In 2021, with the development of the bull market, a number of Web3 music platforms will emerge. This paper systematically sorts out the Web3 music platform track, divides the track into four categories according to the types of rights involved in the music works, introduces the typical projects, and makes a comprehensive comparison of all projects. This article directory:
- Track value and market structure
- Music sharing platform Audius
- Collection NFT platforms Pianity, Sound, Oneof
- Royalty NFT platforms Opulous, Royal, Rocki
- Music creation platform Eulerbeats, Melos Studio
- Comparison summary
Track value and market structure
According to the 2021 Global Music Report released by the International Phonographic Institute (IFPI), the global recorded music industry will generate a total revenue of $21.6 billion in 2020. Among them, the revenue of digital streaming media has increased year by year, which has become the driving force for the growth of the overall recorded music market. Spotify, the world’s largest streaming music platform, is currently valued at about $43 billion.
Background supplement: “Recording Industry” refers to all industries that revolve around the production and distribution of recorded music (Records), including streaming media playback, offline performances, physical record sales, etc. It is the object of discussion in this article. The following mentioned The music industry refers to the “recorded music industry”. Relatively speaking, the “Music Industry” has a broader scope, including all music-related industries such as music software and hardware, and musical instrument production, which is not included in the discussion.
The biggest problem in the traditional music industry is that music creators get too little income, and the main profits are taken away by middlemen. A 2019 survey by music industry analysis company Soundcharts shows that Spotify, Apple Music, and Google Play pay creators about $0.003 to $0.005 per play, and music creators can only receive 13% of the entire platform’s revenue, and the other 87%. It is basically in the hands of third-party companies such as streaming media platforms and record companies. Moreover, the author’s publishing authority is also in the hands of a third party, and works cannot be freely distributed.
In order to solve this problem, many music projects have appeared on Web3, hoping to directly connect music creators and fans and break the monopoly of middlemen. In 2021, the popularity of the Web3 music track will continue to increase, and a number of new projects and financing will emerge. It is still in the early stage of the market, with scattered patterns and small project volumes. There are only 2 projects with FDV exceeding US$1 billion. Moreover, the design of the project is very diverse, and there is no standard business model yet, and there are multiple development possibilities. The author sorts out the industry logic and main projects as follows:
According to the permissions of the musical works involved in the project, the industry is classified into four categories: music sharing platform, collection NFT platform, royalty NFT platform, and music creation platform. In different types of projects, the rights that users can enjoy are different, and the more right types are involved, the higher the richness of rights and the difficulty in confirming rights.
Here is a brief description of several benefits.
Personal use rights refer to the rights that individuals can listen to, download, and use to recreate works, but they cannot be publicly performed or used for profit, usually non-exclusive. The music we can hear on the music platform every day gives users the right to personal use.
The NFT transfer right means that the NFT holder can trade the NFT, and the NFT points to a specific music work, but the NFT holder does not have the intellectual property rights of the work itself, but is just an identification.
The right of royalty income refers to the right to obtain income through the profit of the work, which has completely different complexity on the chain and off the chain. In the off-chain world, royalties are determined by the holding ratios of 2 intellectual property rights (Composition Rights and Master Rights) and 6 types of use, which are protected by law; while in the on-chain world, royalties are earned. Defined by the project contract, there is no uniform standard. The scope of royalties involved in different projects is also different: Opulous involves off-chain royalties, including online and offline revenue; Royal also involves off-chain royalties, but only includes online streaming; Rocki only involves on-chain royalties. In addition, none of these projects involve intellectual property, but just let users share in the royalties.
Commercial use rights refer to the right to use works for commercial activities such as creation and performance, which are also divided into different scenarios on the chain and off the chain. Off-chain scenarios are protected by law. Only a few Genesis NFTs in Eulerbeats have off-chain commercial usage rights, which is very rare; other NFTs are only available on-chain, allowing works to generate revenue through secondary creation on the chain, and the method is determined by the project. contract definition.
In addition to the different rights involved in musical works, each project has its own token economic model and other revenue models, forming its own differentiated characteristics.
music sharing platform
Audius is the platform with the largest number of users and the highest market value on the market, but the most restrained product commercialization. It is also the only project that does not involve any NFT. The platform wants to create an open music sharing ecosystem, all music can be listened to for free, and open APIs for third-party products to call music. Through rich music resources and extremely low user thresholds, it has accumulated 200,000 daily active users. The platform currently lacks commercialization means, and plans to do paid subscriptions and creator fan tokens to achieve commercialization in the future.
In 2018, the project was established and released a white paper. In 2019, it was in the testing phase. In October 2020, the mainnet and the token $AUDIO were launched.
All functions on Audius can be used for free, including listening, uploading, and downloading music (as long as the creator ticks to download when uploading), and there are no advertisements on the entire platform, the platform is equivalent to subsidizing ordinary users all the time, giving very good user experience.
The user’s basic information is stored on the ETH or Solana chain, and the music and picture data are stored on a distributed storage network built on the basis of IPFS technology, thereby achieving decentralization and immutability. The nodes of the distributed storage network are qualified for operation and maintenance by the token holders who pledge the token $AUDIO.
By holding the token $AUDIO, users can also obtain certain privileged services, including official website badges, Discord authentication privileges, displaying their own NFTs on other platforms in the official website account, etc., to a certain extent, strengthen the user’s social identity, but use Popularity is low, with an estimated less than 300 Discord verified users.
Since the product was launched, it has been committed to building a community, and has not yet launched an effective commercialization method. The platform will give certain incentives to content contributors, but the incentives are very small. For example, the top 5 songs and the top 5 playlists will be rewarded every week. Each creator can get 100 $AUDIO rewards, which is about 150 US dollars. Creators still lack an effective way to make money.
In the future, Audius plans to launch paid subscriptions and artist fan tokens to generate revenue for artists. Paid subscriptions are traded in stablecoins and are charged according to each streaming media playback. The playback rate of different songs can be set by the creators themselves. Fan tokens are issued by artists who pledge $AUDIO, and artists can customize their distribution and use methods, such as unlocking specific content through tokens. Moreover, Audius will act as an aggregator of artist tokens, introducing personal tokens based on other platforms such as Roll and Rally to build an open artist token system.
The platform’s own commercialization ideas and positioning are relatively special, with a very strong decentralization color. The team announced in March 2020 that 90% of the platform’s revenue would be given to creators and 10% to node operators, and Audius would not take any money (below).
The Audius project party will be responsible for the Audius Foundation Treasury and manage 178 million $AUDIO to maintain the project operation; and the resources in the project are open, Audius encourages various third-party teams to build ecosystems based on project resources, and Audius App is just the Audius ecosystem One of the software in it, any team/individual can use Audius to make other software. The Audius project party will not expand operations. Currently, there are only ~20 people in the team, and user operation and maintenance are more handed over to the community. Therefore, the project party has opened up the data interface, and anyone can call the data in the project to build their own App.
Audius currently has ~200,000 daily active users and ~25,000 currency-holding addresses, which is about 15% of the daily active users. It can be seen that most of the users on the platform are traditional Internet users, and only a few users are aborigines in the crypto circle.
The accumulation of daily activities largely comes from the arrival of a group of big V in the music industry. In the early stage of the project, three electronic music artists, deadmau5, 3LAU, and RAC, were invited as consultants. In the initial distribution of tokens, each consultant can get 5 million $AUDIO on average, which is about 1 million US dollars at the price of ~0.2 US dollars at that time. , if it stayed until now, it would be nearly $8 million, which is quite a strong incentive. In return, the platform has also gained their support, including resource entry, interviews, etc. In addition, the team has been continuously inviting big Vs to settle in through the “dead fight” method. Skrillex, which has the largest number of fans in Audius, entered Audius in this way, but Audius did not disclose its specific cooperation method.
In addition to attracting big V, Audius is also continuously attracting grassroots creators through incentive programs, including: creators of the 5 most popular songs per week and producers of the 5 most popular playlists each week will receive 100 $AUDIO; Verify your Audius account via Twitter or Instagram and post a track to earn $AUDIO. Of course, these incentives are almost trivial relative to early-stage high-profile advisors.
The role of the token $AUDIO is to maintain node security, internal platform incentives and platform governance.
As mentioned earlier, Audius’ music data is stored on a distributed storage network built on the basis of IPFS. Audius requires all node operators to pledge their tokens $AUDIO in order to qualify for operation. The pledge threshold based on current pricing is ~$300,000, which strongly binds node operation to the project and enhances the project’s control over node operation. . For retail investors, they can choose to rely on different operators to pledge a relatively small amount of $AUDIO, and the pledge threshold is determined by the operators themselves.
In terms of incentives, Audius will issue an additional 7% of the total $AUDIO tokens to all pledgers (including node operators and retail pledgers) every year, and distribute them on the chain every week as a pledge incentive. In other words, if users do not pledge, their $AUDIO will be diluted year by year.
In terms of governance, node operators can initiate proposals, and all stakers can participate in voting. There is currently a case of managing treasury assets through community governance. Through community proposals, ~$160,000 of treasury funds were used to set up committees to select content contributions, issue awards to winners, and enhance incentives for content contributors. In the future, the platform may also rely on stakers to conduct content review and strengthen the management of infringing content.
The initial distribution of tokens is as follows. The total share of team advisors and investors is ~77%, which is quite high.
Royalty NFT platform
Royalty NFT is to put the future royalties of music on the chain in the form of NFT. Most of these platforms have the nature of crowdfunding. According to the different categories of royalties, it is divided into off-chain revenue and on-chain revenue. Off-chain revenue is a very complicated traditional royalty system protected by law, and it is a deep-water area where the chain circle expands the boundaries; on-chain revenue is based on chain revenue. The revenue of the above business model is a new revenue method defined by smart contracts, and the calculation and distribution methods are crypto native. Interestingly, the three royalty NFT projects discussed in this article all have traditional musician backgrounds.
Opulous converts the royalty income of music works off-chain into securities, which are issued and sold to retail investors in the form of NFT. Opulous also supports musicians to finance by staking future royalties, and will develop into a music NFT-based lending platform in the future.
The core of the Opulous platform is the issuance and trading of royalty NFTs and the lending of NFT-based assets, and there is no online streaming function. The product is still relatively rudimentary. At present, only one NFT has been released, and the loan function has not yet been launched.
The only NFT released by Opulous in November 21, which contains 50% of all real-world royalties from musical compositions. The specific distribution method is as follows: the project party establishes a company under the name of the song, transfers 100% of the intellectual property rights and commercial use rights of the music works to this company, and then issues securities on the Republic in the name of this company. Financing is capped at $500,000. Investors purchase securities in fiat currency and share 50% of all future royalties, but do not own the original intellectual property and commercial use rights of the music. After that, the project party will distribute NFT and future royalty income to each investor according to the investment share.
Since off-chain equity is involved, equity distribution is also subject to off-chain restrictions. First, the royalty income cannot be settled in real time. The project party plans to generate income from the fourth quarter of 2021, distribute the income every quarter, and send it to the user’s Algo wallet through USDC. Second, because these NFTs are securities in nature and regulated by the SEC, they cannot be traded for the first 12 months.
The first NFT artist Lil Pump cooperated with the project party is a well-known post-00 Rapper, with 7.2 million monthly listeners on Spotify. The sale was also successful, raising a cap of $500,000 within 2 hours.
In addition to royalty NFTs, Opulous also emphasizes that it is a Defi lending platform, planning to allow musicians to use their royalty income for up to the next 12 months to finance, as capital for music production and distribution. Users can also pledge platform tokens or other music NFTs to earn interest.
Opulous has its own platform token $OPUL. It is planned in the white paper that all future transactions in the platform will be conducted through $OPUL, and $OPUL will also be used as a mortgage loan asset.
At this stage, Opulous’s royalty income is still funded through traditional crowdfunding. Investors also buy in fiat currency, which is protected and restricted offline. However, the proof of rights is issued by NFT, and future income distribution is carried out on the chain. In the future, how to better transition to the chain and combine with the token economy on the chain will be a big problem.
Team and Financing
CEO Lee Parsons is the founder of music company Ditto Music, which works with more than 50,000 independent musicians.
Opulous raised $1.5 million in February 21.
Team and Financing
The main members of the team come from the traditional music industry, including artists, record companies, managers, lawyers, accountants, etc. CEO Bjorn Niclas has worked in the music industry for 20 years. He founded his own record label, Spundae black, and has successively founded several music streaming applications, including Web2 application Vidiam, Grooveo and Web3 application Choon.
The team has not disclosed funding information.
Audio and music creation platform
Eulerbeats is a generative music creation platform. Users can use algorithms to generate music NFTs on the chain, or mix several NFTs into new music NFTs, and trade them on the platform or in the secondary market. The holders of a few NFTs released in the early stage of the platform have full commercial use rights; other NFT holders only have personal use rights and on-chain royalties. Eulerbeats put the source stage of music creation on the chain, and planned a royalty revenue method based on on-chain transactions and usage, showing a complete picture of the on-chain music industry.
Eulearbeats currently has three NFT series, namely Genesis, Enigma and Futura.
The first two series are two parts of a set of limited-edition generative music released by the platform earlier, with common algorithmic principles, the main difference lies in the specific image music content and pricing. As the first NFT released by the platform, Original NFT has a strong collection value, and the holder also enjoys full commercial use rights (which is very rare on the NFT platform), and a commission for minting copies in the future.
Genesis and Enigma have 27 Original NFTs respectively, and their data and scripts are written on the ETH chain by the team, which can be permanently stored and called arbitrarily. Each Original NFT has different images and music, and its generation algorithm is based on the Euler function. The project name Eulerbeats is also a tribute to this great mathematician. At the same time, Original NFT can mint the corresponding copy Print Token. The upper limit of Print Token for each Original NFT in Genesis and Enigma is 119 and 160 respectively. In other words, each Original NFT and its corresponding 119 or 160 copies are combined into a complete collection. At present, the price of Original NFT on Opensea is between 85~666 ETH, and the number of pending orders is only single digits.
When each Print Token is minted by users, its revenue flow is as follows. Among them, 8% is the royalties of Original NFT holders.
The “Burn Reserve” in the table is a fund pool designed to form the Print Token liquid market. When each Print Token is minted, the corresponding part of the fee is deposited into Burn Reserve; if the user destroys his Print Token afterwards, the Print Token in the market will be reduced by 1, and the user can obtain corresponding compensation from Burn Reserve. Of course, users can also trade Print Token in the secondary market.
The purchase and redemption prices of Print Token are based on the Bonding Curve design, that is, the more supply in the market, the higher the price. The main difference between Genesis and Enigma is also in the design of the bonding curve: the initial price of Genesis’ Print Token is relatively high, and the price of the last Print Token for each set of collectibles will be as high as more than 700 ETH, which is difficult to collect completely; while Enigma’s Print Token will cost more than 700 ETH. The initial price of Token is low, and the minting limit is reached before the price curve soars. The team hopes to use this design to try to motivate people to collect Enigma’s complete collection.
In addition to the different pricing of copies, Genesis and Enigma’s Original NFTs are also sold differently. The former is minted by the user and costs 0.271 ETH, so it cannot be auditioned before it is generated; the latter is publicly auctioned by the team on Opensea after the minting is completed to complete the market price discovery, and users can listen to the music before purchasing. The team only sold 25 Enigma Origianl NFTs, and one of the remaining ones will be given to a platform-related DAO organization as a reward in the future, and the other one will be reserved by the team for future experiments.
Genesis and Enigma are more like early experiments by the team to explore generative music and transaction prices, while the recently released Futura series is the beginning of a complete music creation and revenue chain.
The core of Futura is to provide a music mixing function, which can generate countless new music NFTs. The platform initially sold 4040 Mixpass NFTs as admission tickets. Each Mixpass NFT can be exchanged for 2 Mix NFTs containing randomly generated images and music. A total of 8080 Mix NFTs are the basic elements for generating new music in the future. Each Mix NFT is unique, defined by 30 attributes, and just like the common blind box game, there will be rarer Mix NFTs.
Mixpass NFT has been sold. Users can purchase Mix NFT in the secondary market. The current floor price is 0.045ETH. In addition, Futura’s NFT is based on Polygon, which may require low-fee facilities due to its large number.
In addition to the randomly generated Mix NFTs, the basic elements of mixing are the “handmade” Master NFTs on the platform. These NFTs use the same basic attributes as Mix NFTs, but the specific attributes are selected and defined by the platform, which is more representative. Sexual mixing elements. In the future, users will be able to use Mix NFT and Master NFT to mix and record to generate unlimited new music NFTs. However, neither the Master NFT nor the mix function has been released yet. I don’t know what operations the mix function includes and what it can allow users to do. Subjective creation.
After the mixing function, the team also plans to launch a complete revenue system. The team will further disassemble the music elements into music clips Clip NFT, and invite artists to settle in to make a batch of new Clips. With these basic elements, users will be more free to create in the future, and royalty income will also be based on these Clips. Secondary use to calculate distribution.
It should be noted that the holders of Master NFT and Mix NFT do not have the commercial use rights of music works in the real world, but if the commercial ecology in the Eulerbeats platform can be established, such as charging royalties by mixing Clips, then NFT Owners can naturally earn revenue from on-chain royalties. This exploration of Eulerbeats provides a completely different idea for the way of the music industry on the chain, and its future development is very worth looking forward to.
Although Eulerbeats has been launched at the beginning of the year, it has not yet planned the token, and the transaction uses ETH. The platform realizes revenue through the sale of Genesis and Enigma’s Original NFT, and a 2% commission when generating copies.
However, the platform launched a trial of Genesis and Enigma copy pledge mining in May. Users can pledge a pair of copies corresponding to Original NFTs of Genesis and Enigma with the same number (Original NFTs cannot be pledged). During the mining test, the platform will All royalties are distributed to stakers.
At present, Genesis generates about 1,000 copies and holds about 500 addresses; Enigma generates about 300 copies and holds about 110 addresses. 5,423 Mix NFTs of the Futura series have been generated, and the generation progress is 67%.
Team and Financing
The Eulerbeats team, treum.io, was established in 2017 and has been building an NFT platform, and has already made a number of NFT applications. Acquired by Consensys in October 21. No financing information is currently available.
- Melos Studio
The breakthrough of Melos Studio is similar to Eulerbeats. It is also a music creation platform that supports secondary creation. The main difference is that it is not generated by algorithms, and has stronger Defi and community autonomy attributes.
The product is in a very early stage, and the only functions currently online are the listening and purchasing of music NFTs. All music can be listened to for free. NFT holders have no special rights such as intellectual property rights, only personal use rights and transfer rights, and the transaction volume is also small. The following descriptions are mainly based on product white papers and Medium plans.
The music creation mechanism of Melos is also similar to Eulerbeats, but it is not generated by an algorithm. Users can upload a piece of music to generate an NFT (New Forge); other users can make secondary creations on this basis: copy this NFT fine-tuning into a new NFT, such as converting C minor to C major (Solo Forge) , or mix two NFTs into a new NFT (Jam Forge).
Each NFT will have a corresponding MusicBlock, which records the DNA and Gen of the music. DNA contains information such as its author, traceable music, etc. Gen contains the number of generations. For example, the music NFT uploaded by the user is Gen0, the NFT created based on its fine-tuning is Gen1, the NFT recreated based on Gen1 is Gen2, and so on.
This approach is very similar to Eulerbeats’ design of decomposing music into Clips, allowing users to stack and mix to create new music, and encouraging users to rely on platform music resources for secondary creation. At the same time, Melos completes the process of confirming the right of use by means of block traceability.
In addition, Melos has planned a variety of scenarios for using music NFTs for economic activities, but it is limited to brief descriptions without detailed descriptions. The general applications of music NFT include: pledge mining, pawn lending, leasing (lease, but it is not stated what the renter can do with NFT), holding NFT to obtain platform token incentives, and auction share (only for Jam Forge types). In Melos’ design, music NFTs have very strong property attributes.
Melos has its own platform governance token $Melos, and recently launched Wave Points, which is similar to the concept of user points, expanding the incentive boundary.
The main role of the governance token $Melos is incentive and governance.
In terms of incentives, users will be motivated by tokens for various activities within the platform, including staking music NFTs, holding music NFTs, trading music NFTs, and generating Jam Forge NFTs. These incentives all come from the incentive pool originally designed. In addition to token incentives, the above behaviors of users will also receive NFT airdrops issued by the platform. However, the platform has not yet given a plan for the specific incentive amount.
In terms of governance, holding 1,000 $Melos will become a member of the DAO and participate in platform governance; the number of tokens held determines five different user levels, corresponding to different voting weights. Governance content includes: 1) Creation category, such as voting to decide whether to generate a new Jam Forge NFT; 2) Organization category, such as whether to revise the platform incentive policy; 3) Development category: such as whether to purchase offline assets. There are different pass criteria for different types of decisions.
In December, Melos announced its plan of incentive points Wave Points on the official Medium. The main significance is that users can also get platform incentives by contributing activity rather than directly investing in assets.
There are many ways to obtain Wave Points, and users are encouraged to contribute to their activity in various ways, including 1) completing referrals, such as developing a musician to enter the platform and completing the review; 2) trading NFT, such as purchasing an NFT work on the platform ; 3) Content creation, such as music creation with at least 10 likes; 4) Accumulation of social relationships, such as fans including at least 10 musicians; 5) Platform contribution, such as identifying platform bugs.
The connection between Wave Points and token economic activities is that incentive points can be exchanged for music NFTs, or used as certificates for airdrops, thus expanding the user base who hold music NFTs and participate in economic activities. In addition to times, it can also be used to tip musicians, get event tickets, and more.
The incentive design of Melos is complicated, and various economic activities and platform behaviors of users will be included in the incentive category. This will undoubtedly increase the user base participating in the platform economy, but it will also bring about the problem of machine brushing.
Team and Financing
The team is from Taiwan. One of the co-creators is Yalu Lin. Before founding Melos, he was the operation director of Machi X, another music copyright token platform. His business includes the purchase of song and song IP, legal procedures, etc.
Melos was invested in by Binance in 2021, but did not disclose the investment amount.
The music sharing platform Audius is the project with the user experience closest to the Web2 streaming platform. The core difference from Web2 is that the project party cancels its role as a middleman and opens up all the resources and data of the platform. Project parties jointly manage treasury funds and platform policies. In order to realize the two-sided market of users and artists, Audius has spent a lot of energy to continuously introduce music resources, but the current 200,000 daily active users are still very weak compared to Spotify, and the paid subscription model may be difficult to get through in the short term. In the future, fan tokens will be introduced to directly convert fan popularity into investment value, which may open up a new situation.
Collection NFT has the shortest commercial link, similar to the logic of selling peripheral commodities in the traditional music industry. The commodity value of NFT is mainly reflected in social value. For musicians, a revenue channel has been added, but it is difficult to say that it can solve the inherent problems of the music industry, because the appreciation of NFT lies in the improvement of the popularity of musicians, and this still needs to rely on the publicity of third-party companies. Due to the short links and simple logic, such projects can see investment returns in the short term, and it is necessary to compare product operation capabilities and token incentive designs, such as Pianity’s strong token incentives, Sound’s social visualization design, and Oneof’s founder’s own resources. is an important factor in helping a project acquire users.
The royalty NFT platform is committed to putting the revenue of the traditional music industry on the chain, and the logic is relatively complex, especially when Opulous and Royal distribute off-chain royalties on the chain, which will inevitably involve legal issues in the real world. Moreover, off-chain royalties still rely on various existing third-party platforms, and have not fundamentally changed the business model of the industry. However, the royalty NFT has realized the crowdfunding of music distribution, and the DAO of the brokerage company may appear in the future. In addition, the practice of royalties on the Rocki chain is relatively rare, and the logic is very simple. The closed loop of making money and sharing money is directly completed on the chain, but the prerequisite for success is to be able to establish a revenue ecosystem on the chain, which will be very difficult.
The music creation platform has a bigger picture and wants to establish a complete business ecology on the chain. Both Eulerbeats and Melos encourage users to use platform resources for secondary creation, and divide royalties according to the inheritance and use relationship between music, which is equivalent to expanding the commercial use of music works on the chain, showing the possibility of music business ecology on the chain sex. Moreover, the platform will also provide mixing and creation tools to lower the production threshold. Eulerbeats’ creation music NFT is generated by algorithm, which is also different from the traditional music production path. The platform may inspire users to create a new music creation model.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/the-4d-long-article-explains-the-web3-music-platform-track-in-detail/
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