The music world bets on Web3: a game, a dream

To tell a joke, 14 years after its launch, Spotify has still failed to make a profit, and the online music service has still not figured out its own profit model. In order to increase revenue, Spotify has transformed from a music platform to an audio platform, and now it has begun to enter the “Metaverse” and test the water NFT.

On May 3 this year, Spotify announced its entry into Roblox, a game platform that promotes the concept of the “Metaverse”, becoming the first music streaming brand to enter the platform. Subsequently, Spotify began testing the display of NFTs on the artist’s page. section.

However, record labels and musicians are more enthusiastic about embracing Web3. Universal Music formed an NFT band, Snoop Dogg filmed the first “Metaverse MV”, and Pharrell Williams started his own On the NFT platform, Madonna released the first set of NFTs, while The Weeknd, the traffic director of the music industry, announced that it would hold the “world’s first crypto tour”.

Observe the current music Web3 projects, you will release, they usually mention a common reason, “streaming media does not make money”, in order to surpass the traffic economy, the music industry has begun to dream a beautiful dream called Web3.

Is the traffic economy over?

If the model of the traditional record industry is “sales economy”, the model of Internet music is “traffic economy”. For music platforms, traffic is the lifeline and the basis for driving consumption conversion. For musicians, traffic directly determines the level of income.

The benefits of traffic are obvious. With the consumption of records breaking through physical space constraints, and the consequent integration of dissemination and consumption, music is connected to an unprecedentedly large market through the Internet platform, which has brought about the recovery of the music industry.

The 2021 Global Music Report released earlier by the International Federation of the Phonographic Industry IFPI shows that, driven by streaming media, the global recording industry revenue in 2021 has already surpassed the peak in 1999 in numbers, and, there is no doubt, this number is still will continue to grow.

However, the limitations of the flow economy have also emerged. Relying on traffic alone, streaming media platforms cannot convert high enough paying users, so they can only rely on diversification to expand the traffic pool, such as adding podcast services. In China, although Tencent Music relies on social services to achieve profitability, from the financial report, TME’s social services have entered a stable period and need new growth points.

Short video plays the role of a “traffic amplifier”, but it is also diluting the value of traffic.

On the one hand, the rapid growth of creators has made traffic competition more intense. According to data released by Spotify earlier, the number of songs uploaded on the platform in one day exceeds 60,000, and the “2021 Chinese Digital Music Annual White Paper” released by Tencent Music shows that in 2021, the output of new Chinese songs in 2021 will exceed one million for the first time. A new song is born in 27 seconds. In such fierce traffic competition, unless they become “traffic responsible”, it is difficult for musicians to expect streaming media to bring more income.

On the other hand, the market space of traffic is not unlimited, and the source of traffic depends on the number of users and the time allocation of users. Globally, the reason why music streaming revenue is still growing is only because of the uneven distribution of Internet penetration across regions. In markets with low Internet penetration, there is still a lot of potential for streaming, but in some markets with high penetration, traffic has actually peaked.

In recent years, many musicians have called on music platforms to increase unit streaming expenditures. However, when traffic competition is more intense and platform revenue is struggling, such “calls” are unrealistic-high competition in a limited market, only The value of the unit stream will be lower and lower.

For musicians, the better way out is to find a way to surpass the traffic economy, so some people choose to bet on Web3.

Bet on Web3

On June 2nd, one of the hottest singers of the day, “Pot Plant Brother” The Weeknd announced that his “After Hours Til Dawn Global Tour” will use innovative Web3 technology to “connect with you in new creative ways and collaborate on charity. activities to provide food to those in need.”

There are no more details about what kind of creative technology it is, but some friends may smile when they see the word “charity”. In the Web3 world, many projects are carried out in the name of charity, which is nothing more than to reduce the “conflict” of the outside world against Web3.

The music world bets on Web3: a game, a dream

What is Web3? Although the word has been talked about for a year, let’s be honest, no one can explain it.Web3 believers say that Web3 is the future of the Internet, which will allow users to get rid of the control of the platform and realize real data freedom, but more and more reports tell everyone that Web3 is closer to “dream as a horse” than “dream as a horse”. “Cut the leeks”.

The epic collapse of the cryptocurrency LUNA has caused a large number of investors to lose their money, and the market value of Coinbase, a star company in the crypto market, has plummeted by 90% one year after its listing, and even the offers it sent have been withdrawn. And “an academic paper published in October 2021 found that the top 10% of traders executed 85% of NFT transactions, and 97% of all NFT assets were traded at least once by these individuals.”

There is a famous saying in the Web3 world, “Outperform Pond’s, leave before the collapse”, everyone thinks they are “big smart”, and they are willing to be “big fools”, and finally found that “leeks” are actually themselves. Bill Gates called it “Boy Stupid”: whatever its price, it can be sold higher because “someone will pay more than me”.

But the music industry can’t control so much. In order to surpass the traffic economy, in order to catch up with the early bus of the new technology revolution (if it is true), music companies and musicians are starting to bet on Web3.

At the end of May, GODA, an NFT platform that Pharrell Williams co-founded, announced that it would go live this summer and that the platform would purportedly utilize NFTs in a way that “feels organic and authentic to their creative voice.”

NFT is one of the hottest concepts in the Web3 world at present, and it is also a concept that is easier for musicians to understand and see the benefits. On April 20 this year, veteran narrator “Master Dog” Snoop Dogg released the NFT of Death Row Session: Vol. 2 and earned $300,000 in one day. Before the release of NFT, Lord Dog also released a “Metaverse MV” “House I Built”, which is claimed to be the first MV filmed in the Metaverse.

Big record companies are not far behind. On May 19, Universal Music announced a partnership with LimeWire to help its artists distribute NFTs on LimeWire. Last year, Universal Music’s Web3 label 10:22PM purchased some NFTs from the “Boring Ape” series and formed an “NFT band” called KINGSHIP. In February of this year, 10:22PM acquired another NFT from the Boring Ape series, named Manager Noët All, and let it lead the team. Not long ago, 10:22PM announced that it would create a virtual world for KINGSHIP.

The music world bets on Web3: a game, a dream

KINGSHIP

It seems that in Web3, musicians and record companies are getting more and more fun.

one game one Dream

Along with the popularity of Web3, in addition to hot money, there are doubts. What problems can Web3 solve? Are NFTs Really Valuable?

In fact, the NFT, which has been hyped since the beginning of last year, has shown a trend of cooling down.On May 14 this year, Madonna released her first set of NFTs in the name of charity, named “Mother of Creation”, with a total income of more than 620,000 US dollars.

The music world bets on Web3: a game, a dream

The image of the mother of creation NFT

In this regard, Nick Rose, the founder of an NFT platform, said: “The revenue is much lower than expected.”

After a series of scams and crashes, the Web3 market seems to be returning to “rational”. Data released by Chainalysis shows that active NFT players in the second quarter of 2022 decreased by 50% year-on-year.Data from The Block shows that compared to January this year, the NFT transaction volume in the first week of June fell by 70%. And Nick Ross said that most of the NFT players he knows have stopped trading, including himself.

A previous NFT buyer put the first tweet NFT of Twitter founder Jack Dorsey, which he bought for $2.9 million, up for auction, with the highest bid of less than $14,000. This is no longer “diminishing marginal utility”, it is “marginal utility diving”.

 

After Jack Dorsey made a lot of money from NFTs, he jumped out of the game, constantly sings Web3 and started to create his own new concept of the Internet: Web5.

The music world bets on Web3: a game, a dream

According to industry analysts, people may overestimate the collection value of NFTs. The value of NFT is a reflection of the value of the real carrier. Jack Dorsey’s first tweet is a “historical event”. Auctioning a “historical event” with NFT is also a historical event, but resale is not. What someone bought for 2.9 million is a historical event, and the resold NFT is just a proof that someone has bought a historical event, so the value must dive.

In the music market, consumers buy NFTs from a musician. If the musician can continue to make history, NFTs will become more and more valuable, and vice versa. NFT is like providing a “financial leverage” for musicians. As for what this leverage can leverage, in the final analysis, it depends on the value of the musicians themselves and what they have done.

Taking Lord Gou as an example, an NFT player analyzed that the reason why Lord Gou’s NFTs can be sold at high prices is not just because of his fame, but because he runs a highly sticky community for this purpose.

This article does not intend to deny the value of a new technology, Web3’s “centralized community governance” and “self-certification” concepts may be able to promote the current considered rigid Internet can be rejuvenated. At the moment when “traffic is king”, individual creators also need new technologies to create more reliable sources of income for themselves and get out of the shackles of traffic games.

However, at present, it seems that what drives the development of Web3 is not so much a solution to a real problem, but a kind of “gold rush mentality” of get rich quick – the Internet not only gives everyone the opportunity to be a creator, but also makes everyone have the opportunity to be a creator. The opportunity to be a developer also gives everyone the opportunity to be an investor, and a speculator. The Web3 craze in recent years is actually a product of the sinking investment in the technology sector. As a result, the financial risks normally borne by investment institutions in technological development in the past have been passed on to the general public.

There is certainly no shortage of doers and real idealists in the Web3 market, but this game is not for everyone. In this regard, Nick Ross friendly reminder: “If you at the table don’t know who will be the loser, it’s you.”

I hope that when you wake up, the money in your pocket is still there.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/the-music-world-bets-on-web3-a-game-a-dream/
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