Web3 technology isn’t in vogue like it was last year. But it’s still the future of the music business.
The following MBW op/ed comes from Sergio Mottola (pictured), the co-founder and President of Public Pressure, a Web3 media company headquartered in London that runs its own NFT marketplace.
Only a very small percentage of global musicians make a living wage, while the vast majority struggle. There is a problem with wealth distribution in music.
How do we do something about that?
How do we re-engineer the way technology can support the music industry and re-think the way we reward creators?
Let’s start by acknowledging a fact: most artists make the majority of their money from events, merchandise, and other ancillary sources rather than from their recorded music income.
Solely relying on streaming is not sustainable for the vast majority of creators in the long term.
At the same time, we need to acknowledge that despite the convenience and accessibility of streaming, music fans like to own things. We only have to look at the exponential growth of vinyl sales in recent years, for example, to see this in action.
So how can we re-capture music fans’ love of ownership – while providing more value to all involved, including those who actually make the music?
Web3 technology, a decentralized online space built on innovations like blockchain technology and metaverse applications – despite its false starts in the music industry – can, I believe, provide a compelling answer.
But let’s be honest; like all disruptive technologies, Web3 has and will continue to go through many iterations before becoming a stable, fully scaleable, and widely adopted concept.
You only have to look at the music industry’s current fascination with / suspicion of AI to see that. There are bursts of exciting activity and masses of potential, but it still has a long way to evolve before it becomes truly accepted and embedded in our lives.
Web3 is the same story. Nobody ever said reimagining things on this kind of scale was going to be easy.
It’s natural that there should be some skepticism about the real-world potential of Web3.
Some of that skepticism is based on the complexity of today’s offerings. And some of it undoubtedly can be blamed on the over-promising, under-delivering, and poor execution of some of the early evangelists in the sector.
I have been working in digital innovation for over 25 years and in the crypto sector since 2015.
In 2017, as Chairman/CEO/Director of the Scientific Committee of the Republic of San Marino Innovation Institute, I had the responsibility of shaping the expansion policies for this sector.
I still very much believe in the value proposition of Web3 and the fact that it is capable of changing the world.
The most talked-about application of Web3 technology in the music industry currently are NFTs.
Building on my previous theme , the unfortunate actions of certain parties mean that NFTs now carry an aura of instability in the music market – even suspicion.
But it’s important, before we throw the baby out with the bath water, to remember some of the great things about NFTs: the creator and/or content owner sets the origin, the property, and licenses. They then also program the business model, before setting their own payment terms.
With all of that in place, new economic opportunities begin to open up.
One of the core beliefs underpinning Web3 is that everyone in the supply chain should add value to the artists – not the other way around.
My hope is that, via Web3, artists can start to truly control their own fan communities.
There remains way too much gatekeeping in the music industry today. That’s why ultimately I believe deeply in the possibilities offered by Web3 technology.
Properly implemented, artists should have the tools to participate according to their own rules.
Decentralizing traditional commercial relationships via Web3 carries the promise of keeping artists much more engaged with their fans, while allowing traditional industry players – so long as they add value to a project – to take a more service-based, transparent role, rather than a gatekeeping one.
Web3 should not necessarily be about taking over or replacing existing music distribution platforms (at least not in the short term). And it certainly shouldn’t be about over-hyping (or outright hiding) the real financial returns of NFTs from consumers and artists.
Migrating consumers to Web3 today should always be about the music first.
Beyond that, the mission is the continued evolution of this amazing technology – and its ability to make things user-friendly, equitable, and fair for artists.Music Business Worldwide