Web3 Music: Creating a New Type of Music Ecosystem

The Web3 music sector has recently received widespread attention from capital and the community. Since 2021, the total financing for Web3 music projects has exceeded $200 million, and the ecosystem is growing increasingly robust. This article will start from the issues of the traditional music industry, explore the necessity of Web3 music, analyze various segments of the industry chain, and reflect on future development prospects.

1. The Necessity of Web3 Music

The traditional music industry has the following pain points:

1. Artists have low income. For example, with Spotify, artists earn only $0.003-$0.005 in royalties per play. 99.3% of musicians earn less than $10,000 a year.

2. The industry chain is long and opaque. From streaming media to artists, there are multiple intermediate links for profit sharing, and the final amount received by artists is minimal.

3. There is "black box royalty." Approximately $655 million in royalties are unaccounted for each year.

Web3 music can solve the following problems for artists:

1. Generate income directly through NFTs. A music NFT worth 0.1 ETH is equivalent to 67,000 streams on Spotify.

2. Establish a follow-up development fund. NFT sales can raise funds for future projects.

3. Engage in positive interaction with fans. Fans can share the growth rights of artists, forming a one-on-one relationship.

2. Analysis of the Web3 Music Industry Chain

The Web3 music industry chain mainly includes:

1. Upstream: Music Creation
2. Midstream: Trading Platform
3. Downstream: Streaming Playback
4. Others: Copyright, fan economy, etc.

2.1 Streaming Platform

Representative Project: Audius

Features:

• No wallet required, user-friendly for Web2 users
• Rich music resources, in collaboration with TikTok
• Open API for third-party applications to call
• The token incentive mechanism needs improvement.

2.2 Trading Platform

Main platform:

• Sound.xyz: emphasizes social attributes and adopts a fragmented model.
• Catalog: Complete single 1/1 sale
• Pianity: Unique token incentive mechanism
• OneOf: Comes with traditional traffic IP
• Mint Songs: Powerful investor resources

2.3 Music Creation/Generation

Representative project:

• EulerBeats: Algorithmically Generated Music
• Async.Art: Highlighting the composability of music

2.4 Royalties/Fan Economy

Representative Project:

• Royal: Sell artist royalties to fans through NFTs
• Opulous: Similar to the Music+DeFi model

2.5 Web3 Music Community

Representative project:

• Songcamp: Web3 Music Creation Experiment
• Good Karma Records: Web3 Record DAO

III. Thoughts on the Development Prospects of the Industry

1. Strengthen the closed-loop economy between fans and artists, but the commercial chain is still short.

2. Improve the transparency of the industrial chain, but the operational difficulty is high.

3. The application scenarios for music NFTs are yet to be explored.

4. Traditional Web2 music resources cannot be ignored.

5. The music dissemination and promotion model urgently needs innovation.

6. The token economic model design needs improvement.

Overall, Web3 music is still in its early stages, with immense potential for future development. The key lies in how to balance the concept of decentralization with the resources of the traditional music industry, creating a new type of music ecosystem.