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DSPs will lead the mainstream Web3 acceptance of music, but fan-run music communities will share the riches

In the following MBW posts, Bruno Guez, CEO of Digital Rights Administration Company Revelator, suggests that 2022 will be the year when DSPs/Distributors support the adoption of Web3 and the incorporation of NFTs and blockchain technology for rights and royalties . The publication of this comment follows news that the world’s largest music streaming company, Spotifyis currently recruiting for Web3 experts.


It’s hard to ignore the fever and fervor surrounding web3 in general and NFTs in the music space in particular.

Artists and fan communities were the first to embrace the game, experimenting with drops, NFT-bound royalties, DAOs, and fan-centric projects.

Now, Big Tech is bringing NFT-related features to their creator-centric platforms faster than you can say “meta.” All from Twitter to Instagram to youtube and Microsoft announce new web3 features or initiatives. Web3 is being phased out at major music services. Big labels are also unveiling their first deals with NFT marketplaces.

You see the writing on the wall: Web3 is too great an opportunity to pass up. But the change we are just witnessing will not happen overnight. That’s the music business, after all.

Like the shift to streaming, Web3 adoption will be a gradual, two-pronged process, driven by fears of insignificance but held back by the complexity of the music industry’s ownership-based business model. Finally, in web3, business actors must become participants and not owners.

Similar to streaming, a significant mindset shift needs to take place to enable cultural and technological adoption. The end result will be a larger overall music IP market, but that bigger pie will be more broadly distributed. The era of big player consolidation could be coming to an end.

DSPs, not labels, are the ones most likely to change consumer behavior. You have the option of connecting Web2 interfaces with Web3 protocols. Consumer patterns are often shifted by the market makers, not the other way around. We saw this in the streaming transition, when innovators convinced consumers to opt for P2P networks like an all-you-can-eat, subscription-based approach Napster enticed music lovers to indulge in free music files. These tastes and habits have been shaped by services, not the other way around.

DSPs and the industry as a whole know they can’t own web3; You can only participate in decentralized applications and distributed ledger technologies. Instead, DSPs will try to figure out how to leverage these new protocols and applications to increase consumer adoption and gain market share in the next generation of the Internet.

To secure this share, DSPs must address web3 user experience challenges. The vast majority of people will be slow to adopt Web3 protocols due to their complexity and cumbersome nature without custody. Yet they will still want to buy collectibles, engage in defi, manage crypto assets, or even have fractional ownership of intellectual property.

Most marketplaces are required to offer a mix of crypto and fiat onramps to facilitate Web3 transactions. Most consumers who don’t want to deal with the complexities and security of managing private keys will use the marketplace’s custodial services or managed wallets to hold digital assets. Security is compromised by hacker attacks on marketplaces.

“DSPs and the industry as a whole know they can’t own web3; You can only participate in decentralized applications and distributed ledger technologies. Instead, DSPs will try to figure out how to leverage these new protocols and applications to increase consumer adoption and gain market share in the next generation of the Internet.”

Bruno Guez

In general, interoperability and optionality are becoming increasingly important. Five years from now, people won’t care what blockchain they use to mint assets, or worry about the gas or transaction fees. They will simply have a wallet managing their assets across networks.

However, tensions between web2 and web3 go beyond consumer behavior and may determine the future of the music business. DSPs and distributors will want to leverage web3’s capabilities to monetize music IP and create new revenue streams for creators.

At the same time, wealth can be distributed to a larger population once incentives can be thoughtfully integrated into Web3 tokenomics. Fanbases around the world will take a more active role in marketing in ways very different from how they behave today. The BTS Army goes mainstream as an active marketer.

The music IP marketplace is said to be worth $1 trillion. Most of the growth in recent years has come from the independent sector of this market, the smaller labels and self-managed artists who have every incentive to build authentic, fan-driven communities of people who share their vision. This is a stronger draw for many music lovers than an easy-to-use interface.

In a way, we will see a “hard fork” in decentralized music activity: the big platforms promoting hybrid models and the more grassroots, artist-driven, culturally relevant activities making the best of tokenized communities, DAOs, and other models yet to dream. These models, in turn, will distribute the wealth generated by music IP to more people.

The contributor economy will drive this evolution from the ground up, becoming a new center of wealth for creators and their followers. This is an exciting prospect for all of us who love the vitality and creativity of music communities.music business worldwide

https://www.musicbusinessworldwide.com/dsps-will-lead-musics-mainstream-web3-adoption-but-fan-powered-music-communities-will-share-the-wealth/ DSPs will lead the mainstream Web3 acceptance of music, but fan-run music communities will share the riches

Fry Electronics Team

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