We’re back talking about music NFTs this week. If you didn’t read Part 1, or did but inadvertently purged my lukewarm takes between then and now, the one sentence summary is “music NFTs represent a layer of scarcity on top of an abundant product with a fixed unit price.”
I think selling NFTs make sense as part of the overall solution but by themselves, not a long-term viable solution for most artists. Selling an album or collection for 25 ETH is not enough to live on, which forces the artist to create more and more new and original work, which is hard to do. Streaming is a source of subscription and ongoing revenue, and could work well if the model was flipped where most of the revenue goes to them and not a Spotify/Apple. I am wondering if a web3 solution exists that can do this and if the economics/tokenomics would work. Digital products like music do not require logistics and distribution infrastructure like an IRL product. The only big cost is marketing to capture awareness, but if an artist already has a customer-base, then that cost is greatly diminished. Customer retention costs are like 7x less than acquisition costs, on average. Thus, what if a web3 model exists where 80% of the revenue goes to the artist (remaining costs are to the app to stream the music, nodes to manage transactions and music storage, etc)?
I think selling NFTs make sense as part of the overall solution but by themselves, not a long-term viable solution for most artists. Selling an album or collection for 25 ETH is not enough to live on, which forces the artist to create more and more new and original work, which is hard to do. Streaming is a source of subscription and ongoing revenue, and could work well if the model was flipped where most of the revenue goes to them and not a Spotify/Apple. I am wondering if a web3 solution exists that can do this and if the economics/tokenomics would work. Digital products like music do not require logistics and distribution infrastructure like an IRL product. The only big cost is marketing to capture awareness, but if an artist already has a customer-base, then that cost is greatly diminished. Customer retention costs are like 7x less than acquisition costs, on average. Thus, what if a web3 model exists where 80% of the revenue goes to the artist (remaining costs are to the app to stream the music, nodes to manage transactions and music storage, etc)?