You know that the
average American
listens to 4 hours
and 5 minutes of audio every single day.
And this is broken down into broadcast radio,
owned music like CDs, vinyls and music downloads.
And more streaming services, satellite radio podcasts and others like
audiobooks.
So with audio consumption extremely
accessible to most people,
it is no surprise that the music industry
is currently worth 57 Billion dollars.
With so much money
floating around the music industry, one might be safe to assume that
musicians are drowning
in cash.
However, the hard truth is that it's brutally hard for most musicians
to make money in the streaming era.
It is estimated that the average working musicians make a gross
salary of $30,200 a year.
The average American wage for 2022 is $53,490.
Artists get paid a fraction of a penny per stream, and plenty of artists make
nothing at all.
So what if crypto had the ability to change that?
Well, on today's CoinMarketCap episode,
we deep dive and explore the intersection between crypto
and music.
So make sure to check
the timestamps down below to easily navigate this video.
My name is Trev and let's just get right into it.
Music in crypto The Definitive Guide.
It has been reported that
musicians often take home less than
12% of the profits from their album sales.
So where's the rest of the cash going?
Well, anybody who knows anything
about the music industry will tell you,
The record labels and ticket resellers are gobbling
up the lion's share of the profits.
The economics of
streaming platforms like Apple Music and Spotify, which
were supposed to make music a
forever industry, have created
an even more brutal situation for artists.
Spotify reportedly pays just a fraction
of a cent, actually about
$0.003 to $0.005 per stream,
which is split between multiple parties, including the record label,
the publisher, the songwriters and the producers, to name
a few.
And the other Streaming sites offer similar rates.
So after the record labels and
streaming sites have eaten up their fill,
the people who write the songs, we love,
are left with the scraps.
Then we have these thoroughly entrenched
ticket scalping and
ticket resale sites
to consider, which hoover up event tickets
only to sell them at ten times the price.
Of course, the streaming sites poor payouts
aren't the only problem plaguing the music industry.
Watching your favorite band play live is an ethereal
often magical experience.
But paying four times over the original asking price
because ticket scalpers hoovered up all the tickets
can dampen the experience.
The scalpers argue they're merely capturing additional value
by selling tickets to willing buyers,
who want them enough to actually pay
a premium for them.
In reality, scalping pushes out
poorer fans who can't afford to pay
thousands of dollars to watch the band's live.
Some ticket resellers, however, like Ticketmaster and StubHub, are
legitimate businesses
because they have permissions to sell tickets
for inflated prices.
But aren't everyone agrees that ticket resellers are necessary and
some see only
a superficial difference between scalpers and resellers?
Chainsmokers Manager Admin Alpert told
Rolling Stone magazine that
the ten billion dollars secondary ticket market is the biggest elephant in the room of the
music business.
Because
it's the resellers and not the artists who are
getting most of the money.
Resellers haven't done much work to improve their image.
A few bought hundreds of tickets to
an Ed Sheeran's concertat the Royal Albert Hall
only to sell them on for thousands of dollars.
Sheeran and his team were understandably furious, as the
ticket sales should have gone to
the Teenage Cancer Trust.
But instead lined the ticket
resellers pockets.
So we've established that the music industry has
some problems.
But it's not all doom and gloom.
Over the past year musicians
have turned to
a new technology to help them level
the playing field
NFTs or Non-Fungible tokens.
Forbes, The Verge and the Rolling Stone have all shared articles about how
crypto music platforms could revolutionize the music industry.
NFTs are the technological
Tour de force driving this revolution.
And to quickly recap, NFTs are digital representations of
art, music or video game skins on a blockchain like Ethereum.
Although there are more use cases for
NFT such as digital identity,
the current NFT market revolves around images or
JPEGs in NFT lingo that are used
as profile pics or PFP.
NFTs have been around since 2014 but only broke into the mainstream
last year in part
because of Beeple's
69 Million dollars NFT sale, that made
headlines around the world.
And it's created digital scarcity.
Which is a quality in the music
industry it badly needs.
Because most media on the web, like
photographs and music, are easily duplicated and plagiarized.
But What are Music NFTs, you might ask.
Well, music NFTs are basically just music audio tracks stored on a blockchain.
So let's just say that you wanted to buy
some NFT music
from your favorite band, The Red Hot Chili Peppers.
You would visit
a music NFT store and simply buy the tracks you want,
just like with today's music stores.
So what's the difference between
a NFT music store and the iTunes store? Right.
When you buy a music NFT you own the music you buy.
Meaning that you can sell it on
a secondary NFT music market.
Just like how you can sell a CD
in a second hand music shop.
So what's more is that every time
a music NFT is sold on
a secondary market, the artist gets a percentage of the sale forever.
Isn't that great?
Well, musicians are justifiably excited by NFTs,
especially those in the EDM community like DeadMau5.
How are Music NFTs better for musicians?
So NFT is for the music industry
sounds interesting, right?
But you're probably wondering
how will NFT help musicians and artists earn a fair wage?
Well, here are five ways that NFTs are getting more money into artists pockets.
Reduce Piracy and Plagiarism.
Music piracy is an enormous problem.
The US economy loses 12.5 Billion dollars annualy
as a result of music theft and
the loss of nearly Half a Billion dollars in Tax revenues.
But NFTs are immutable.
Meaning that when an artist mints an album as an NFT, it's timestamped and
stored in the Blockchain, which
will greatly simplify plagiarism claims and eventually reduce
the quantity of stolen music.
With NFTs you can resell
tracks and albums
on secondary music markets, thereby
reducing the incentive to pirate music.
After all, if you're bored of a band, you can sell their music
and buy music from a new band you want to listen to.
Returning Control to Artists.
Record labels and producers usually decide where an artist's music is streamed or sold,
which is odd. Because other creatives, like painters
and photographers can charge whatever they like for their work.
So why can't musicians do the same?
Well, on the other hand, music production
is a far more collaborative process
than both painting and photography.
So sharing the workload is necessary.
And on the other hand, new artists must sign over control
of their work to labels and producers in exchange for their production
and marketing efforts.
But NFTs could change all of that.
NFTs give artists far more control over where their music is shared
And how much fans need to pay to listen to it.
NFTs also enable.
bands to crowdfund their production and marketing requirements
by selling limited edition NFTs.
And those holding the bands limited edition NFTs
could receive a share of the album's royalties, transforming their role from
fans to investors.
By cutting out the label's role
and being financed by their fans,
artists could keep far more revenue
for themselves than they can today.
While also forming
a closer relationship with their fans,
Faster Payment and Additional Royalties.
Today's musicians
struggle to get a regular paycheck for numerous reasons.
And this is because the music industry
is a behemoth of bureaucracy.
Countless administrators
need to rubber stamp every dollar bill that leaves the record labels that counts.
So artists wait in Nordea lengths of time for their pay cheques to arrive.
But were those artists albums NFTs they wouldn't be waiting
around for a paycheque for longer than a few seconds.
Smart contracts can automate NFT sales
and artists could receive royalties directly the moment every track or album sells.
And what's more is,
should those payments be made in a stablecoin like
Tether or USDC, the artist could theoretically spend the money
directly from the wallet
in businesses that accept crypto.
Those like the Bored Apes Yacht Club or BAYC
and Friends with Benefits or FWB
use their NFTs as tickets to exclusive live events
like yacht parties and raves in Paris.
So there's no reason
musicians couldn't do the same with Limited Edition album NFTs
to give their fans access to in-person meet and greets, private parties or
Online AMAs.
Musicians could also sell digital merchandises
NFTs like hoodies or sunglasses.
So that their fans can wear them around the metaverse or sell them on
secondary marketplaces. Owning NFT merch could be a requirement for entry into
Exclusive Metaverse events
Like the music festival that took
place in Decentraland at the end of last year.
In time NFTs could provide musicians with
a way to interact with their
fans one on one, which would
build deeper connections with their fanbase.
Reduce Concert ticket Scalping.
Live music event tickets could also
be sold as NFTs, which could contain
restrictions on where and for how much they can be resold.
Which would still allow resellers to make some profit
but only at a capped amount.
They might also restrict ticket resales to pre-approved
blockchains or NFT marketplaces.
An agreed percentage of the profit from ticket resales
could automatically go to the band or venue, which would then further
deter resellers from buying tickets in the first place.
Attendees could also be compelled to show their Genuine ticket NFT before being allowed into the gig.
Which would prevent scalpers from using a workaround.
What's more, is all of these restrictions could be programmed
into the NFT ticket themselves
and enforced by smart contracts.
At the end, NFT Tickets could drastically
diminish the music industry's losses
to scalpers and ticket resellers.
But is there a way for musicians to earn more from streaming?
This is where decentralized music platforms come in.
What are the top decentralized NFT music platforms?
While decentralized music platforms
provide music streaming services,
similar to Spotify but with a twist.
They don't prioritize the interests of shareholders over musicians or their fans.
Somewhat you stream music while others operate as
a music NFT marketplace.
One operates as a music creation platform where you can
actually create and mint music directly onto a blockchain.
A string of popular musicians and artists have
bet big on decentralized music taking off, including Katy Perry, Nas and DeadMau5.
Here are some
of the decentralized music platforms that could one day replace
Apple Music and Spotify.
Coming out, Number one is Audius. When you listen to
a song on one of today's streaming apps,
the artist has paid a tiny sum of money about a month after you listen to it.
But what if artists were paid
just a few moments after a fan listen to their music?
Imagine how helpful that would
be for artists who are struggling to make ends meet.
And that's exactly what Audius has set out to achieve.
Audius is akin to
a Decentralized SoundCloud,
where musicians can interact with their fans on a much more personal level.
On Audius artists set the rates of
how much fans should actually pay to stream their music.
So listeners only pay for the music
they actually listen to.
Fans can also crowdfund their favorite artists, contributing to their long term growth.
Up and coming artists
will benefit the most from crowdfunding
as they can bootstrap
their production and marketing costs
after releasing just a few sample tracks.
Which is considerably easier
than fighting for a meeting with a big record label.
In return for their contributions to the band's crowdfund.
The band can reward their fans with a share of the royalties
from an upcoming album or track.
A band's listeners and fans can both invest and
profit from listening to their favorite artists.
Once an artist is streaming music, they receive 90% of their revenue
from their music streams.
The other 10% goes to the people supporting the network.
And while Audius is mostly free right now,
artists will be able to create a premium tier content
that only loyal and paying fans can access at some point.
That premium content
might give fans access to exclusive experiences, like meet and greets, for example,
or early access to a new music.
Audius has so far
received backing from Jason Derulo, NAS, The Chainsmokers, Linkin Park's,
Mike Shinoda and Katy Perry.
While nothing is set in stone,
Audius in prime position to
knock Spotify and Apple Music down a few pegs.
And the next one is Arpeggi Studio.
Arpeggi Studio is the first ever on chain in
browsing music creation platform.
Arpeggi's product is music creation and
editing software
housed on a blockchain which
enables artists to create
and then mint their music as NFTs, all within a single program.
Arpeggi is currently in.
Beta and was developed by a collection
of software developers, musicians, artists and blockchain experts
who share the belief that creatives should be able
to benefit from blockchains and NFTs.
Every time an artist mints a new track, Arpeggi stores
an immutable copy on the blockchain.
So there's no wait times
for artists and intermediaries who are charging fees for storing music.
But doesn't storing large files
on a blockchain costs thousands of dollars?
And how does Arpeggi upload music directly to the blockchain?
Well, they've developed a way to store music in a format that's similar to sheet music.
But which doesn't sacrifice any quality
and requires just 256 bytes.
For comparison, a standard MP3 file is usually around a 1,000,000 bytes.
And going forward
Arpeggi teams hope that
their future collections will incorporate the first ever artists royalty system
for on chain music.
And the next one is Nina.
Nina is a digital marketplace
for music,
and it's somewhat similar to Bandcamp, which is an online record store and music community.
And Nina was launched on to the Solana blockchain by a team
of record label executives in November of last year.
Users can listen to all of the music that's uploaded to
the Platform for free, much like SoundCloud.
However, unlike SoundCloud, artists who upload music
also issue a limited set of tokens,
which fans can buy if they want.
Buying album tokens doesn't guarantee you any specific perks,
but it could get you some pretty cool business
somewhere down the road.
For instance, a musician could say to their fans:
My new album is on sale in a week.
But anyone with a token can
buy and listen to it today.
They could also host token, gated meet-and-greet events
like AMAs or start a discord server where they hang out with their token holders.
Musicians don't
necessarily need to offer certain perks, they can choose to offer none at all.
Although most will offer something.
Otherwise, nobody would have any reason to buy the token.
Like other crypto music sites, the music tokens
also provide residual Royalty payments to
the artists every time they're bought and sold,
hoping to pad their bottom line.
However, unlike most other
crypto music sites, Nina
deliberately steers clear of the crypto jargon.
In fact, you won't even find the term NFT
anywhere on the website.
The idea is to encourage people who are new to crypto
to use the site and not be put off by crypto mechanics.
To further encourage users lacking
crypto knowledge to use the platform,
Nina allows you to pay for music
using the USDC Stablecoin.
It's an early days for Nina, but so far it's showing
a lot of promise.
That said, for today's Coinmarketcap's Crypto and
Music Definitive Guide.
Make sure to let us know in the comments section down below,
if you are already
using any of the platforms that we mentioned.
And if you want to know more about the projects
let us know and make sure to check out Alex in the description below.