Could losses at giants like Twitter and Facebook mean gains for web3? We’ve got you covered on the latest in music + web3 – just stick to The Beat

Welcome to The Beat, Decential’s bi-monthly breakdown of the music-web3 byway. 

Like most things in web3, the music space moves at breakneck speeds, issuing regular bouts of hope, cringe and FOMO. Those qualities combined blur the essence of the movement – on the one hand creating enduring solutions to legacy industry problems and then on the other the always important question of who is building them. Let’s focus on the essence; the rest, as Alex Ross wrote, is noise.

FTX 😞

Though what happened to FTX – from third-largest crypto exchange to bankruptcy – will sow greater doubt in the minds of the mainstream, there have been a few silver linings. On Royal, an on-chain marketplace where fans can invest in artists’ royalties, artists have paid out more than $100,000 to collectors, in a promising sign that a mutualist approach where fans share artists’ risks and rewards can work. Sound.xyz, the music NFT marketplace, crossed the $5 million mark in volume on secondary markets and notched 5,000 unique collectors. 

While these are positive developments, let’s not forget music is a $40 billion industry with consumers spread the world over (yeah, still less than Musk paid for Twitter), We have a long way to go before declaring a sea change. There are still questions about whether music NFTs should even include music.

web2.5

The experiment-first quality of the ecosystem right now is exciting, as is the steady traction of web3 music, but we should be thinking about how we can bridge the gap between the 5,000 people collecting music NFTs and the billion people who aren’t.

Both Kids of the Apocalypse and Showtime are experimenting with pre-save non-fungible token (NFT) mechanics. That’s where fans are incentivized to show interest in tracks on Spotify that have yet to be released in order to collect NFTs. Spotify pre-saves are a huge driver of playlisting support, and playlists are integral for artist revenue. Connecting web2 platforms with web3 mechanics could go a long way toward greater adoption.

There are dozens of organizations working on innovations for the space, but we needed them yesterday. When major artists like Animal Collective and Lil Simz are citing financial concerns and canceling tours, what hope do the 99 percent have? We need structural change.

What actually is web3?

More than anything, we need to support the web3 ethos, which is enabling a world where software serves our online relationships instead of owning them. Buzzy crypto rhetoric tends to obfuscate that central vision. Some organizations are learning to elide terms like NFTs out of market response, thereby catering to a wider audience, but keep your eyes closest on the web3 platforms that never used them in the first place. They’re the ones that understand that “musicians make music, they don’t make NFTs.”

Big tech has gone haywire

Meta just laid off 11,000 people to focus on the “long-term vision for the metaverse.” Elsewhere, Elon Musk is wreaking havoc on Twitter after buying it to “help humanity.” So far he’s fired the entire moderation team and introduced his controversial Twitter Blue feature, leading to an uptick in hate speech and occasionally hilarious but mostly problematic impersonations – on display in Questlove’s carousel of verified dead people and parody accounts. Twitter is essential to both the music and web3 communities and there are profound implications. Could a decentralized alternative like Mastodon or Farcaster fill the gap?

In less dystopian news, Musk is also toying with revenue sharing for content creators, potentially making the platform a viable monetization tool for musicians. How Twitter will actually verify the content creators to send them money is another question. The social media platform has long had a fraught relationship with the music industry for turning a blind eye to copyright infringement – and Musk has a long history of bloated promise-making. Remember the Tidal/Square/Twitter triptych that once harkened to corner the music and web3 market? Onwards.

Meanwhile, the big three labels are vying for a share of TikTok’s ad revenue – all while TikTok is slashing its own revenue projections for the year by a cool $2 billion. Could these losses mean gains for web3?

Coda

RIP to many including Gal Costa — the Brazilian legend and tropicália queen — and Keith Levene, co-founder of the Clash and trailblazing guitarist for Public Image Ltd. Check them out below.

See you next time. Go see some live music.