Music industry

Web3.0, metaverse and their influence on the music industry

By Abhijit Nath

The music industry is at a very interesting inflection point. Historically, music has changed from dominant format every 11 years since 1920 – from wax cylinders to vinyl to cassettes to CDs to iTunes and streaming. Every alternative music format bundles and breaks music down – after 11 years of Spotify’s all-you-can-eat buffet, it’s time for a change.

The fundamental problem is this: if all the music in the world is free, none of it has any value, and the music becomes a “lean back” format. This is why the music industry is currently a $20 billion industry (as opposed to the gaming industry which is worth around $200 billion).

Beyond the stars, almost no artists make money from their art. The top 1% of artists on Spotify earn an average of $4,000 per month, while the remaining 99% of artists earn – wait for it – $12 per month. It’s time for a change.

Over the past year, there has been a lot of discussion about how artists can “reclaim” their careers by taking advantage of Web3. Platforms like royal.io, sound.xyz and Catalog have helped a small handful of artists break through – 3LAU raised almost $12 million from fans in 2019, and big stars like the Chainsmokers, NAS and Diplo followed. Mainstream fans, however, haven’t been thrilled with this – and that’s because “ownership” isn’t enough. You need to change the way people consume music.

In this era of low attention spans, Tiktok and Snapchat, there is one industry that always grabs attention – gaming. Music can learn many lessons from this: to make listening to music immersive, to make the music itself interactive rather than immersive, to make the release of new things an event. That’s what people really mean when they say metaverse, the other buzzword of our time.

But again, consumers haven’t flocked to metaverse platforms like Sandbox and Decentraland, and that’s because there’s not enough to do there. There are not enough activities, enough ‘fun’. Add them and you have a winner.

So what does the future of music look like?

i) An immersive environment where new and existing music releases

ii) The ability of fans to show their fandom in deeper ways than they can in real life

iii) Unleash everyone’s ability to deepen and modify the music they love

iv) Content Ownership – Over the past ten years we have become accustomed to renting content rather than owning it. We are already seeing a backlash against Big Tech’s walled gardens – this trend will accelerate.

v) Content interoperability – Once you have purchased content in one place, you can use it on the internet

The future looks bigger, fairer, more creative and more disconcerting than we are used to. It’s time for a change.

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The author is Founder and CEO, Alive