Cryptomedia presents a new, and better way, for artists to monetize their works. NFTs make digital files “collectible”, thus acting as a value-capture mechanism for digital art. This has enabled some digital creatives to earn a living from their work for the first time. Many believe cryptomedia has the power to revolutionize the music industry in particular.
Music streaming is king these days, and large platforms like Spotify and Apple Music dominate. Artists are somewhat forced to list on these platforms in order to be discovered and grow their audiences; however, these platforms extract most of the value from the fan-artist relationship, and offer artists low commissions on their work. For example, Spotify pays only $.0037 per stream. This means that only the top artists with large audiences can make a living on streaming platforms.
This is starting to change with Web3. As Li Jin argues, now creators only need “100 true fans” to earn a living. It only takes each fan buying $1,000-worth of content per year for that creator to earn 6-figures. This has already begun to happen with music cryptomedia.
Now true fans can verifiably own limited edition, or 1-of-1, songs by their favorite artists. This opens a new revenue channel for artists, and is additive in that artists can still earn money on streaming platforms. Also, Web3 makes it easy for artists to set royalties on their music, and any other kind of cryptomedia. This is actually another revenue channel for artists. Setting royalties ensures that artists receive a cut of all secondary sales of their cryptomedia. The artist specifies their Web3 wallet address, and royalty payments are automatically routed to this address, into perpetuity.
Catalog is a popular marketplace for purchasing music NFTs, and as @Coopahtroopa has pointed out, top artists on Catalog have already begun to eclipse their streaming earnings. Artists mint their songs as NFTs, and list them either as a reserve auction or buy-it-now offer. This is the first time that artists have been able to make their MP3s scarce, and fans have been willing to spend thousands of dollars to own one of these audio collectibles.
Sound is another music NFT marketplace with a unique twist. Artists list their music as limited edition songs, so there are multiple owners. There is a listening party when a song drops on Sound, and the owners get to write a comment at whatever timestamp they chose.
Artists sometimes add in other benefits for owners of their song cryptomedia. For example, one of the song owners above will win two free tickets to Kacy Hill’s upcoming, live performances.
Arpeggi is another notable Web3 music project. They have uploaded music onto the blockchain for artists to sample and create their own on-chain music with.
Audius is a Web3 music streaming platform aiming to be less extractive than the current Web2 streaming platforms already discussed. Audius promises 90% of its revenues to the artists who upload their music to it. For example, Audius rewards artists with $AUDIO tokens if their song or album starts trending. The creators of trending playlists also get rewarded, so there is now financial incentive to curate music.
Cryptomedia redefines the relationship between artist and fan. Ownership of an artist’s cryptomedia aligns you with the success of that artist. As an artist’s popularity grows, his cyptomedia, purchased back when he was less known, will rise in value. This leads to a “buy-and-retweet” phenomenon where cryptomedia owners promote their artists, at least partially, because there is financial incentive to grow that artist’s success. a16z venture capitalist Jesse Walden terms this “Patronage+”.
This segues into another music NFT-related project called Royal Music. Artists sell a portion of their songs’ royalty rights. This is an extension of everything we’ve talked about before. Fans can now directly own a portion of the revenue that a specific song or album generates.
If you enjoy videos over reading when it comes to online learning then checkout the course on YouTube. This is part 6 of 8 in the NFT Design Course 2022. Also, make sure to checkout other Web3 Design Courses.