We have been covering some aspects of the latest tech trends impacting the music industry. For instance, we talked about the Creator Economy, new monetization means and others that you can easily find in our articles. Among all of them, Web3. What does it imply?
Web3 presents a compelling opportunity for early adopters to scale their growth and income rapidly. This digital evolution represents the customer’s growing role in producing and consuming information. Let’s take a moment and go through Web history:
- Web1 provided consumers with information but no way to engage. Web2 replaced Web1 in 2005. This version allows people to interact with each other. Social networks contributed to the shift from Web1 to Web2.
- Web2’s critical flaw is its reliance on a gatekeeper. Creators produce content for various algorithms. At any moment, these platforms can pull the plug on a musician’s work or reduce traction.
- Web3’s decentralized nature eliminates the need for a middleman. Instead of relying on popular platforms, you can create your own. The communication between creators and their fans becomes uninterrupted. Creators gain deeper ownership of their content rather than the platforms.
In a word, Web3 can help any musician generate new income streams and engage with their fans. Here are some insights to consider when exploring Web3.
How Music NFTs Help The Creator Economy
NFTs are gaining significant momentum. An NFT, or non-fungible token, is a digital collectible backed by the Ethereum blockchain. People can trade NFTs with each other like stocks and other assets. We’ve tackling the issue on our blog a few weeks back.
Music NFTs remove the middleman and allow creators to earn more money from their work. Normally, when a musician sells an album, they only make money on that initial sale.
If a musician sells their album through a Music NFT, they make money on every transaction. When a musician sells to fans, that musician makes money. However, musicians also make a small percentage when fans sell the album to other fans. If an album, song, or other creation gains value over time, the musician will financially benefit from transactions initially conducted years ago.
Music NFTs are one of the Web3 possibilities fueling the future of the creator economy. Removing the middleman puts more money into a musician’s pocket.
We are Still in the Early Stages
Although Web3 presents a tremendous opportunity, we are still in the early stages. Similar to the early iterations of Web1 and Web2, Web3 has attracted speculators and scammers.
Blockchain, the backbone for Web3, is still new technology. We find ourselves in a world of unknowns. Early adopters of Web3 will have an advantage, but you should avoid speculators and scammers along the way.
The benefits for creators are apparent, but end-customers also need benefits. Musicians in the creator economy can offer incentives to people who buy their Music NFTs. They can provide merchandise discounts, exclusive content, and other perks to people who trade their Music NFT. These perks allow creators and their fans to feel like winners. Fans can support their favorite creators more effectively than Web2’s infrastructure allows.
What Can We Do Now?
The creator economy is constantly evolving. Standing still prevents us from exploring opportunities. However, jumping too early without foundational knowledge can also produce a negative outcome.
NFTs look promising, but they are also shiny objects. It’s easy to jump into the rabbit hole with this emerging technology and lose sight of critical objectives. Every musician should primarily focus on producing great music and finding more fans. Music NFTs only work if you have enough fans to support your work. Creating a Music NFT does not put you in front of new fans. A Music NFT with zero fan support will not perform well.
A solid fan base makes it easier to maximize returns on NFTs and other ventures. As you grow your fan base, pay attention to the emerging NFT trend. Web3 is the future, and it’s essential to become prepared as NFTs gradually gain mainstream appeal.
For now, keep the focus on your fans. Engage with them and find new ones. You can also invest in software to help with your business model’s many moving parts. Reprtoir can help.
Reprtoir is a software suite specifically designed for the music industry professionals. When in charge of music catalogs or musical works, it sometimes gets heavy when it comes to manage several types of assets, royalty accounting and various contracts. This is why we created a SaaS solution, a secure online workspace for professional teams. Manage music and works assets, releases, playlists and accounting in only one place. Find out more with us!