Editor's note: This article is based on BFF's Twitter Space, From MP3 to NFT: The Evolution of Music Ownership. Listen to the full recording.
If you've ever attended a multi-day music festival and walked away with new friends and collectible merch to boot, you probably understand music's intrinsic ability to drive community. From the raucous energy of a rock concert to the soulful melodies of a local coffee shop performance, music has an unparalleled ability to create memorable connections both online and offline.
In the digital age, music's power to build communities has only intensified. Online platforms, built around the digital file format of mp3s, have given rise to virtual spaces where music lovers can congregate, share their passion and discover new artists. From niche subreddits to sprawling social media groups, the internet is truly a celebration of musical camaraderie, connecting individuals (who may have never met otherwise) the way we once connected around a campfire. In particular, streaming services like Spotify and Apple Music deliver algorithmic recommendations that encourage music enthusiasts to traverse genres, eras and cultures, expanding their cultural horizons with just a few clicks.
But what's the next evolution of music ownership? An increasing number of music industry pros argue the answer is — you guessed it — in Web3.
While the rise of streaming services has undoubtedly transformed the music industry, providing broader reach and discoverability, this shift has not been without its downsides, especially for independent recording artists. One of the major problems faced by these artists is the unequal revenue distribution. In the current model, streaming platforms tend to favor major record labels, leaving independent artists with meager earnings, despite their talent and hard work. This disparity often discourages independent artists, making it difficult for them to sustain their creative pursuits.
Here's where non-fungible tokens (NFTs) may offer a solution, as some experimental artists are discovering. This new technology allows artists to not only share their music files, but tokenize them into digital assets that can be monetized, traded and collected.
"With an MP3, when we all had our our iPod or or players, the tracks were downloaded [onto the devices], and no one else really knew it. No one else could interact with those," explains Sage Storm, independent artist and social media manager for WarpSound, a generative AI-driven music company. Centralized streaming platforms added a social element, enabling fans and friends to share playlists and follow one another. But NFTs unlock a limitless array of user-driven experiences, Storm explained, taking social interaction to a new level.
"You can craft an entire experience around community," Storm said. Music lovers can view their friends' NFT collection, make them an offer on one of their collectibles or join artist-run communities by buying into their NFT project. "My entire world has been built around connections that I've made around music, and I just see so many ways in which NFTs and Web3 can take that to another level that we haven't even thought about yet."
Sammy Arriaga, Latin Country Artist and founder of PIXELATED, a 3,999-item profile picture (PFP) collection that gives collectors exclusive perks and access to special song drops and social media interactions, experienced success while experimenting with innovative ways to build his fan community with NFTs.
"I launched my first music NFTs in the beginning of 2022," Arriaga recalls. "And since the end, we've now sold a little bit over 15,000 music NFTs and just surpassed 500 ETH in in in both primary and secondary volume." He added that the production of his music was all just from his apartment in Nashville, "singing into [an] iPhone on Twitter Spaces."
Truly, the value of Web3-driven music projects may not be in the show-stopping pyrotechnics of a Beyonce concert, but rather in connecting with fans in niche, intimate ways. This approach is sure to catalyze a loyal following of fans who feel as though they are a part of an artist's journey — and eventually convert into long-term stakeholders.
Nvak Collective, a record label and management company that is focused on utilizing Web3 to drive change for creators, is placing its focus on signing women nonbinary and LGBTQ+ talent from emerging markets. The collective currently has three artists on its roster at the moment: the LA-based singer-songwriter Annika Rose, Armenian artist Rosa Linn, and Lebanese singer-songwriter and producer Talia La Houd.
"We work together to onboard artists into Web3 and strategize their project, drops and partnerships based on their own unique goals and places in the world," explained Hannah Hyman, Web3 Project Manager at Nvak Collective.
LaHoud, who is dropping her first EP album with Nvak Collective, will be using the experience as her first introduction to blockchain-based music. "It's going to be very, very exciting," said Nvak Collective Web3 Director Samuel Del Real. "Being able to introduce an artist that speaks three languages — French, English and Arabic — and introduce them to the Web3 music scene makes a huge difference for an artist coming from a country that has a currency that is 100x devalued [compared to] the US dollar."
Throughout the conversation, the panelists touched on the democratizing potential of Web3, highlighting how it can level the playing field for emerging artists. They emphasized that Web3 technology eliminates gatekeepers, allowing artists to showcase their talents to a global audience without the constraints imposed by traditional music industry structures.
The Twitter Space concluded with the experts expressing their optimism for the future of music in the Web3 era. They envisioned a world where artists have full control over their creative endeavors, where fans become stakeholders in the success of their favorite artists, and where the music industry is more transparent and artist-centric than ever before.
As the music industry continues to embrace the decentralized web, the insights shared by Hannah Hyman, Samuel Del Real, Sammy Arriaga, and Sage Storm serve as a testament to the transformative power of Web3 in shaping the future of music. With its promise of empowering artists, revolutionizing monetization, and fostering vibrant communities, Web3 is poised to usher in a new era of creativity, collaboration, and fan engagement in the music industry.
Read More: We're Entering The Era Of Decentralized Workplaces
Megan DeMatteo is BFF's Editorial Partner.
This article and all the information in it does not constitute financial advice. If you don’t want to invest money or time in Web3, you don’t have to. As always: Do your own research.
