The music sector achieved record revenues of $25.9 billion in 2021, representing a growth of 18.5% from 2020, according to to IFPI’s “Global Music Report”. Of this nearly $26 billion, streaming has provided the bulk of the growth, up 24.3% from 2020. These patterns are great news for the emerging class of NFT musicians and highlight the demand for audio and video content.
Even as the way streaming is done changes – from centralized platforms, such as Spotify to decentralized NFT marketplaces – streaming is here to stay. The rise of streaming is part of a broader transformation in media and entertainment to digital content – print media is fast to fade† Digital media started to replace print media years ago, with profound implications for the industry. economists find that the shift to national digital media is related to the decline in local newspapers and partly explains the focus on national topics and increased politicization.
But we have the opportunity to do things differently in the emerging Web3 era. We’re now starting to see the emergence of individual musicians creating and marketing their own NFTs – keeping the bulk of the revenues, rather than handing them over to record labels or other intermediaries.
Related: Web3: Onboarding the Next Billion Users — The Way Forward
Many commentators have already pointed out that community building is important for successful NFT projects. In the absence of a centralized platform to help disseminate content at scale, NFT artists must rely on their own networks and personal connections to get the word out. In many ways that requires a different set of skills than the production of the music, namely lots of soft skills and some financial savvy – at least enough to know when to say yes or no to an opportunity.
However, such skills are not taught in traditional music programs. Instead, they focus heavily on vocal technique and music history, which are helpful to varying degrees, but not just enough for a successful career as a musician. That’s part of why record labels and centralized entities have been so helpful—helping fill a gap that many musicians had through no fault of their own.
But community building isn’t just a means of selling NFTs – it’s also a highly interactive and dynamic process that nurtures an artist’s underlying art. Unfortunately, the usual centralized model for media and entertainment not only requires musicians to relinquish most of their potential earnings, but also their rights and governance. They can’t even make decisions about their own music without the approval of their controlling entity.
While some people may still like that, artists across the board hate giving up that kind of creative autonomy and control — especially if they’re not properly compensated for it. Salaries for performing artists are: projected to experience limited growth in the coming years, suggesting that little will change unless we move off the current trajectory.
Related: The Metaverse Will Change The Live Music Experience, But Will It Be Decentralized?
Music was never designed for centralization. Artists create experiences that others can enjoy together with others. While record labels talk about building community, the proof is in the pudding: musicians across the board struggle, and often not because of a lack of talent, but rather a lack of financial and business expertise that leads them to contract with record labels that do. not serve their interests. Fortunately, we’re seeing an emergence of decentralized options, including the recent announcement of MuseDAO, which aims to bring classical musicians together and lead local encounters and gatherings for the purpose of enjoying and growing culture.
Immersive digital experiences
Previous coverage from Coin-Crypto has already pointed to the financial benefits that music NFTs offer artists through the first sale. We don’t have to look far to see the windfall that talented musicians have brought home, most notably Justin Blau, known by his stage name 3LAU, as one of the early movers from his Ultraviolet NFT drop last year.
Related: Journeys in Blockchain: 3LAU, DJ and Producer
However, what the latest streaming numbers highlight is that there is a growing audience for music NFTs beyond just streaming — if that were all we’d expect to see steady, non-exponential growth. Instead, we saw continued momentum as consumers sought more audio and video content to consume and enrich their lives rather than traditional print media.
NFTs have the potential to unlock an incredibly exciting and new market in the creative economy. If we think of artists – and content creators in general – as people who help build experiences for others, NFTs become the vehicle to transfer and authenticate unique artistic content.
While there has been some discussion of buying music-related NFTs in the Metaverse — particularly for fashion — imagine creators coming together in the Metaverse to create immersive digital experiences that combine audio, visual, and potentially other forms of content simultaneously. The creative options are limitless and the NFTs can be used to facilitate more than just leisure activities – such immersive experiences can also directly advance education and training needs.
While there are now several examples, Arizona State University, in partnership with Dreamscape Immersive, has launched the Dreamscape Learn project in 2020. As Michael Crow, president of Arizona State University, said:
“We’ve always known that there is tremendous potential to unlock new areas of learning for students by merging VR — and everything that makes it educationally and socially possible — with cutting-edge, adaptive educational experiences.”
The latest streaming revenue and the expansion of the music industry is great news for content creators across the board. The data shows there is more demand than supply, so NFTs and Web3 tools are poised to help creators harness these trends to not only become financially sustainable, but create even more engaging and immersive experiences in the Metaverse for society as a whole.
This article does not contain investment advice or recommendations. Every investment and trading move carries risks, and readers should do their own research when making a decision.
The views, thoughts and opinions expressed herein are those of the author only and do not necessarily reflect or represent the views and opinions of Coin-Crypto.
Christos A. Makridis is a research affiliate at Stanford University and Columbia Business School, and the chief technology officer and co-founder of Living Opera, a multimedia art-tech Web3 startup. He holds degrees in economics and management sciences and engineering from Stanford University.