Exploring the Future of Web3 Music: NFTs, AI, and Decentralized Harmony

I. Introduction

In a chaotic world, music is the sanctuary of the soul. It is an outlet for emotions and a soothing balm for the spirit. In the melodies of music, we find resonance and touch the depths of emotions that cannot be expressed in words. Like a brush of simultaneous light, music adds color to the canvas of life, making ordinary days shine with extraordinary brilliance.

Music is the carrier of emotions, capable of evoking deep emotional resonance within us, whether it be joyful songs or mournful elegies. A simple melody has the power to awaken memories deeply buried in our hearts, conjuring up smiles or tears from days gone by. It is the key to our emotional world, opening doors that lead to the depths of our souls.

Music is the bond of society and culture, transcending language and cultural barriers. It conveys the stories of different cultures and histories in its unique way, fostering understanding and connection between people. Every note carries the essence of culture, and every rhythm reflects the heartbeat of society. In the resonance of music, we not only discover our similarities but also learn to appreciate the wonderful differences.

Music is the solace of the soul, an unwavering companion on life’s journey. It provides comfort in difficult moments and accompanies us in moments of joy. When we feel lonely or lost, music is the beam of light that illuminates the darkness, giving us strength and hope. It is the sanctuary of the soul, allowing us to find moments of tranquility amidst the turbulent waves of life.

Music is the catalyst for creativity, the source of creative thinking. It inspires our imagination and challenges our innovative abilities. Music is not just a canvas for artists; it is also a catalyst for scientists, writers, entrepreneurs, and the inherent creativity of every individual. Inspired by music, we break through the boundaries of thought and explore infinite possibilities.

In this diverse and complex world, music offers a unique perspective that allows us to experience the beauty and richness of life. It is indispensable because music not only touches our ears but also touches our souls.

2.Music Industrial Chain

The music industrial chain is a vast and complex ecosystem. From the spark of inspiration to the birth of a song, from meticulous production in the recording studio to global distribution, each step is crucial in the journey of music. Fundamentally, it is an ecosystem centered around creation, production, distribution, and consumption. In this system, each link is interconnected and interdependent.

Creation and Production:

It all starts with creation. Music creation involves songwriting, composing, arranging, and recording. During this stage, artists and creators are at the core. Then comes the production stage, which includes techniques such as recording, mixing, and mastering. This stage is crucial as it determines the final sound quality and style of the music.

Release and Distribution:

The distribution process brings the music to the market. Traditionally, this mainly referred to physical releases through record companies, such as CDs and vinyl records. However, with the development of digital technology, this process has shifted towards digital streaming services and online music stores.

Business Model Evolution:

In the past, the music industry’s business model relied mainly on record sales and live performances. Artists earned revenue through record companies and also from ticket sales at live shows. However, with the rise of digitalization, streaming services have become dominant, changing the way revenue is generated. Today, artists earn more income from streaming royalties, live performances, and brand collaborations.

Copyright Management:

Copyright management plays a crucial role in the music industry. It not only affects artists’ income but also serves as the foundation for a fair functioning of the entire music ecosystem. In the digital age, although it brings broader distribution channels, it also presents challenges in copyright protection and management.

Market Trend:

According to the IFPI Global Music Industry Report 2023, the global music market reached a size of $26.2 billion in 2023, growing by 9% compared to 2022. The revenue of the music industry in every region of the world has increased, with the recorded music market growing by 9%. The number of paid subscription users has reached an astonishing 589 million people. Currently, the music industry is experiencing rapid changes. On one hand, the rise of independent music breaks the market monopoly of traditional record companies. On the other hand, globalization and the widespread use of the internet have allowed music to transcend geographical boundaries and reach a global audience.

Source: IFPI 2023 Global Music Industry Report

3.Industry Pain Points

The music industry, despite continuing to expand and evolve globally, still faces a series of profound challenges and pain points. These problems not only affect the income and creation of artists, but also affect the healthy development of the entire industry.

Copyright issues and revenue distribution:

Copyright issues have always been one of the core pain points in the music industry. As digital music becomes more popular, copyright management becomes more complex.

For example, the copyright dispute between the famous artist Taylor Swift and her former record label highlights the challenges of how artists protect the copyright of their works in the music industry. Additionally, opaque revenue distribution mechanisms leave many artists feeling like they are not being fairly compensated, especially on streaming platforms.

Market monopoly:

Market monopoly is another important issue. The market dominance of large music labels and streaming platforms limits the space for independent artists to develop. This monopoly affects not only artists’ income and exposure opportunities, but also the diversity of music.

For example, independent artists often struggle to gain adequate exposure on mainstream platforms, which limits their career development and creative freedom.

Artist exposure and marketing:

In the digital age, artists face increasing pressure to market and promote themselves. Artists signed to major companies may gain greater market exposure, but independent artists need to figure out how to stand out in a crowded digital world. This is not only a question of resources but also a question of skills and knowledge.

Challenges brought by digitalization:

While digitization has brought wider reach and convenience to music, it has also brought new challenges. Digital piracy and copyright infringement remain a serious problem. At the same time, the popularity of digital music also means that consumers’ perception of the value of music has changed, which has an impact on music pricing and sales strategies.

Music platforms, as the most important link in the entire music industry chain, are also facing huge challenges.

Complexity of Copyright Management and Revenue Distribution

• From a music platform perspective, copyright management is a huge challenge. There is a need to ensure that all music streamed is legal, while also dealing with the complex distribution of revenue to the relevant rights holders.
• This process is particularly cumbersome and prone to errors for platforms that have a large number of independent musicians’ works.

Market monopoly and artist exposure

• Large music platforms tend to promote established artists and hit songs, making it difficult for emerging artists and independent musicians to gain exposure.
• This market monopoly limits musical diversity and creates barriers to innovation and the growth of emerging artists.

User experience and engagement

• Traditional music platforms usually provide limited user participation methods, focusing mainly on music playback and basic interactive functions, lacking in-depth user participation and community building.

4.How Web3 Resolves Industry Pain Points

Web3 technology, especially blockchain and decentralization, provides new perspectives and tools to address existing issues in the music industry. The essence of Web3 music is to reshape the music value chain by using blockchain technology to transform artists’ works into NFTs and directly hand them to downstream listeners, thereby solving copyright issues and improving revenue distribution. Let’s take a look at the advantages of Web3 music together.。

Make copyright management and revenue mechanisms more transparent.

• Application of blockchain in copyright management:
  Using blockchain technology, a transparent and tamper-proof copyright management system can be created. Every use and distribution of a musical work can be recorded on the blockchain, ensuring that artists’ copyrights are protected and properly compensated.
• The role of smart contracts in income distribution:
  Smart contracts can automate complex revenue distribution agreements. This means that artists and other rights holders can directly obtain income according to preset rules, reducing intermediate links and improving the transparency and efficiency of income.

Breaking market monopolies.

• Decentralized music platform:
  Decentralized music platforms enable independent artists to release their work directly without going through major labels or streaming services. This gives independent artists greater exposure while also giving consumers access to a wider selection of music.

Artists’ marketing and exposure.

• Community-based promotion model:
  On the Web3 platform, artists can leverage the power of the community to promote their music. Through the tokenized incentive mechanism, fans can directly participate in the promotion and distribution of music, forming a decentralized marketing model.

Addressing digital challenges

• NFTs and digital assets:
  By converting musical works or experiences into NFTs, artists can imbue their work with uniqueness and scarcity. Not only could this serve as a new revenue stream, it could also help reshape the value of digital music

5. Target Summary

This chapter provides an overview of existing Web3 music projects in the market.

1. Gala Music

Gala Music is a decentralized music platform built using blockchain technology. It allows music artists to have greater control over their music and increases transparency in the industry. Fans can have closer interaction and connection with music artists.

Gala Music is an important component of the Gala ecosystem, along with Gala Games and Gala Movies. It currently has a market value of only $13 million, with the issuance of $Music tokens.

2. Audius

Audius is currently the Web3 music platform with the largest number of users and the highest market value. It creates an open sharing ecosystem for music. All music can be listened to for free, and it also opens APIs for third-party products to call music. It has rich music resources and low user threshold.

The project released its mainnet and token $AUDIO in October 2020. $AUDIO reached a market value of US$5 billion at the peak of the last bull market, and its current market value is about US$200 million.

3. Pianity

Pianity is a music NFT platform built on Arweave that aims to bring music artists and their community together to create, sell, purchase and collect limited edition songs.

Pianity not only treats music as fine art, but also provides artists with a service to issue music NFTs, giving artists a new independent source of income. Pianity provides music NFT sales services and auction functions for artists and collectors. The current ecological token is identified as $PIA and has not yet been issued.

4. Sound.XYZ

Sound.XYZ is an NFT music exploration and streaming platform on the Ethereum chain, which provides a convenient wallet function and NFT transaction path.

The current project has raised $20 million in Series A funding and has featured artists such as Snoop Dogg, Daniel Allan, San Holo, Alexander23 and Vic Mensa. No tokens are being issued at this time.

5. Royal

Royal is a groundbreaking music market on the Polygon chain. It aims to allow fans and artists to jointly invest in music and earn royalties, achieving shared ownership and mutual growth. It has received a seed round of US$16 million from Coinbase, a16z and other institutions. Series A financing of US$55 million, with artists such as 3LAU, JD Ross, TheChainsmokers, Nas, Kygo and Loqic on board. No tokens are being issued at this time.

6. Exploration of the Development Direction of Web3 Music

The application of Web3 technology in the music industry not only solves existing problems but also brings new development directions to the industry. The following are discussions on several key areas, each accompanied by specific examples to deepen understanding:

1. Combination of AI Music and Web3

Combining AI music creation technology with the decentralized and transparent features of Web3 can create new music experiences and business models. Music works generated using AI can be copyrighted and traded on the Web3 platform. This combination provides new possibilities for personalization and intelligence of music.

2. Combination of MEME Culture and AI Music

AI music technology can be combined with popular MEME culture to create highly attractive and viral music works. This combination can quickly gain popularity among young people and form new music trends. AI can analyze popular online trends and user preferences to generate music works that fit the current cultural background.

3. Combination of DePIN and Music

Using decentralized storage solutions can ensure the security and permanence of music data. By combining it with decentralized computing platforms, the inference and processing of AI music models can be efficiently carried out. This technological combination helps reduce the operational costs of the music industry while improving the efficiency and security of data processing.

4. Combination of Music Creator Economy and Web3

The Web3 platform can provide music creators with more direct revenue channels and greater market control. Through a decentralized marketplace, artists can sell their work directly to listeners without going through traditional music industry intermediaries. This will encourage more independent creations and promote diversity in the music industry.

5. Combination of NFT and Music

NFTs offer a unique way to own and trade music creations. Artists can create limited-edition works or exclusive experiences by issuing NFTs of their musical compositions, providing listeners with unique collectible value. In the future, NFTs may become an important way to create and distribute music, especially for independent artists and experimental music projects.

6. Combination of Fan Economy and Web3

In the Web3 environment, fans can support their favorite musicians by purchasing the artist’s tokens or NFTs. This model not only strengthens the connection between fans and artists but also provides fans with opportunities to participate in music creation and promotion, forming an interactive music ecosystem.

7. Conclusion: The future of the music industry and the integration of Web3

Through an in-depth analysis of the music industry chain and its business model, as well as a discussion of the current industry pain points, we can clearly see that the music world is at an important turning point.

The introduction of Web3 technology not only provides innovative solutions to existing problems, but also heralds a new direction for the future development of the music industry.

• Fusion of Innovation and Tradition
  The core features of Web3 technology, such as decentralization, transparency, data security, and smart contracts, have opened up new paths to address long-standing industry problems such as copyright management complexity and unfair revenue distribution.
  The application of these technologies can not only improve the overall efficiency of the industry but also protect the rights and interests of artists, ensuring that their labor receives fair compensation.
• Building a Fairer Ecosystem
  In the Web3 music ecosystem, artists, creators, and consumers will have greater power and control. This new ecosystem helps break down monopolistic structures in traditional industries, creating a more diverse and equitable environment for artistic creation and sharing.
  Artists will be able to directly connect with their audience, and consumers will have more opportunities to participate directly in the music creation and promotion process.
• Opening up New Business Models
  With the rise of NFTs, AI music, and decentralized platforms, the music industry’s business models will undergo revolutionary changes. These new models will not only increase artists’ sources of income but also provide consumers with unprecedented music experiences and participation opportunities.
  From the collectible value of NFTs to the innovative potential of AI music, Web3 injects new vitality into the music industry.
• Looking to the future
  The future development direction of the music industry is undoubtedly to adapt to the changes of the times, utilize intelligent technology, innovate music products and services, improve music quality and efficiency, protect music copyrights and revenue, meet the diverse needs of music consumers, and achieve the sustainable development of the music industry.

Although Web3 music is still in its early stages of development, its innovative models and solutions to the pain points of the traditional music industry are indispensable for all music companies that want to establish a foothold and continue to develop in the music industry. When all the necessary conditions are in place, the explosive development of the Web3 music track can be foreseen.

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