The music industry reached record revenues of $25.9 billion in 2021, representing 18.5% growth from 2020, according to IFPI’s Global Music Report. Of that nearly $26 billion, streaming drove the bulk of the growth, up 24.3% from 2020. These patterns are great news for the emerging class of NFT musicians and highlight demand for audio and video content.
Even as the way streaming is done changes – from centralized platforms, like Spotify to decentralized NFT marketplaces – streaming is here to stay. The rise of streaming is part of a broader transformation of media and entertainment towards digital content – print media is rapidly fading. Digital media began replacing print media years ago with profound effects on the industry. Economists find that the move towards national digital media is linked to the decline of 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 era of Web3. We are now starting to see the emergence of individual musicians making their own NFTs and marketing them – and keeping most of the revenue, rather than handing it over to record companies or other middlemen.
Related: Web3: Onboarding the Next Billion Users – The Road Ahead
Build a community
Many reviewers have already pointed out that community building is important for the success of NFT projects. Without a centralized platform that helps deliver content at scale, NFT artists must rely on their own networks and personal connections to spread the word. In many ways, it requires a different skill set than music production, namely lots of soft skills and some financial savvy — at least enough to know when to say yes or no to an opportunity.
However, these skills are not taught in traditional music programs. Instead, they focus heavily on vocal technique and music history, which are helpful in varying degrees, but not sufficient on their own for a successful career as a musician. That’s part of the reason record labels and centralized entities were so helpful — they helped fill a void that many musicians had through no fault of their own.
But, building a community isn’t just a way to sell NFTs, it’s also a highly interactive and dynamic process that fuels an artist’s underlying art. Unfortunately, the usual centralized media and entertainment model not only requires musicians to part with the bulk of their potential earnings, but also their rights and governance. They can’t even make decisions governing their own music without getting approval from their controlling entity.
While some people might still be okay with this, artists in all fields hate giving up that kind of creative autonomy and control, especially when they aren’t well compensated for it. Salaries for performers are expected to experience limited growth over the next few years, suggesting little will change unless we deviate from the current trajectory.
Related: The Metaverse will change the live music experience, but will it be decentralized?
Music was never meant for centralization. Artists create experiences for others to enjoy with others. Although record companies talk about creating community, the proof is in the pudding – musicians at all levels struggle, and often not because of a lack of talent, but rather a lack of financial and commercial expertise that leads them to enter into contracts with record companies that do not serve their interests. Fortunately, we are seeing the emergence of decentralized options, including more recently the announcement of MuseDAO, which aims to bring classical musicians together and spearhead local meetups and gatherings with the aim of enjoying and develop culture.
Immersive digital experiences
Earlier Cointelegraph coverage has already highlighted the financial benefits music NFTs offer artists upon initial sale. We don’t have to look too far to see the windfall that talented musicians have brought home, including Justin Blau, known by his performer name 3LAU, as one of the first to cross his Ultraviolet NFT drops last year.
Related: Blockchain Journeys: 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 was all there was, then we we would expect to see steady, not exponential growth. Instead, we’ve seen continued momentum as consumers seek more audio and video content to consume and enrich their lives in place of traditional print media.
NFTs have the potential to unlock an incredibly exciting new market in the creative economy. If we think of artists – and content creators more broadly – as people who help create experiences for others, then NFTs become the vehicle to convey and authenticate unique artistic content.
While there’s been talk of buying music-related NFTs in the Metaverse — especially for fashion — imagine if creators came together in the Metaverse to create immersive digital experiences that simultaneously combine audio, visual, and potentially other forms. The creative options are limitless, and NFTs can be used to facilitate more than just recreational activities – such immersive experiences can also directly advance education and training needs.
Although there are now several examples, Arizona State University, in partnership with Dreamscape Immersive, launched the Dreamscape Learn project in 2020. As stated by Michael Crow, President of Arizona State University:
“We have always known that there is enormous potential to unlock new areas of learning for students by merging virtual reality – and all that it enables educationally and socially – with advanced and adaptive educational experiences. .”
The latest streaming revenue and expanding music business is great news for content creators at all levels. Data shows there’s more demand than supply, so NFT and Web3 tools are poised to help creators take advantage of these trends to not only become financially viable, but to create even more compelling experiences. and immersive in the metaverse for society as a whole.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
The views, thoughts and opinions expressed herein are those of the author alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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 Web3 multimedia art-tech startup. He holds doctorates in economics and management science and engineering from Stanford University.