In 2021, music NFTs generated $80 million in primary sales. This is partly due to 2021’s NFT boom. However, it is also due to the fact that more and more musicians and music creators are looking for alternative sources of income that cut out the middlemen. As a result, many are looking for a solution for the broken Web2 system in Web3.
What is Web3?
Web3 is the impending iteration of the world wide web, based on blockchain technology. Coined by Ethereum co-founder Gavin Wood, the idea became super popular in 2021 after the metaverse concept and NFTs increased in popularity.
While Web3 is not a cure for the problems that music creators face in the current iteration of the internet, Web3 promises to be more artist-centric and decentralized. In addition, current Web3 companies give artists more autonomy and create new ways to make money with music.
Let’s dive deep into how you can potentially make money as a music creator in Web3.
You’ve probably heard of NFTs, but you’re not sure how they relate to the music industry. If you would like to learn more about NFTs, visit our guide here.
A music NFT serves as proof of digital ownership. Since music NFTs are built using blockchain technology, it is impossible to replicate them. This prevents Web1 and Web2 things like illegal downloads, sampling and replication.
Many artists are creating and selling music NFTs as an alternative source of revenue. In addition to big names like Grimes, Snoop Dogg and Steve Aoki, independent artists are using music NFTs to make money and bypass traditional streaming services.
The best thing about NFTs is that in addition to the money you make from the initial sale of the NFT, you receive a percentage every time the NFT is resold (this is called a secondary sale).
There are many platforms that enable you to create your very own music NFTs in just a few clicks. Music NFT marketplaces such as Royal, Pianity, Atlanticus and OneOf are some of the most easy-to-use platforms out there, allowing you to jump on the NFT bandwagon in minutes.
Fans buy exclusive merchandise to show their support for their favourite artist and to demonstrate that they are part of the artist’s community.
Music NFTs serve as the Web3 version of merch. They enable collectors to discover new artists, support artists, become part of a community and showcase their “merch.”
As a music creator, you’re not limited to audio NFTs. You can create virtual merch NFTs that your fans’ avatars can wear in games and metaverses like The Sandbox and Decentraland. Furthermore, platforms such as MerchNFT are bridging the gap between the metaverse and IRL by enabling creators to offer NFTs with physical merch.
Streaming platforms such as Spotify and Apple Music have long been criticised for their low pay per stream. Decentralized streaming platforms are positioning themselves as the Web3 alternative that empowers artists and allows them to make a living from music.
These Web3 companies are similar to Web2 streaming giants in that they have a simple registration process for listeners and an intuitive way to upload music to the platform. Web3 platforms such as Audius, Myx and Rocki, however, give artists a higher cut of the streaming revenue.
Furthermore, these platforms reward listeners for listening to music – something Web2 companies never did. These platforms have their own tokens; therefore, the more music you listen to, the more tokens you accumulate. These can then be exchanged for real-world currencies or used to obtain voting rights to vote on changes to the platform itself.
Although we are still in the early days of Web3, it is a good idea to get involved now rather than later. Undoubtedly, Web3 is shaping up to be more artist-centric than Web2.
Therefore, learning the lingo and the platforms that are shaping Web3 is crucial for any music creator who wants a sustainable, long-term career.
Finally, Web3 unlocks passive revenue streams that enable artists to become financially independent without having to rely on old school systems that simply no longer cut it.