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It seems like only yesterday when everyone was talking about Web 2.0.
But the times, they are a-changin’, and it seems like Web3 is set to arrive imminently.
But what is it and how will it affect the music industry?
Web3 is a phrase that was coined by Gavin Wood, the co-founder of Ethereum.
Currently, Wood contends, the internet is controlled by big tech. If it could be modified to incorporate blockchain, token-based economics, and decentralization, the internet would be a more equitable place.
Perhaps, the biggest challenge for artists in the brave new internet world of streaming services is getting paid.
In fact, streaming services tend to pay very small fees for each stream and an artist might have to get more than a million streams a month just to pay their bills.
By using blockchain to give artists more control over their own music, it might be easier to ensure that they got their fair share of the revenues.
There is, also, the possibility to create “Non-Fungible Tokens” (NFTs) out of music assets and sell those. This could, in theory, see artists generating large amounts of cash when they need to.
Audius was one of the first music Web3 apps, launching in 2019. That it’s still here is a positive sign. The company takes no share of artists’ revenue and uses a token-based economy based on their own platform $AUDIO and 3rd party stablecoins.
Artists are paid in $AUDIO. You cannot mint NFTs on the platform but you are able to sell them once you’ve earned at least 100 $AUDIO.
Check out Audius here.
This service is very similar to Audius and uses the $EMT token for its payment systems. Unlike Audius it does pay per stream and there is also a revenue share from the Emanate Music Lovers group.
For now the service is focused on artists but Emanate has plans to allow record labels to manage their business on the platform too.
Check out Emanate here.
If you want to mint NFTs for sale from musical assets then OpenSea is the biggest NFT marketplace and it is very easy to use and doesn’t charge listing or minting fees.
It does, however, take 2.5% of all sales made. You can specify that you want a kickback on secondary sales of up to 10% which is quite handy.
Check out OpenSea here.
Is another large platform to mint and sell NFTs on. They have different blockchain options to OpenSea, otherwise, there’s not a huge difference between the services.
Check out Rarible here.
Web3 does offer the potential to improve artist’s share of revenues, however, it also presents real risks too.
We should note that the global NFT market, for example, has collapsed in the last year and it seems uncertain if it will recover in its present form.
And while there are plenty of crypto revenue share models out there, not just in music, none of them seem to have captured a large enough part of their target market to be anything but bit players, for now.
We’d advise artists to keep their eye on the Web3 space and to experiment with it, but to continue doing what they’ve been doing for now.