Web3 in Music: Innovations Reshaping the Music Industry

Web3 in Music: Innovations Reshaping the Music Industry

In 2021, the musician 3LAU earned nearly $12 million in just one day by selling his first NFT album to fans. During the same year, artist Don Diablo sold an NFT of his concert for $1.2 million.

These earnings were unprecedented in the music industry. Let’s provide some context: Musicians typically earn money from royalties, album sales, streaming revenue, and concert tickets. However, all of these sources combined often fall short of reaching even 80% of the revenue generated by 3LAU’s one-day NFT sale in 2021.

This is just one example of how Web3 technology is revolutionizing the music industry. If you’re wondering why many of your favourite musicians are getting into NFTs and crypto, the simple answer is that Web3 is disrupting the sector, opening up previously unimaginable opportunities.

What The Music Industry Looked Like Before Web3

Throughout history, technology has consistently shaped the course of music. Synthesizers introduced synth-pop and dance music in the late ’70s, while electric guitars gave birth to rock ‘n’ roll in the early ’80s. 

In the early 2000s, the rise of digital audio workstations (DAWs) like GarageBand and Logic democratized music production, allowing rap and dance music to go mainstream by making production tools accessible to anyone with a computer.

Music distribution has also evolved from CDs to MP3 players and eventually to streaming. Streaming services like Spotify and Pandora, in particular, ushered in a new era for music artists and listeners. They allowed people to enjoy their favourite music on demand from any era and enabled musicians to earn directly from their creations and receive quick feedback, which they could use to create new music.

However, while Web2 music streaming services transformed the music industry, they also brought along a set of challenges that required innovative solutions. These challenges included their centralized business models, which granted them significant control over creators and their content. 

Also, concerns about data privacy and free speech became prominent issues, drawing media attention in recent years.

Web3 addresses these drawbacks by offering technologies that decentralize platform control and give creators more autonomy than ever before.

How Web3 is Transforming the Music Landscape


Web3 Connects Artists and Fans.

Since the 1950s, the music industry’s business models have stayed largely the same despite the rise of technologies like CDs, MP3s, and streaming. The connection between fans and artists has consistently been one-sided and transactional.

In the 1970s, Neil Young fans purchased “Harvest” from record stores. With the advent of CDs in 1982, people switched from vinyl to digital, but the buying logic stayed the same. Even when MP3s and online music stores came along in the early 2000s, the disconnect between consumers and artists persisted.

Web3 is changing this one-sided model by promoting direct, deeper connections between fans and artists. Blockchain technology allows artists to reach their fans without needing middlemen like music labels and distribution channels. 

This shift has been particularly evident in the dance music and rap scene. 

In 2021, Chicago rapper Chief Keef dropped his 15-track album “4NEM” and added an NFT package to the release. This package offered fans exclusive merchandise, event access, future NFT benefits, and more as part of his DigiGlo project, which blends gaming, music, and NFTs.

In early 2022, Diplo, a prominent figure in deep house music, released his highly anticipated single “Don’t Forget My Love” as an NFT through Royal, a Web3 music startup.


Royal aims to create a future where fans and artists share ownership of music and its financial rewards, empowering artists to stay independent and in control while fans support their careers.

Web3 goes beyond traditional music consumption. It allows fans not only to listen to their favourite artists but also to be part of their creative journeys. Fans can support projects, attend exclusive events, or even co-own music through NFTs. This turns fans into active contributors to an artist’s success rather than passive consumers.

Web3 Introduces Fairer Compensation Models For Fans and Artists.

Source: Medium

One-sided deals aren’t just a problem for music fans; artists have also been caught in unfair payment models, especially in the streaming era.

Complex revenue-sharing arrangements among labels, distributors, writers, and artists have been a big issue in the music industry. Sadly, artists often get the short end of the stick.

While streaming platforms have made it easier for artists to reach new audiences, they’ve also made it significantly harder for artists to get paid fairly. 

In 2021, The New York Times revealed that platforms like Audiomack, Spotify, Apple Music, and Pandora pay artists less than $0.01 per stream. This frustration has even led some lesser-known musicians to give up on their careers.

Blockchain-based decentralized exchanges offer transparent and equitable revenue distribution models. For instance, in 2016, New York-based startup Mediachain aimed to connect creators and audiences using open-source blockchain technology and smart contracts. Spotify recognized their innovation and acquired them in 2017.

Mediachain is not alone in addressing compensation issues. Musicoin, a blockchain-based music streaming platform, allows artists to create and distribute music in a shared economy.


Running on an Ethereum Virtual Machine (EVM), Musicoin pays artists based on actual plays, ensuring fair distribution of streaming revenue. No third parties are involved, so 100% of the revenue goes to the artists.

The Open Music Initiative (OMI) is another solution using Web3 technology to tackle this problem. OMI is a nonprofit open-source protocol established in partnership with MIT Media Lab and industry organizations. It helps creators identify legitimate music rights holders and ensure fair royalty payments. 

Major music companies like Warner Music, YouTube, Netflix, Spotify, Universal Music, Sony, Soundcloud, Red Bull Media House, Pandora, and Alibaba are part of the OMI initiative.

Web3 Enables New Forms of Music Production and Consumption.


There’s a saying that “Technology shapes content,” and music is no exception. While blockchain and decentralized tech are relatively new, they are already influencing music production in unique ways.

In 2021, experimental composer Holly Herndon launched Holly+, a blockchain-based tool that recreates her voice using voice data. The tool allows users to create music using Holly’s unique style. Profits from its sales support the Holly+ DAO, which funds new projects using this replica.


Similarly, Crowd Records created a platform where musicians can use cryptocurrencies to crowdsource song development, creating a creative lab using blockchain technology.


You can also spot Web3’s influence in the hyperpop trend, a futuristic electronic pop genre emphasizing global collaboration, similar to DAOs and NFTs.

In Conclusion

Web3 technology offers the music industry limitless possibilities. Billboard reported that artists made $25 billion in sales in the NFT marketplace in 2021. In addition to granting artists control over their music, Web3 also fosters artist sovereignty and enables direct fan-to-artist engagement. 

However, some worry that integrating Web3 into the music industry may not be good for intermediaries like agents and lawyers, as it could impact their livelihoods.

It’s important to remember that Web3 is still in its early stages. While the music industry does not yet have all the answers, addressing music ownership rights and making them available to all is an important step toward a more innovative future.


Disclaimer: This article is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence. 


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