Where Music Meets Web3

Hey there! Welcome back to the IGIN newsletter. Thanks to the 10 new IGIN readers that have joined us since our last issue. That puts us at 183 people who can now impress their friends with their knowledge of web3, the creator economy, and the internet.

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Newsletter Update: For those of you who don't know me personally, you may be unaware that I'm actually a college student. This newsletter is my side project. My passion project. And I'm committed to continue on this path of demystifying web3 and creator economy for people. However, with spring semester ramping up soon, I will be switching from a once-a-week to an every-other-week schedule. I'd rather ensure my letters are high-quality than high-quantity.

Thank you so much for your support so far! There's still a ton I have to learn and plenty of topics want to write about, so I hope you stick around. Feel free to reach out to me if you ever want to discuss anything in the space or if you want me to cover a topic. I love talking about this stuff! You can hit respond on any of these emails or tweet at me. Alright, let's get into today's letter✌️

              -Levi

201 plays. That's how many times iTunes say's I've listened to my all-time favorite song. 

I actually knew that song was going to be one of my favorites right from the moment I first heard it. It was good. Damn good. 

That wasn't the only time something like that happened to me. I pick up on music fast. I'm sometimes that obnoxious guy who has to let people know that I was in early on a song or an artist. (I've got proof that I called Billie Eilish getting big all the way back in November 2017...just sayin').

What can I say...I'm a music guy. Music is part of my identity.

I'm not the only one either. I think most people can relate. We all love our music. Unfortunately, no matter how die-hard of a fan you may be for your favorite artists, our interactions with music have always been limited. Pretty much all we do nowadays is listen. With streaming services like Spotify, we don't even have to buy our music anymore.

So where does that leave us? Well, it leaves us unable to truly support the artists we love, and it leaves the artists in even worse shape. Currently they make less than a penny per stream. So after all 201 plays of my favorite song, the artist walked away with a whopping $0.70 total. Hope they didn't spend it all in one place.

But as always with this newsletter, there is a knight in shining armor riding in to save the day. Yep. You guessed it — web3 and the creator economy.

So let's talk about it:

• Music, TikTok, and the Blockchain. Aligning artists and fan incentives.

• Sound_xyz. Community building around music.

• Royal. Getting paid to own music.

• Takeaways. A more creative world.

Music, TikTok, and the Blockchain.

Similar to many other web3 applications, the power of music on the blockchain lies in the alignment of incentives. Before the digital age, radio was the only way to truly expand your reach as an artist. Because of this bottleneck, artists with aspirations of making it big needed the backing of a huge record label who could spread their music.

If they succeeded, consumers bought their music through vinyl records and CD's. However there's always been an understanding that the majority of the profit goes directly to the record label.

All of these incentives favored the record labels. They were the ones reaping the rewards  from both the creative output of artists and the spending of consumers. In essence, they were the middlemen blocking that direct connection from artist to listener. That was simply the reality of things...

Social media.

Then came along social media — and with it, an entirely new avenue for artists to connect with their fans. Moreover, it created an entirely new avenue for small artists to build up a fanbase. It took a few years for this influence to truly take hold, but with the recent explosion of TikTok, social media has entirely changed what it means to make it as a musician in today's world.

The TikTok ecosystem is based on the "For You Page", an endless feed of content created by the app's algorithm for its users. The platform's key innovation lies in the dynamic it has created in which users are expecting to see content from new creators every time they check the app. Users are less constrained to the bubble of their social network compared to other platforms like Instagram.

It's the ideal place for a musical artist to make a name for themselves...and many have.

For artists who know how to leverage the platform's tools, some have been able to accelerate their music career faster than ever before. For example, an artist named Tai Verdes went from posting TikToks of himself working at a Verizon store to over 7.8 million monthly listeners on Spotify in less than two years. (His song Stuck in the Middle went viral on TikTok which started his meteoric rise. It's a great song. Give it a listen.)

With record labels and radio no longer being the premier path to stardom, social media is taking over as the place to build a fanbase (and with no middleman necessary). That leaves the next question — after a fanbase is established, is there a better way to strengthen the connection between them and the artist?

Music NFT's

You very well might have heard the buzz over NFT's over the past year, but before we dive into how music is related, let's first make sure we all understand what an NFT actually is. 

An NFT is a non-fungible token.

If something is non-fungible, that simply means that it is not interchangeable. Here's an analogy to help clear up this topic. If you buy tickets to a concert and all the seating is general admission, your tickets are fungible. You could swap your ticket with anyone and you would be left with something that is indistinguishable. However, if you bought tickets to a concert in which you reserved seats, a ticket swap would give you a distinguishably different seat — hence, they are non-fungible.

Now apply this idea to the blockchain. If I had a Bitcoin token, I could swap it with any other Bitcoin token, and the result would be indistinguishable to me... so Bitcoin is fungible.

But if I buy an NFT on the blockchain, I essentially am purchasing a unique token that cannot be interchanged with any others. If I sell one NFT and buy another, the blockchain has verifiable proof that I have a different NFT in my possession. That's all an NFT is at its most rudimentary level.

But what can an NFT actually be? As it turns out, it can be a bunch of different things — a video, an animation, a digital art piece, an audio file — just about anything digital could be turned into an NFT. In addition, some might provide access to certain perks, allow you to join communities, or provide utility in other ways. The opportunities are endless, and we have just barely scratched the surface.

The NFT space deserves many dedicated writeups itself to even begin to explore it all... but I'm not quite there yet myself. I'm still trying to decipher and understand this particular corner of web3, so I won't be writing about this too much until it makes a bit more sense to me. However, out of all of the project types I've looked into, music NFT's are one that does make total sense. Let's dive in.

Sound.xyz

The Sound.xyz platform is becoming one of the premier places to strengthen the relationship between fans and artists through NFT's. 

Sound provides a way for fans to support an artist directly through purchasing a song as an NFT. By purchasing these, not only can fans actually fund the creation of music they love, they also can "stake their claim on being there before everyone else". For a music guy like myself, this sounds like the perfect way to prove to the world that my music taste is the best. That type of satisfaction is gonna be hard to pass up on for many music-minded people.

Additionally, when you hold a Sound NFT, you can make a public comment on the song (which will disappear if you sell it). So whenever you own it, you become one of the top supporters in an artists community. Your opinion on the music are now spontaneously highly visible to both the artist and other fans.

Owning a Sound NFT also provides you access to a Discord community, a place where artists and fans can interact, collaborate, and more. This may seem like a trivial perk, but the more you interact with web3 and the creator economy, the more it is apparent that community is the key to success in the today's internet.

Lastly, in terms of artistic creation, this ecosystem is finally providing a way for artists to make a living off of what they're best at — creating music. Up until now, artists needed to sell merch and tour to make a living. The money made through streaming/selling music rarely is enough. That's a tough outlook for many artists, especially those that are trying to make that initial climb out of obscurity. This might finally be paving the way for artists to get paid for their actual creative output.

Royal.

The Royal platform gives artists another model to get paid for their music — selling an NFT that gives the owner access to income from royalties. So now you could buy a song as an NFT and get paid to own it. You know what that means? Dare I say it... its a productive asset (my favorite type of web3 asset).

So Royal essentially allows fans, along with their favorite artists, to capture the value generated by a piece of music.

This is a beautifully constructed pairing of incentives. Artists can finally earn large fan-supported payouts when they release new music through selling their NFT's. For fans, not only can they directly own songs from their favorite artists, they can also earn money from this ownership.

Not only does this model strengthen the community inward (between artists and current fans), but it also strengthens the community growth outward (growing an artist's fanbase). If fans are financially incentivized to assist in growing the popularity of an artist they love, it becomes way more likely for a new, or even an established, artist to see their audience grow because of the NFT royalty-sharing system.

Imagine if I had had the opportunity to buy a Billie Eilish song back in 2017... or if you could've bought a Led Zeppelin song from their first album back in 1969... we would be swimming in royalties.

Royal's first ever music drop is releasing tomorrow (1/11/22) with 3 different NFT levels, which will give NFT owners access to a combined 50% share of all royalties these songs produce amongst other perks. You can even purchase these with credit cards, for those less familiar with cryptocurrencies and wallets.

Takeaways.

Every artist starts somewhere, and usually that's somewhere small. That's a tough place to start for an artist, and finding that initial traction of fans is difficult.

With these new music NFT models, there is now a financial and social upside (outside of your own personal ego-boost) to finding and supporting an artist from their early days up to their wide-spread success.

Even putting financial incentives aside, this is an exciting proposition simply because it will give many smaller artists a chance to grow. There have probably been countless amazing artists that never had the chance to make it big because the old system had misaligned incentives. I don't think we'll miss out on as many of these people in the future.

We are truly moving towards a more creative world. A world in which creators can build communities, and also one in which they can make a living doing it too.

I'm excited to see this explosion of creatives over the next few years. Especially the explosion of new music. My playlist is in dire need of a few fresh songs right now...

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-Levi