How Web3 Music Is Saving Musicians From AI — And the Industry Itself
Is Web3 the biggest thing to happen to music since streaming?
By: Zack Abrams
April 28, 2023
If you hadn’t heard of AI music before this week, you could be forgiven. But now — after a song using AI-generated vocals imitating Drake and The Weeknd went viral and was taken down as quickly as another AI Drake track dropped — maybe not so much.
And AI isn't even the biggest threat to musicians attempting to make a living from their art. Coupled with the growing take rate from streaming platforms, it’s arguably harder than ever to be a musician.
Streaming giants like Spotify have become multi-billion dollar behemoths. Tech platforms like YouTube, Amazon, and Apple have millions of subscribers to their streaming offerings as well, and there are reports that TikTok is exploring launching its own platform.
These platforms are racking up billions of dollars in monthly fees from subscribers, but artists are still struggling to make a living from their streaming royalties. While the streaming era has revolutionized the way most of us listen to music, it hasn’t upended the frequently unfair distribution of profits to artists, labels, and distributors.
Sounds like a use case for Web3, right?
Founders and artists agree. Platforms like Audius, Royal, and Sound allow fans to support musicians through purchasing NFTs. Some artists, like Spottie Wifi, are releasing their own music as NFTs and seeing much greater returns than what they would get from streaming royalties.
Each platform has its own approach to navigating the artist-fan relationship, but all of them are promoting the idea that NFTs can provide a way to deepen the connection between artists and fans, open up new streams of revenue for artists, and provide more upside for everyone than the current streaming-dominated landscape allows.
Coinage has spent the last few weeks talking to artists and founders in the Web3 music space, exploring the different approaches that pioneers are taking in order to shepherd in a new, fairer system for artists and fans alike.
For an overview of what we’ve learned, check out the video above. If you’re ready to go more in-depth, here’s a summary of what we’ve learned from Spottie Wifi, who dubs himself “The CryptoPunk Rapper,” Justin Blau, a.k.a. 3LAU, an EDM music producer and co-founder of the Web3 music platform Royal, Cooper Turley, a Web3 music investor, and David Greenstein, co-founder of the Web3 music platform Sound.
Why Spottie Wifi believes in the thousand-fan theory
On August 18th, 2021, Miguel Mora released his debut album as his new persona — Spottie Wifi, modeled after a CryptoPunk NFT he had purchased a few months prior. But rather than releasing “I’m Spottie” on streaming services, Spottie sold the album as a collection of 2,000 NFTs, with thirty-one different variations.
In sixty seconds, the album had sold out, netting Spottie the equivalent of nearly $200,000 dollars. That’s the equivalent of tens of millions of Spotify streams.
Spottie sees his success as proof of the viability of the thousand fan theory.
“The thousand fan theory says that as an indie artist, especially as a solo artist like myself, I don't need millions of fans,” said Spottie. “I really just need a few hundred or even a thousand fans. If I can provide enough value and enough entertainment that a thousand people are willing to pay $100 a year, then all of a sudden I'm a six figure artist.”
Spottie’s approach is a bit different than some of the other Web3 music moguls we interviewed. While platforms like Royal allow artists to share royalties with fans who buy in using NFTs, Spottie instead includes commercial rights to the song or elements of the song in the NFT itself, though Spottie retains the masters and publishing rights.
“All of my collectors have a mutually aligned incentive with me where we all want the music to become popular, because if the music becomes popular and becomes in demand, then they have a token that they can actually monetize,” said Spottie. “And at the same time, I'm not promising or giving up any of my royalties.”
One major area of agreement between everyone we talked to: Web3 can allow for deeper connections between musicians and artists, turning fans into collectors or partial owners of their favorite music.
“I also encourage artists to figure out ways to give actual utility with their NFTs because I think that's going to be important for longevity,” said Spottie.
You can watch our full interview with Spottie here.
Justin Blau wants fans to share in the success when an artist blows up
As Justin Blau, he’s a co-founder of Web3 music platform Royal. As 3LAU, he’s an electronic music artist whose songs and remixes have racked up hundreds of millions of total streams.
So how does an established artist adopt Web3 music ideals? For Blau, his answer was to start Royal, a Web3 music marketplace where fans can invest in NFTs representing a song’s royalties and eventually profit if the song becomes a hit.
“Historically, you know, fans, listeners, believers, all alike have only been able to consume music,” said Blau. “They have never been able to share in the ownership of music.”
Royal also allows artists to bundle in VIP experiences or extra perks with their NFTs, creating a tight-knit community around their fans and supporters. Curious investors can pay using crypto or a credit card, which lowers the barrier to entry for anyone crypto newbies.
“I think it's a really exciting time even given the changes in the market because we're seeing the most innovation happen now,” said Blau. “We're seeing more people engage with the space than ever before.”
To date, Royal has helped artists raise over $2.5 million and has paid out over $155k in royalties to collectors. The platform has attracted mainstream artists like The Chainsmokers, Nas, Diplo, Vérité, and others. In opposition to Spottie’s approach, Blau doesn’t just want to give synthetic ownership of a digital asset, but rather enable fans to own the real upside of a song’s future success.
“Royal then became an extension of what I felt people wanted, which was to feel real ownership in something, not just synthetic ownership,” said Blau. “Music is inherently different than art, than space, than in-game assets, because by nature it is invisible. And so the way that we own music is just a little bit different.”
You can watch our full interview with Justin Blau here.
How Cooper Turley is turning fans into collectors
Cooper Turley went to school for music business and had a career as a music journalist before he found Web3. Suddenly, everything came into focus.
“When I found NFTs, it became very clear to me that it was a way to build a direct relationship with the artists that you know and love,” said Turley. “And in the past year or two, I've really been able to meet and connect with artists that I love on a very deep level.”
Nowadays, Turley runs Coop records, a $10M fund investing in the future of music. In Turley’s view, the Royal model of distributing streaming royalties to investors makes sense for established artists, while the Spottie model of letting fans collect music makes sense for up-and-coming artists in the Web3 space, which is also Turley’s preference.
“I think the reason why I've spent so much time on the collectibles side is that most of the artists that are selling collectibles don't have established careers on Spotify, so they can't really sell you a percentage of their masters because they're not really worth anything,” said Turley.
Turley acknowledges that NFTs in general have a shaky reputation and sees his mission as trying to convince a mainstream audience that NFTs can provide real value to artists and collectors alike.
“I do think we need more ways to show that these NFTss can actually be valuable to someone's fan experience and to their lives beyond the act of just collecting a limited edition vinyl that actually saves them time or money,” said Turley.
You can listen to our full Twitter Spaces with Cooper Turley here.
David Greenstein wants independent artists to herald the revolution
David Greenstein’s platform, Sound, has its own unique approach to integrating Web3 with the music world. On Sound, artists debut new music and collectors purchase NFTs in real time. The NFTs then let collectors add a public comment to the song, with the idea of letting fans cryptographically prove that they were the first to hear the next big viral sound.
“At its core, I think the use case of Sound was really to help the up and coming independent artists. And I think the main thing is you want flexibility,” said Greenstein. “I think giving artists the tools and flexibility [...] is part of changing the narrative of, you know, having this one fixed price for music, which has largely been there.”
While Sound started out as a curated platform sharing drops from artists like Oshi, Marian Hill, and Allan Kingdom, Greenstein is eyeing plans for expansion.
“My goal was to always get it open, mainly because I think the tools to monetize your music are for every artist, it's not for a select set,” said Greenstein. “And so, you know, we're on that path and shipping all the things that we need to get done.”
Greenstein sees his approach as toeing the line between the models we’ve discussed thus far. While collecting a song on Sound doesn’t come with any royalties, the songs are actually stored on-chain. Eliminating the financial relationship between artists and collectors also means that the fans won’t disappear if a song doesn’t blow up immediately.
“I think the thing that makes Sound different is the ability to pay an artist while building community around their music without giving up any of your rights and also still reward collectors,” said Greenstein.
Independent artists, after all, often cultivate some of the most passionate and tight-knit fanbases. But ways to directly support artists are few and far between, and streaming platforms like Spotify don’t make it any easier to become a patron of your favorite band.
“If you go on Spotify and you love a song, it changed your life, it's your favorite song ever, and you want to give it $5, not because the artist asked you to but just because it's your favorite song of all time, there's literally no way to do so,” said Greenstein.
You can listen to our full Twitter Spaces with David Greenstein here.