Part One: State of Things in Music and Web3 Report

The music industry is seeing a profound shift in the next few years as blockchain technology disrupts every aspect of it. The first wave has been digital distribution, which will change how we consume and listen to our favorite songs. The second wave is quite possibly decentralized production- where artists have control over their own content from beginning to end. As for Web3: It’s still early but here’s what you need to know about its current state.,

“Nft for music” is a decentralized application that allows users to trade their digital assets on the blockchain. It also provides an easy way to manage your favorite artists and songs. Read more in detail here: nft for music.

In terms of the acceptance and deployment of blockchain-based technology throughout the globe, the previous decade has been incredibly active. The advent and widespread use of cryptocurrencies has resulted in the emergence of a digital collectibles ecosystem, in which the advantages of decentralization have quickly spread into the creative sectors.

The music business is now through a time of constant and continuing innovation, with numerous communities forming around mutual faith in these revolutionary technologies and a shared conviction in a future in which an artist, fan, and collector are gradually merging into one.

It’s also worth noting that, although the music business lags behind digital art in terms of NFT and digital collectibles sales volume, it’s well ahead in the process of community development around the technologies in issue.

The problem is that we are presently constructing web3 (the new internet), which inevitably leads to ideological conflicts, particularly about legacy music industry systems. This so-called competition between new inventive ways and more conventional legacy approaches has resulted in an unparalleled quantity of invention and ideas, making the music technology sector a fascinating market to monitor.

As a result, we’d like to propose the first-ever State of Things Report, which will concentrate on current initiatives, trends, and processes in the music3 area, as well as possible future repercussions and concerns.

Keep an eye out for Part Two, which will be released next week.

Property Rights Restructuring

Earlier this year, an innovative notion was introduced to include the opportunity to earn music royalties from an artist’s song as part of the utilitarian value of a digital collectable. With several other firms and initiatives concentrating on integrating monetary ties between artists and their fan bases, the notion that originated with platforms like Royal is now undoubtedly at the forefront of community development within the music metaverse sector.

The fact that several of these NFTs are listed on one of the largest exchanges, OpenSea, further adds to the argument. Despite the fact that the idea is incredibly original and offers up new opportunities for artists and listeners to communicate, it also introduces a new set of issues that have never been experienced before.

These issues exist because we are seeing a new sort of ownership that entails a whole new set of obstacles, particularly in terms of property rights and how they are reflected within the context of contemporary contractualisation. We now have a significant contrast between genuine copyright ownership and digital blockchain ownership, as opposed to a typical transfer or distribution of music royalties rights.

As a consequence, there is now a gray legal area since the newly established idea of digital ownership does not entirely correlate to an existing legal framework surrounding intellectual property and copyright laws. These advancements will very certainly have far-reaching consequences in the future, such as:

Contractualization will undoubtedly undergo a gradual transition. We can already see legal battles brewing between record companies and major artists, and these battles are sparked by a lack of contractual clarity regarding NFTs and digital collectibles.

Given the variety of pre-agreed splits on master recording rights, songwriting rights, publishing rights, synchronization rights, and so on, how does money from the sale of an NFT be divided between the artist and the label?

Which of the following categories would this specific transfer of rights fall under? What if a musician also sells non-transferable tokens (NFTs) that provide fans the right to royalties from their music? What would it mean in terms of the usual label-artist relationship’s copyright sharing processes?

As can be observed, the absence of contractualisation causes a slew of potential challenges and disagreements in the digital blockchain ownership space, which will be gradually resolved in the following years. This applies to record labels, artists, and the platforms themselves, and some type of regulation in this area seems to be unavoidable in the future.

In the near run, unsigned/independent musicians have an edge. Smaller artists would have greater freedom and less legal friction to release digital collectibles while the contractual fights and settlements inside the large record label industry continued, particularly if the transfer of royalty rights was in doubt.

Because most independent/niche artists are entitled to 100 percent ownership of their music, it is much simpler for them to experiment with various utility values supplied to listeners. As a consequence, it’s reasonable to expect that the most unconventional and innovative invention will continue to come from the underground and niche sections of the music industry, as seen by the emergence of artist-fan communities in niche genre families.

As a consequence of the property rights rearrangement, education and onboarding will become more important. The degree of legal complexity for platforms and marketplaces in this industry is continuously expanding on a daily basis. Aside from the rights transfers, there is also the issue of whether NFTs will be categorized as financial instruments when a fair period of time has passed.

Despite the fact that legal experts are split on the subject, there is little doubt that regulation will come to this market at some time. It signifies certain things for the platforms in issue, whether it happens early in the development process or just after the complexity has skyrocketed.

The most significant is that marketplaces must put a strong emphasis on informed onboarding and education in order to provide a comprehensive and informative overview of what they have to offer. It is critical to clarify to collectors precisely what sort of royalty rights they may get, as well as any possible downsides or concerns. This means that educational inductions supplied by these platforms will become more common in the future.

Metadata standardization is a longer-term possible result of the contractual revolution. The argument here is that reorganization and regulation will result in a more transparent reality with more platform compatibility, allowing for more transparent metadata standards to be implemented. As a result, cooperation and discoverability in the digital collectibles market will be much simpler. Many DAOs are advocating for more stringent metadata requirements at the present.

Community Growth and Development

One of the most appealing aspects of NFTs, DAOs, and social tokens, as previously discussed, is the ability to create deeper and more personal ties between musicians and their listeners. The majority of DAOs and platforms, according to the most recent survey-based research in this subject, are significantly concentrating on the community building component, and are willing to lose money in the near term in order to prioritize the construction of strong communities in the long run.

A DAO framework, for example, lets fans to invest directly in their favorite artists or tech projects they believe in, with the blockchain enforcing rewards and incentives. As a result, it leads to a scenario in which like-minded individuals who share a same vision participate in a horizontal decision-making process, resulting in the establishment of digital communities.

As more and more musicians aim to establish long-term links with their followers, the field of music-related tokens is through a time of continual continuing innovation. As a consequence, every day, a range of different sorts of offers are made available to collectors, with the majority of them being pecuniary in nature.

We’re witnessing a growing number of financial linkages between artists and fans, such as NFTs with integrated royalty rights or DAO frameworks that let supporters to participate in the artist’s company. As a result, artists, collectors, admirers, and donors are gradually merging into a single entity.

It should also be noted that we are still in the early stages of the web3 development process, and as the technology’s acceptance and popularity grows, so will innovation and experimentation – both in terms of sorts of goods and forms of digital collectibles. The emergence and growth of closely-knit digital communities in the music tech industry is an unavoidable byproduct of these dynamics.

 

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