Part One: The State of Music and the Web3 Report

The last decade has proven to be extremely eventful in terms of adoption and implementation of blockchain-based technologies around the world. The rise and mass adoption of cryptocurrencies was followed by the formation of a digital collectibles ecosystem, where the benefits of decentralization began to penetrate the creative realms quickly.

at this very moment music industry It is experiencing a period of continuous and ongoing innovation, where diverse communities are built around mutual trust in these revolutionary technologies and a shared belief in a future where an artist, fan and collector gradually merges.

It’s also interesting to note that the music industry lags behind digital art in terms of NFT and digital collection sales, but still significantly ahead in the process of building community around these technologies.

The thing is, we’re currently going through web3 creation process (the new internet) ultimately leads to ideological debates, especially regarding old music business structures. This so-called battle between new innovative approaches and more traditional legacy approaches then results in an unprecedented amount of innovation and ideas, making the music technology industry a very interesting market to follow.

That’s why we wanted to present the first Status Report, whose purpose is to focus on projects, trends and processes occurring in the music3 space, as well as possible future outcomes and considerations.

Stay tuned for Part Two coming next week.

Restructuring of Property Rights

Over the past year, we’ve seen the introduction of an innovative concept to place music royalties on an artist’s song as part of the utility value of a digital collectible product. idea that starts with platforms like Royal is currently at the forefront of building community in the music metaverse world, with various other initiatives and projects focused on connecting monetary relationships between artists and their fan bases.

The fact that many of these NFTs are listed on OpenSea, one of the largest exchanges, further strengthens this point. Although the concept is very innovative and opens the door to new interactions between musicians and listeners, it also creates a number of new problems that have not been encountered before.

These problems exist because, in fact, we are observing a new type of ownership that presents an entirely new set of challenges, particularly in relation to property rights and how this is reflected in the modern contracting framework. Unlike the traditional transfer or assignment of music copyrights, we now have an important distinction between true copyright ownership and true copyright ownership. digital blockchain ownership.

The newly introduced concept of digital property does not fully correspond to the current legal framework regarding intellectual property and copyright laws and as a result there is currently a gray legal area. These developments will certainly have significant implications for the future, for example:

The gradual contracting revolution will inevitably occur. We can already see legal disputes between record companies and large-caliber artists right now, and these disagreements stem from the lack of contractual information surrounding NFTs and digital collections.

Proceeds from an NFT sale can be purchased for master recording rights, songwriting rights, broadcast rights, sync rights, etc. How is it shared between the artist and the record label, given that there are several different divisions that have been pre-agreed upon?

Under which category is this special transfer of rights classified? What if an artist is selling NFTs that give fans royalties from their music? How does this relate to the copyright sharing processes of the traditional label-artist relationship?

As can be seen, with the lack of contracts, digital blockchain ownership becomes an area with a significant amount of potential issues and disputes, and these issues will be gradually addressed in the coming future. This concerns both labels, artists and the platforms themselves, and some legislation in this area seems inevitable going forward.

Unsigned/independent artists advantageous in the short run. As contractual disputes and resolutions will continue in the big label world, smaller artists will have more flexibility and less legal friction to export digital collections, especially when it comes to transferring copyrights.

Often times an indie/niche artist has 100% ownership of their music, making it much easier for them to try out the different benefits available to their fans. As a result, it’s safe to assume that the most unconventional and cutting-edge innovation will continue to be produced by the more underground and niche sectors of the music world; this can already be seen with the formation of artist-fan communities in more niche genre families. .

Training and recruitment This will increase as a result of the restructuring of property rights. The amount of legal complexity for platforms and marketplaces in this space is increasing rapidly every day. Aside from transfers of rights, there is also the current question of whether NFTs should be classified as financial securities after a reasonable period of time has passed.

Although legal experts are divided on this issue, there is a common belief that regulation will come to this market at a certain point. Whether it will happen relatively early in the construction process or after the complexity has increased drastically means something for the platforms in question.

Most important is the fact that marketplaces must focus heavily on informative recruitment and training in order to be able to provide a detailed and informative overview of exactly what they are offering. It is very important to clearly communicate to collectors what copyrights they are potentially receiving and what disadvantages and considerations there are. This indicates that we will see an increase in the educational incentives these platforms offer in the future.

A potential longer-term impact of the contract revolution is metadata standardization. The point of view here is that restructuring and editing will bring a more transparent reality with greater platform interoperability, which will allow the space to have more transparent metadata standards. This will make collaboration and discoverability much easier in the digital collection world. At this very moment, many DAOs are currently pushing for higher metadata standards.

Further Development of Communities

As mentioned earlier, one of the biggest appeals of NFTs, DAOs, and social tokens is the opportunity to connect deeper and more intimate connections between music artists and their audience. The latest survey-based research in this area shows that most DAOs and platforms are heavily focused on the community-building aspect, and ready to lose money in the short run to prioritize the formation of strong communities in the long term.

For example, a DAO structure allows fans to invest directly in their favorite artists or tech projects they believe in, with rewards and incentives implemented by the blockchain. As a result, it leads to the involvement of like-minded people in a horizontal decision-making process, united on a common vision, which in turn leads to the formation of digital communities.

The world of music-related tokens is going through a period of continuous experimentation as more and more artists seek to form long-term connections with their fans. As a result, there are several new types of offers available to collectors every day, and most of these offers are of a financial nature.

We are seeing more and more financial connections being made between artists and fans through NFTs. embedded copyrights or DAO structures This allows fans to be a part of the artist’s work. This leads to a process where artists, collectors, fans and contributors are gradually coming together.

It’s also worth noting that we are currently in the early years of web3 creation and as technology adoption and popularity continues to grow, innovation and experimentation will continue to increase, both in terms of offer types and offer types. digital collection types. The inevitable results of these processes are the further formation and development of closely-knit digital communities in the world of music technology.

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*All investment/financial opinions expressed by NFT Plazas are taken from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to thoroughly research any product before making any investment.

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