Music in Web3: What happened in the music industry in relation to Web3 in 2022?

Since the rise of streaming music services, it has become easier for musicians to find a wide audience for their music. Unfortunately, these services have made it harder for them to earn a living, as they typically only pay artists around a few cents per stream. Hence, musicians still need a better way to make a living. 

With Web3, the next generation of the internet makes it possible for them to connect with their fans and make a living from their music. 2022 has been a year that the music industry has embraced Web3. New platforms and apps have come up to this effect. In this article, we shall look into what the music industry looked like this year with the incorporation of Web3.

So, what did the music industry look like in 2022? Let’s dive in.

An explosion of Web3 deals by major labels

Warner Music Group(WMG) and LGND.io recently announced their partnership which is the latest example of the company’s growing interest in web3 projects. Notably, WMG has partnered with other projects, including The Sandbox, OneOf, Stickmen Toys, POAP, and Probably A Label, since May 2021. 

These partnerships indicate how quickly the company is moving to establish its presence in the space. Other major music companies, such as Sony Music and UMG, are also moving in this direction.

The increasing number of partnerships between major music companies and Web3 startups indicates that the industry is starting to understand the importance of decentralization and artist control in the space. That is why the major labels must be involved in developing web3 music.

Web3 music startups continued receiving funding 

Despite the overall decline in sales, companies exploring the potential of web3 music still managed to secure funding. Some of these include Ready Player Me, which raised over $55 million, Jadu, which brought in $36 million; and Hume, which got $11.7 million.

The companies directed the money to fund projects expected to launch in 2023 and beyond and help establish new artist partnerships and business ventures. 

Big streaming and social platforms ventured into the space

In 2022, various major streaming and social platforms started exploring web3. Among these were Spotify, Instagram, Meta, YouTube, and Snapchat. Instagram had a similar feature for its creators, while Spotify started testing a feature allowing artists to promote NFTs on their profiles. Meta had also started testing an NFTs app on Facebook, and Snapchat was briefly featured as an AR lens test before retreating from it.

As the major streaming and social services continue to look into the use of NFTs, they are asking themselves the same questions that artists and labels have been asking: What should we do with them? The most cautious approach so far has been to test the waters with small-scale tests.

One of the main arguments that people are making is that the major streaming and social services are still firmly focused on Web 2.0 services. They are going to need help to become web3 platforms that are built around decentralization and transparency.

Many people making this argument say that the major streaming and social services are killing Instagram and Spotify by having a few hundred users each. That dynamic will be worth watching in 2023 as the companies continue to explore Web3. In addition to competing with the established platforms, Web3 allows them to go beyond their NFT galleries.

Launchpads for virtual artists: NFTs and DAOs

In Web3 music, not all artists are necessarily human. Some virtual artists are the center of things. For instance, in Kingship, a project by Universal Music Group, the company has used Bored Ape characters as its musical inspiration.

Under the “WarpSound” banner, Authentic Artists is currently taking virtual artists into mainstream music experiences and has secured funding from Warner Music Group. Hume, another startup, is also developing “metastars,” which are the vehicles for NFTs, and has launched its own virtual artists under the “micro-NFTs” category.

Virtual artists come with several problems, such as the fact that they can only be considered a viable project if the music they produce is good. Some ventures spend more time developing their characters and pricing structure rather than focusing on the quality of their music.

There are also interesting areas between virtual artists, fan communities, and NFTs. For instance, in generative music, characters are designed to perform in various digital environments. They do not take on the role of Taylor Swift or Bad Bunny. Instead, they are designed to be live and performed in different contexts.

NFTs don’t guarantee secondary royalties

The concept of secondary royalties from non-fungible tokens (NFTs) has been under increasing discussion as the various consequences of this issue have been revealed. Royalties encompass the idea that NFTs creators can earn money from the original buyers of their tokens, which is a key component of the appeal of these tokens. Unfortunately, the lack of artist revenue from resale tickets and CDs has been a sore point for music fans.

In November, OpenSea revealed that when they made NFT sales on its platform, other platforms resulted in zero royalties, such as LooksRare. That caused a backlash, and the company then clarified that it would still implement these fees on an “on-chain” basis. However, visual artists and musicians are less than guaranteed the secondary royalties promised in the future.

Big moments in the music industry 2022

Royal and Nas’ NFTs sell out in minutes

In January, the music NFT started with hip-hop legend Nas being immortalized on the blockchain. In a dual-part drop, Nas teamed up with 3LAU to release his first-ever NFT collection on the superstar DJ’s platform, Royal. 

The collection — the first live sale of NFTs on Royal.io — consisted of 1,870 NFTs across two separate drops, both of which sold out in record time and generated more than $560,000 in total revenue.

Dillon Francis signs residency deal for Bored Ape NFT

Dillon Francis, a popular DJ, and producer, made a name for himself in the music non-profit space in 2022 with his Latin Grammy nomination and multiple awards. In March, he agreed to a residency deal with Big Night in exchange for a non-profit trust fund (NFT) from Bored Ape’s collection.

Francis was able to receive BAYC #378. In addition, he worked with the electronic duo ESCAPPLAN, which consists of zeETH(#309) and ETHan(#4321), which was a record collaboration.

A Lifetime Festival Pass Offered as Part of Coachella’s NFT Collection

Coachella, one of the world’s most popular festivals that happened in February, introduced various digital collectible products. The event’s partnership with FTX, a controversial crypto exchange, made waves. The partnership involved the release of a series of NFTs.

Coachella Collectibles sold 11,010 NFTs in three different collections, giving fans a chance to purchase lifetime passes and experience the festival in various ways. Unfortunately, FTX went out of business, but the venture remains significant in the music non-profit space.

Death Row NFT Mixtape by Snoop Dogg

Less than a month after he took over Death Row Records, the label that helped him become famous, rapper and entrepreneur Snoop released a collection of songs on OpenSea called Death Row Mixtape Vol.1. It features full songs and acapellas he created in collaboration with other artists.

During the time of the NFT market’s growth, “Dogg on it,” NFTs could give their owners full rights. That was an ideal platform for the hip-hop community to gather. In April, the rapper released Death Row mixtape Vol. 2, which featured an even bigger roster of musicians and Web3 artists.

Coachella X Odesza NFT Breaks Solana 1/1 Sales Record

An NFT featuring a 360-degree view of the Antarctic Dome at the Coachella festival was sold for $145,000 on April 18. It was the highest-ever non-PFP sales record for the Solana blockchain. This NFT features the work of nine digital artists and the score of ODESZA, and it only took around six minutes to create.

NFTs took Over the Grammys

Shortly after the release of Snoop’s new single, NFTs made their debut at the Grammy Awards. The event, which is the most prestigious event in the music industry, partnered with OneOf, a leading NFT platform, to create an official collection. The first collection featured some of the industry’s most prominent artists, such as ThankYouX,3D animator and Adult Swim contributor Andre Oshea, and Emmy-winner Emonee LaRussa.

Salem Ilese and Pussy Riot Drop ‘Crypto Boy’ in support of reproductive rights

In 2022, Salem Ilese gained widespread attention after her song “Crypto Boy” went viral on social media. To keep with the spirit of the track and with a charitable purpose, she collaborated with Nadya Tolokonnikovah of Pussy Riot.

Due to the increasing opposition to women’s reproductive rights in the US, Tolokonova and Ilese collaborated with TikTokers’ Sad Alex for a music project known as “Crypto Boy.” All of the money from the collection’s primary sales will go to the Center For Reproductive Rights.

They widely promoted the project on Sound.xyz, stating that it was one of the first songs in Web3 music to go viral. It also exhibited the power of collaboration and philanthropy. The song, appropriately named “Crypto Boy,” was a testament to the power of non-fungible tokens (NFTs) to be used for charitable purposes.

Pharrell Williams joins Doodles as Chief Brand Officer

In June, at NFT.NYC, the company announced a variety of changes. One of these was the appointment of legendary musician Pharrell Williams as the new Chief Brand Officer of the PFP project. This news came just a month after Julian Holguin was named the company’s new CEO.

It needs to be clarified what the plans are for the project, but they announced that the company would be breaking into the world of music through its subsidiary, Doodles Records. The first compilation of original music, which will feature executive production by Pharrell, will be released in the coming months.

Songcamp launches Camp Chaos NFT Collection

In March, Web3’s SongCamp, a collective laboratory experimenting with blockchain and music technology, created one of the biggest music projects in the NFT space. It was tasked with creating 45 songs, which would be released as part of a collection of over 20,000 unique tokens; Chaos was incepted as a 77-person “headless band.”

SongCamp’s third project, Chaos, was composed of various individuals from different backgrounds. It was an ambitious project that sought to create a new revenue model for music collaborations. Through its use case, the community created a unique and innovative way for music publishers to split revenue.

A Bored Ape-masked DJ took over Tomorrowland’s main stage

The production and DJ project known as the Ape Rave Club was founded by some of the most talented producers and creatives in the dance music industry. At the 2022 edition of Tomorrowland, which took place in Belgium, a single DJ took the stage to perform an hour-long set. He wore a Bored Ape helmet and sported BAYC merchandise, and played the track “Dance Alone.”

Limewire returns with a focus on WEB3

Like other services and brands that were discontinued, LimeWire was also able to reinvigorate itself by focusing on Web3 and NFT. In April, it closed a $10.4 million token sale, which allowed it to launch its marketplace. The platform featured collections from various artists. Some featured artists included A$AP Ty Y, Soulja Boy, Travis Barker, and Dillon Francis.

Warner Music Group partners with OpenSea

Despite being relatively unknown in the metaverse until October, WMG strengthened its position by collaborating with OpenSea. This partnership would allow the company to provide a platform for artists to build and extend their fan communities on Web3.

Anderson. Paak performs at The Gateway

The Gateway, located in Miami’s The Gateway, was the site of NFT’s Art Basel event, which brought together some of the most influential individuals and organizations in the digital arts community. Throughout the five-day festival, attendees could enjoy free entry to various art activations and panels and a surprise performance by Anderson .Paak, also known as DJ Pee .Wee.

The event was able to showcase the vibrant community of Web3. The crowd attending the top-level performance filled a large street in Downtown Miami.

Secondary sales volume crosses $5 million for Sound

In November, Sound.xyz, combining a platform’s monetization and streaming capabilities, reached its marketplace’s $5 million mark. That was a significant achievement for the company and further highlighted the viability of Web3 music. While the major proponents have been trying to educate their listeners about the value of tokenized content, this was Sound’s first step in addressing this issue.

Not all was good news

In China, Web3 music’s fate is different from that of its counterparts in the West. In November, TME, a Chinese tech giant Tencent subsidiary, closed its collectible digital platform, which launched in August 2021. TME has not provided an official explanation regarding the platform’s closure. However, people have noted that since June, the platform has yet to issue new entries. In August, the company closed its main digital platform, Magic Core.

The failure of Web3 to capture the significant digital music market in China is not because TME didn’t feature work from prominent artists, such as Tengger and Lo Tayu. Instead, the founders built the company’s platform on a unique metaverse development model.

Due to the potential risks associated with cryptocurrencies, China’s government has prohibited the second-hand trading of digital art. That has reduced the incentives for musicians to mint their products, as these have no resale value and are unlikely to provide them with long-term earning potential.

Final thoughts

The music industry has, since years ago, been criticized for its uneven revenue distribution. It heavily relies on technology and creators to survive. Hence, artists have always been the ones who have been left behind when it comes to making music. But through Web3, artists can now take advantage of the fruits of their hard work.

The emergence of new technologies, such as NFTs, has created ripples in the financial, tech, and creative sectors. But the music industry is showing the most potential for utilizing blockchain technology to facilitate the ownership and co-creation of intellectual property. Hence, 2022 is worth celebrating for the various music NFT moments in 2022 and beyond.