry supply chain is quite complex, including upstream creators and singers, midstream record companies, and downstream streaming media. If the industrial chain and business model are all moved to the chain, the legal risks involved and the complexity of practical operations need to be considered. Vision, designers, photographers, producers, directors and other related parties often do not simply record the income of all subjects in the smart contract in the form of a percentage in the same model as the off-chain model. If the participants are very few and streamlined, you can consider using an on-chain revenue splitting protocol such as 0xSplits to split the revenue.

4.3 Music NFT and PFP have more application scenarios waiting to be explored

Compared with picture NFTs, music NFTs have less visual impact. People need at least 10 seconds to listen to music to decide whether to buy or not. This also determines that it is particularly important for Web3 music applications to be equipped with a player in general. In terms of application scenarios, the most intuitive applications of image NFTs are social media avatars, games, and avatars of the Metaverse, which have natural and powerful social attributes, but where will music NFTs be more extensive and disseminated in addition to collections? Will it be a twitter profile or a BGM for game characters? However, Gala music under the Gala ecology is also trying to use the music NFT on the platform as the background music of its ecological game. The music traffic comes from the game, and the music NFT holders, nodes and artists will be rewarded when the music is played. In addition, sound.xyz’s visual social and listening parties provide us with an example to refer to the social nature and community of Web3 music.

4.4 Traditional Web2 music resources cannot be ignored

In the early stage, the project party needed to obtain as many IPs of well-known musicians as possible, and only relying on long-tail or niche musicians could not attract traffic, although Delphi’s research report pointed out that Web3 artists’ sales in Catalog and traffic in Spotify do not have the same effect. Relevance, twitter followers are probably only a few thousand or so, most of the singers on the Web3 platform are independent, and also received early support from collectors. But for most projects, having traffic and IP is the best way to start a project. In the early days, independent musicians’ works on platforms without good music resources and operational capabilities can easily become zombie music that no one cares about. With reference to Royal, Emanate, Audius, Opulous, OneOf, the founders or investors of these teams undoubtedly have a strong background in the traditional music industry, and the music resources of the platform are also remarkable, such as the Grammy winner Diplo on Royal. And the rapper Nas, known as the “New York Rap King”. Referring to the outbreak of small pictures, although people’s acceptance of crypto native things seems to be higher than that of traditional art works, it is undeniable that Murakami Takashi, Spanish humorist artist Joan Cornellà, these artists who have made achievements in the field of traditional art NFT The popularity of the work is still very high.

4.5 The innovative mode of music dissemination and publicity is worth considering and exploring for Web3 music

As mentioned above, the final result of Web3’s zombie music may be that no one cares, and the world of music NFT is also reserved for those who have a certain accumulation in the traditional music industry.Although Web3 provides a platform for musicians, it does not solve the problem of exposure in essence. How do niche musicians start cold? We can refer to the form of the decentralized music distribution platform sonorus. The platform cooperates with local players in Vietnam. The platform track link and SDK coexist. Users can share music to social media through the platform. The data is promoted to earn, and the people who spread it will be rewarded with tokens, so that people with strong communication ability will be gathered. Communication and publicity are also what small independent musicians need most. Spotify’s publicity operation for independent musicians without labels and their songs is to put their songs in the popular music library and playlist general promotion. In addition, platforms such as short videos and live broadcasts also allow artists to promote music and cultivate musicians, but These platforms, such as Tik Tok, are highly dependent on upstream copyright providers, and it is necessary to put the copyright provider’s music library in the APP for creators to use. And most musicians and labels are exclusive, and other distribution channels cannot be used. Therefore, referring to the sonorus model, from the perspective of publicity, dissemination and exposure, the cold start of musicians in the long-tail market in the Web 3 world seems to be no longer so difficult.

4.6 Token empowerment and economic model design need to be improved

The main functions of most Web3 music platform tokens focus on staking and governance, and there are few other enabling functions such as on-site transactions, token paid music listening, and more token incentive models. Regarding the listen to earn, create to earn and other modes of the music NFT platform that many people imagined, there may also be problems such as scripting and creating a lot of junk content and copyright infringement similar to some SocialFi platforms. , the platform will also fall into an endless loop of mining, offering and selling.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/hashkey-capital-explore-the-possibilities-and-development-prospects-of-web3-music/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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