Reasons why crypto music is becoming increasingly popular in the music industry
Crypto music and music NFTs are becoming increasingly popular in the music industry. Musicians and industry professionals are starting to use cryptocurrency to facilitate transactions, fund and monetize their work, and increase financial transparency for licensing and distribution.
NFTs, unique digital assets, allow artists to authenticate and sell their work. Fractionalized music rights enable anyone to invest in their favorite artists. New forms of licensing and distribution give advantages to artists that have not been present in the traditional industry. There is a revolution in the music industry, and decentralization is making it happen.
While adoption is still in the early stages, these technologies' potential to change how music is created, distributed, and monetized is gaining recognition.
Crypto Music Solves the Black Box Problem
It is not news to anyone who understands cryptocurrency that peer-to-peer transactions and transparency are at the core of most blockchain networks. In contrast, a significant chunk of the music industry suffers from a black-box problem where there is a considerable lack of transparency in the distribution of profits from the sale of music. In the traditional music industry, many intermediaries are involved in the distribution and sale of music, such as record labels, distributors, and streaming platforms. These intermediaries take a cut of the profits, which can make it difficult for artists to understand how much money they are making from the sale of their music. Artists are, after all, artists - not accountants.
The black box problem can be incredibly frustrating for independent artists who may not have the resources or support of a major record label. It can also lead to inequities and misunderstandings in the distribution of profits, as some artists may not be aware of all the sources of revenue for their music. By providing a decentralized and transparent platform for the distribution and monetization of music, these issues are addressed, the flow of funds can be understood, and revenue distribution no longer relies on trust.
Music Distribution and Management Rights Upended
Web3 music has its share of hurdles to overcome before the industry sees change. For one, the traditional music industry, as it stands, seems to resist change and, whether through stubbornness or necessity, closes the door on innovation when it doesn't suit them.
There are dozens of companies fighting to innovate with the modern tools afforded to them by blockchain tech. Royal and AnotherBlock are working towards fractionalized streaming royalties on-chain. Unchained Music is doing distribution and payments. Dequency, sync licensing. Each company comprises industry insiders, independent musicians, and music nerds looking to fight for change in an industry that badly needs innovation.
The Rise of NFTs for Independent Music
Independent musicians use NFTs by creating and selling limited-edition digital music releases on crypto music platforms such as SoundXYZ or Catalog. These releases may include exclusive tracks, artwork, or other bonus material only available as an NFT. Artists, in some cases, can also use NFTs to sell physical items, such as limited edition vinyl records or merchandise, that the NFT authenticates.
NFTs, and web3 as a whole, allow for greater control over the distribution and monetization of music so artists can set the terms for how their music is used and distributed and can receive a larger share of the profits from the sale of their work. It's a process with fewer intermediaries made possible by bringing crypto into music.
2023 - The Year of Crypto Music
Cmpanies and music platforms are growing in popularity as a way for artists to attempt to regain control in an industry that leaves the independent artist out to dry.
Web3 adoption is happening in the crypto music world. Still, the potential to revolutionize the way music is created, distributed, and monetized has yet to fulfill its mandate, but bright minds are working on it.
Here's to 2023!