According to IFPI’s Global Music Report, the music sector generated record revenues of $25.9 billion in 2021, growing 18.5% from 2020. Of that nearly $26 billion, streaming was the primary driver of growth, up 24.3% from 2020. These patterns are great news for the burgeoning class of NFT musicians and underscore the demand for both audio and video content.
Even as the way streaming is done changes – from centralized platforms like Spotify to decentralized NFT marketplaces – streaming will remain. The rise of streaming is part of a broader transformation from media and entertainment to digital content – print media is fading fast. Digital media started replacing print media years ago, with profound effects on the industry. Economists note that the shift towards national digital media is related to the decline in local newspapers and partly explains the focus on national issues and increased politicization.
But we have the opportunity to do things differently in the emerging Web3 era. We’re now seeing the emergence of individual musicians coining and marketing their own NFTs — and keeping the majority of the revenue rather than ceding it to record labels or other intermediaries.
Related: Web3: Onboarding the Next Billion Users – The Way Forward
Many commenters have already pointed out that community building is important for successful NFT projects. In the absence of a centralized platform to help spread content at scale, NFT artists must rely on their own networks and personal connections to spread the word. In many ways this requires different skills than producing the music, namely lots of soft skills and some financial savvy – at least enough to know when to say yes or no to an opportunity.
However, such skills are not taught in traditional music programs. Instead, they have a heavy focus on vocal technique and music history, which are useful to varying degrees, but are not alone sufficient for a successful career as a musician. That’s one of the reasons record labels and centralized entities were so useful – they helped fill a shortage many musicians had through no fault of their own.
But community building isn’t just a means to an end of selling NFTs—it’s also a highly interactive and dynamic process that feeds into an artist’s underlying art. Unfortunately, the usual centralized model for media and entertainment not only requires musicians to divest themselves of much of their potential revenue, but also their rights and governance. They can’t even make decisions about their own music without getting approval from their controlling entity.
While some people might still be ok with that, artists across the board hate giving up that kind of creative autonomy and control — especially when they’re not getting paid well for it. Salaries for performing artists are projected to have limited growth over the next few years, suggesting little is likely to change unless we deviate from current trajectory.
Related: The Metaverse will change the live music experience, but will it be decentralized?
Music was never designed for centralization. Artists create experiences that others can enjoy together. Though record labels talk about building a community, the proof is in the pudding – musicians struggle across the board, and often not from a lack of talent but from a lack of financial and business expertise that leads them to deals with record labels that do doing so does not serve their interests. Fortunately, we’re seeing an emergence of decentralized options, most recently the announcement of MuseDAO, which aims to bring classical musicians together and spearhead local gatherings and gatherings with the goal of enjoying and expanding culture.
Immersive digital experiences
Previous coverage from Cointelegraph has already highlighted the financial benefits that music NFTs offer artists through first-time sales. We don’t have to look too far to see the windfall that talented musicians have brought home, most notably Justin Blau, known by his stage name 3LAU, as one of the early risers through his Ultraviolet NFT drop last year.
Related: Journeys in Blockchain: 3LAU, DJ and producer
What the latest streaming numbers highlight, though, is that there’s a growing audience for music NFTs beyond just streaming — if that were all we’d expect steady, non-exponential growth. Instead, we saw continued momentum as consumers seek more audio and video content to consume and enrich their lives, rather than traditional print media.
NFTs have the potential to open up an incredibly exciting and new market in the creative industries. If we think of artists—and content creators more broadly—as people who help build experiences for others, then NFTs become a vehicle for transmitting and authenticating unique artistic content.
While there has been talk in the Metaverse of buying music-related NFTs — especially for fashion — imagine if creators came together in the Metaverse to create immersive digital experiences that simultaneously combined audio, visual, and potentially other forms of content. The creative possibilities are limitless, and the NFTs can be used to enable more than just recreational activities – such immersive experiences can also directly support educational and training needs.
Although there are now several examples, Arizona State University, in partnership with Dreamscape Immersive, launched the Dreamscape Learn project in 2020. As Michael Crow, President of Arizona State University, said:
“We’ve always known that there was tremendous potential to unlock new areas of learning for students by merging VR—and everything that supports it educationally and socially—with progressive, adaptive educational experiences.”
The latest streaming earnings and the expansion of the music sector is great news for content creators across the board. The data shows that there is more demand than supply, so NFTs and Web3 tools are poised to help developers capitalize on these trends to become not only financially sustainable, but even more compelling and immersive experiences in the Metaverse for the to create society as a whole.
This article does not contain any investment advice or recommendation. Every investment and trading move involves risk and readers should do their own research when making a decision.
The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Christos A. Makridis is a research affiliate at Stanford University and Columbia Business School, as well as the Chief Technology Officer and co-founder of Living Opera, a multimedia-art-tech-Web3 startup. He received his doctorate in economics and management science and engineering from Stanford University.
https://cointelegraph.com/news/record-music-streaming-profits-highlight-how-nfts-will-empower-content-creators Record music streaming profits show how NFTs will empower content creators