How Will Web 3.0 Change The Music Industry?
The music industry is one sector that is set to be radically transformed by Web 3.0’s emerging technologies. From putting more power into the hands of artists to creating novel revenue streams beyond the music itself, there is significant potential for paradigm shifts within the industry. Here are the key ways in which the introduction of Web 3.0 in the music industry is set to reshape the current landscape.
Empowering the artists
The economics of the music industry are based on the creation, ownership, and monetisation of music rights. Historically, this has meant many artists have gotten a raw deal, beholden to a reliance on record labels, music executives and streaming services to promote and sell their music. But with the uptake of Web 3.0 in the music industry we are starting to see a shift in power, from third-party promotion avenues into the hands of the artists.
Musicians can now tokenise their songs or album releases, allowing fans to purchase limited-edition NFTs that grant them exclusive access to the music or other perks. From Kings of Leon making 2 million from NFT sales of their album to Dua Lipa launching her own NFT collection, artists are turning their music and merchandise into digital assets and making millions in the process.
More revenue streams
Increasingly, Web 3.0 digital assets like cryptocurrencies and NFTs are being recognised as property under English law. This allows for more complex financial mechanisms to be implemented compared to more traditional digital assets. Web 3.0 in the music industry is opening up new ways to monetise an artist and their music through the sale of digital assets rather than music rights and royalties. Smart contracts also help streamline the payment process and ensure fair compensation for artists through automating royalty payments.
New ways to connect with fans
Web 3.0 is bringing new ways for musicians to connect with their fans through immersive music experiences. In 2021, over 78 million Fortnite users tuned in to Ariana Grande’s five virtual concerts within the game, netting her an estimated $20 million in the process. Many major artists have been capitalising on these virtual concerts to engage with the digital audience, drive fan loyalty and generate large profits.
Platforms like Royalty Exchange allow fans to purchase fractional ownership of songs or albums, in turn allowing them to earn royalties based on streaming and sales. This is mutually beneficial for both fans and artists by giving fans a stake in the success of the music they love.
These direct-to-fan approaches empower artists, enabling them to retain a greater share of their earnings and build stronger relationships with their supporters.
How the music industry can effectively implement Web 3.0
A clear and well-defined strategy is essential for any Web 3.0 project – be it in the music industry or any other sector. For it to be a success, companies need to be crystal clear about their motivations and objectives when implementing Web 3.0 technology for their project. This comes from having a comprehensive understanding of the use case of your project, how it will drive growth, and improve both your top and bottom line.
As experts in software consultancy and technology strategy, our discovery process allows us to drill down to the core of what you want to achieve as a business. Then our strategists plan out exactly how to get there, with your brand goals firmly in mind.
De-risking your Web 3.0 projects
Businesses looking to explore future projects must be mindful of the increasingly robust law and regulation surrounding Web 3.0 and its associated technologies, from securities law and the promotion of crypto assets to data protection and tax obligations. Launching a Web 3.0 project in the music industry is a high-stakes game. One that, without the right expertise and strategy in place, becomes an extreme challenge to navigate.
Businesses must take an iterative approach to Web 3.0 projects to de-risk their proposition or product offering. At MDRx, our compliant-by-design approach leverages the best-in-class lawyers from the Mishcon de Reya Group, ensuring that your Web 3.0 project is legally sound from the very beginning.
We have worked across a broad range of sectors to implement innovative Web 3.0 strategies for world-leading international brands from Selfridges to global motorsports brand Veloce. We have also utilised AI and machine learning for clients within the music industry to improve their overall business processes through automated data collection and royalty payments.
As for Web 3.0 in the music industry, artists and stakeholders have the prime opportunity for greater monetisation, stronger community engagement and more creative freedom. All provided correctly, they have a solid digital transformation strategy in place.
If you would like to find out more about Web 3.0 technologies and how they can enhance your business, then get in touch. At MDRx we work with global brands to harness the very best emerging technology to drive impactful results.