Music NFT is a powerful tool for transforming an audience into a community

As one of the oldest entertainment industries in existence, the music industry has experienced many technological advancements that have enhanced its widespread use. The digitization of music meant that artists could reach any audience worldwide, and digital distribution gave people unlimited access to music.

With these advances in distribution came some downsides to music monetization. The way musicians make money in a digital format has reduced margins from media or video revenue. Artists have been pushed back to generating revenue from offline endeavors such as concerts and merchandise sales as the online landscape has become filled with middlemen who take a piece of the pie.

“Web3 and existing platforms are helping us build a new chapter in the music industry.” Takayuki Suzuki, CEO of MetaTokyo – Web3 entertainment studio – told Cointelegraph, “It was hard to find good music for me, checking many record stores in Tokyo and sometimes abroad. Now it’s very accessible via streaming.”

A new paradigm of Web3 tools gives creators the ability to develop an existing audience and transform it into a community. Fan relations have become crucial and they have never been closer with artists in Web3.

Marcus Feistl, COO of Limewire, a Music NFT marketplace that was originally a free software peer-to-peer file-sharing music-based platform, told Cointelegraph:

“The music and creative industry is certainly on the verge of a step change, moving from a Web2 model focused on content consumption to a Web3 model focused on content ownership. Artists are just beginning to find their way to the best possible use of Web3 to interact with audiences.”

Among the many use cases for non-fungible tokens (NFTs), the most prevalent has been the ability to form communities around token holders. The emergence of decentralized autonomous organizations experimented with coordinating these communities in a digitally native manner. All of these open up potential opportunities for independent artists willing to innovate in the next iteration of the music space.

Disrupted the music industry once again

The music industry has always been willing to try new things. As Mattias Tengblad, CEO and co-founder of Corite – a blockchain-based crowdfunding music platform – told Cointelegraph: “When music videos came out in the 80s, it was brand new and people weren’t sure what to do. Adoption of these things often starts slowly but eventually becomes mainstream.”

Web3 platforms are in an early stage. The majority of users are crypto literate and have a basic technical understanding of how to interact on the chain. As the space evolves, Web3 music platforms can become a key piece in the way labels and artists do business and market themselves.

The possibilities that this technology provides facilitate connections between like-minded individuals that break past barriers to form a community. “It was difficult to maintain good relationships in the industry,” Suzuki reflected, “I was constantly meeting and reconnecting with forward-thinking people.”

These innovations are not exclusive to the established in the music industry, and young talent native to Web3 can open the gates for new expression and income generation. It encourages the relationship between artists, intermediaries and fans to transition into a community.

Related: Web3 is creating a new genre of NFT-powered music

Music innovation gives those artists who test new technologies the opportunity to become the next established artists of the coming generation. This could potentially reduce the importance of record labels to an artist’s success. Many record companies are getting involved by moving some of their activity up the chain and releasing NFT compilations.

– There will always be a need for record companies, but I think those who fail to adapt to the changing landscape risk being left behind, said Tengblad and added:

“When you have a loyal group of supporters, I think technology opens the door for you to monetize your work directly, while sharing the benefits of your success with your supporters.”

Successful music NFT drops show how Web3 can disrupt the fundraising model by allowing artists to go directly to fans for funding. Those artists who make an effort to engage with the community and build a direct relationship with their fan base will benefit the most from Web3.

From audience to community

An audience is generally understood as a one-way relationship, while a community suggests a two-way communication between the artist and its fans. For a community to be productive, those involved should enrich the creative process by actively listening to each other’s needs and proposing solutions to improve the community as a whole.

As artists move to a more community-driven approach, blockchain and NFTs allow artists to collect money from fans without intermediaries and offer unique benefits and opportunities back to the people who contribute to them. Current platforms remain a crucial tool for community building and music distribution to complement a Web3 strategy.

“Affordable digital recording has led to an explosion of musicians on YouTube reaching out to their community for collaboration, instant feedback, live broadcasts, etc.,” commented Tengblad, “Social media and chat programs like Twitter, Instagram, TikTok, Telegram, and Discord give people who are interested in what you do a chance to engage with more of your content, connect with you and with each other.”

If an artist posts a new video on Youtube, their community can contribute to the artist’s work by providing immediate feedback and suggesting new ideas that can help the artist grow and develop further.

Activities carried out by the community tend to have a greater impact and immediately affect the growth of an artist. With the support of a strong community, artists have a solid foundation on which to build a career.

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The engagement process between the artist and their community must be as simple as possible. Suzuki explained:

“Web3 will give more power to artists and creators, so there will be a need for education. Intermediaries can be supporters or contributors in a community who do not capture information or money.”

This starts with clear communication and by making NFTs more accessible to everyone. Bringing NFTs and the content ownership model closer to fans is what will ultimately drive artist communities, as it creates a much stronger and more exclusive connection between fans and creators.

“For creators, this means an easy-to-use self-onboarding process where they can create their first NFT project in just a few clicks,” Fesitl concluded, “For fans, this means you can either use a full custody service without the need to own a wallet or directly connect to an external wallet, providing the full Web3 experience.”

Artists most prepared to succeed in today’s industry are those willing to use every available tool to build an interactive and engaged community around their work.