The state of music NFTs

Transcript

GM GM welcome to another episode of web3 Academy is the weekly doer Spotlight this is a place where entrepreneurs creators and business professionals can learn how to use web3 to build thriving communities and sustainable business models I'm Jaybird and as always I'm here with my co-host Kyle reidhead what's up Kai what's going on friends today we had you know what I'm surprised it took us this long to do this but we had a conversation finally about music entities and they are popping off right now they are having a moment and we had Austin hurwitz come on because he's been just talking a bunch of great stuff about music nfts on his podcast on his newsletter on Twitter and we're so

excited to have them on and honestly I feel like coming out of this episode I learned so much not even about web3 I mean I did learn a lot about web3 but just about the music industry in general we went through what was going on previously streaming and how artists were getting screwed there then how streaming started to impact the business model of a musician and then what's currently going on in the web 3 space with music nfts and we sort of just speculated on how we think that this new technology is going to change the way that musicians get funding musicians have experiences with their audience how they're going to get distribution and how we're going to discover music and just man just so much stuff it was so insightful I I really really enjoyed this one yeah awesome and just brings such a great perspective having spent

over a decade in the music industry worked at Amazon music he's been part of Venice music which is an independent music label that was created by Troy Carter who is one of the leaders really in the music space he's the one who built up John Legend and Lady Gaga so Austin's just got that in-depth knowledge and he's kind of right on the precipice of he joined the music industry before web3 sort of right at the beginning of the streaming age so he's able to tell us like pre-streaming what was it like okay did streaming solve the problem of actually putting more money into artists pocket I love his views on streaming about how it actually didn't solve that problem but it also created this all-you-can-eat

buffet for us listeners where we don't necessarily have the same attachment to our music as we used to we just get anything we want at all times and is that a good thing it is about a bit of a debate about that his experience is just so vast and his knowledge is so incredible and I love also at the end of the episode how we really started to zoom out and look more long-term and talk about what's the playbook for artists here and how do artists really benefit from both web3 and streaming it's not that web3 is going to replace streaming streaming is still going to be a thing we're still probably going to have ten dollars a month as a listener but then what are the opportunities for artists to use web3 and use nfts yeah

super cool we dropped a little bit of that Alpha about some upcoming projects he's excited about as well it was this is just a yeah rocket jam-packed episode loved it rocket I love that well before we get into the episode let's take a quick second to hear from our sponsors don't trust verify that's the unlock of blockchain Technology the ability to store information in an open transparent and permissionless manner that information may be in the form of money value Access Data content and so much more regardless this Innovation is going to change the way that we use the internet and the way business and economies function forever how valuable would it be to you if you were ahead of one of the most influential technological innovations of our

lifetime staying on the Forefront of web3 will teach you where and what to build if you're an entrepreneur where to focus your time and energy as a Creator or business professional trying to stay ahead of the curve or where to put your money if you're an investor that's exactly what web3 Academy Pro is doing for people just like you I'm putting all my time and energy into these weekly reports combining on-chain analysis and Industry insights to uncover what business models and technologies will win or are winning in web 3. rather than discuss and speculate on what's happening in the space myself and the pro team are verifying through analyzing what's happening on chain giving you the realest analysis in web3 we're sending Pro members weekly on-chain reports

directly to your inbox we've opened a private Discord Channel exclusively for pro members to ask questions and finally we're also running monthly live q and A's exclusively for pro members signing up is simple head to W3 academy.io Pro today log in with your email you use to subscribe to web3 Academy and sign up today if you are ready to level up in web 3 then it's time to go pro the number one resource to learn how to build and invest in web 3. for all you Pro members out there listening thanks for support and I look forward to continuing to go deeper down this rabbit hole and learning with all of you and remember when in doubt look on chain unlock protocol is the nft membership

protocol for web 3. content subscriptions Community Access event tickets are all forms of memberships one of the most common business models for creators and entrepreneurs today building an nft membership opens many new possibilities for your members everything from tailored multi-platform experiences to the ability to sell an unfinished subscription on secondary markets these are things just not possible in web 2. however in order for this business model to work creators need nfts which are time-bound or have built-in recurring payments unlock protocol does this for your nfts better yet with a few simple steps you can

create your own nft contract without code what WordPress has done for websites unlock protocol is doing for membership nfts if you're an nft Creator you can't rely on on royalties as they are likely going to zero you need recurring Revenue you need unlocked at web3 Academy We Believe nft memberships are the future of business and community and that's why we decided to build an unlock learn more at unlock Dash protocol.com Austin's so stoked to have you on the show how you doing my man great to have you here I'm doing well it's an honor and privilege to be here thank you so

much for having me thanks that's so nice I love when people say this is honors all ours okay well let's start we're going to dive deep into music and web 3 in the intersection and where this is going but I think at the beginning everyone needs context and music industry is a bit of a black box to most people because it's sort of controlled by three major companies and unless you work in music as a big fan of music but I don't think most of us understand the business model currently what it's like for a typical musician so can you just sort of give us that context of before web3 what is the business model today for most musicians yeah let's take it

back and in terms of the lens of an artist so if you're an artist before the Advent of streaming so you needed the ability to get into like physical stores you needed vinyl pressings record tapes the only way that you would get access to that distribution and that of radio is through working with the middleman the middleman would be a record label and so you needed to go to these people in order to get access to that distribution it's opened up significantly as streaming has evolved and so instead of having to go directly to a record label you can go what to is now deemed a distributor and you're able to use what's called like tunecore or CD baby

and it's really just a SAS product distribution software to get your music out into the world traditionally the record label for taking on all the risk of bringing you onto their label promoting you marketing you putting you on radio all of that was a pretty significant upfront cost and so what they would do is own your music what is called owning you've probably heard of the term owning your Masters what a master is is a master recording of the actual work so the song is split up into a master recording and then the publishing which will leave to the side for now but on that essentially that means that the label gets to decide what to do when to

do with your music so when to release it how to release it they have all the saying in return you're getting access to distribution and a small royalty percentage traditional music deals on the major side are usually like an 80 20 split the 80 20 is in favor of the label and then keep in mind that anything that they paid out to promote you to Market you anything related to the record releasing all that needs to get paid back to them first before you get a royalty so that's what's called recruitment so take an example if they spent two hundred thousand dollars on promoting your release instead of it

being like a joint venture where okay like they put in some I put in some and it would get a REV share you don't see a dollar until that two hundred thousand dollars has been recouped to the label and then you get your easily 20 so that's kind of been the state of play on the major label side even into the streaming era it's getting a little bit more fair in terms of deal terms but that's kind of where we stand and so as an independent artist it's really challenging to make a living if you don't want to go that route and you're looking for more fair terms you're taking on a lot of that responsibility you're taking on a lot of that up for a cost it's been a challenge

really to build out a career and we can dive more into what streaming looks like it's really hard to make a living just on streamy alone this sounds crazy to me as an entrepreneur I'm like why the heck would I ever give away 80 of my Revenue what allowed the record labels to create these deals and to have the power and leverage yeah they because they have access to information and people if you compared it to your point of a startup right startup goes and raises Capital what they'll typically do is they'll take a bunch of capital in for a percent of their company it's usually a minority stake in the company and then they determine how they're going to pay out later whether that's an exit or their Distributing income or whatever that's

what we Define in the 21st century as Fair nothing about the music industry is historically it's very much been one-sided by a bunch of labels that had all the power because look at the end of the day particularly before the Advent of streaming it's like okay if you don't want to play ball good luck like how are you getting your music on the radio how are you getting your music into record stores you're not the only game in town was the label and so there was no need to negotiate they had all the leverage that's starting to change but we're still trying to fight decades and decades and Decades of a predatory relationship between record labels and artists and I'm not saying

all record labels are bad by any means but that is definitely the state of play does this remain such an issue even when the artist becomes very big we were talking about before this Jay you were saying to have Swift is making this public and fighting about this they still taking 80 of these big big artists or do they artists get some leverage at some point yeah they definitely get some leverage at some point and they're able to renegotiate and make more fair terms but even to the point of Taylor Swift for the audience who may not be familiar because she did not own her music and that is still standard fare on the major label landscape when her catalog was sold to Scooter Braun she had no recourse now this man is going to take

the Lion's Share of royalties on my back catalog and there's nothing that I can do about it so even if she were to negotiate now that she's big and she wants to negotiate her next contract that does nothing to the master agreements that she's already signed away for her back catalog interesting and so when you sign these deals is it typical cool design is it like one album at a time for like forever like yeah yeah all my music really really good point so it's it's really unfortunate because a lot of artists will see a record deal put in front of them and it's you know million dollar advance it's the most money that they've ever seen in their

life and then they see that oh they're signing like Five albums and what it really is one album with an option to renew each album subsequently the option is held by the record label so they can decide if they think that the album is going to be commercially viable or not and then put it out that can put an artist in a complete holding pattern for their entire career because you could put out one album the entire record label is behind you you go to do the follow-up or the third album or the fourth album and you're not hot or you're not a priority for them anymore they've moved in a different direction and they just shelve you and they're you're in contract there's nothing that you could do so you could literally be stuck on a record label

that doesn't want to support you anymore because you signed this multi-album deal and then on the advanced side that also has to be recouped that's not money that they're giving you it's a loan and so before you make peace yeah you can see the multiple links before you get paid anything after that they have to make their money back of that Advance Plus everything else that they put into it and then you can get your minority stake damn part of me is like God these guys are geniuses model but that's also the complete like profit driven part of me the good human to me is this is that okay so

then enter which was in my view in the Public's view I was like great here comes streaming it's going to solve all these problems take us through what happened with streaming did it solve these problems did it not yeah so I think streaming did a lot of good it's not a Panacea it's not solving all the problems but what it did do was dramatically increase access to distribution which is what we talked about earlier so you don't need a record label to get your music up onto Spotify and you can use these Distributors that are just software you pay like a district a certain amount a year and you're able to distribute as much music as you want and that's great at least you're getting your music out there now there's a few problems with that

one it's become noisier than ever I think it was Apple just announced that they have 100 million songs on Apple music when I worked at Amazon we were at 40 million and that was six years ago so it's like growing drastically and it becomes really really hard to stand out it's an impossible game really to try to win in streaming and two is the payouts are just not enough to make a living wage so with streaming what we got as consumers was the best honestly the best music product of all time right we have an all-you-can-eat buffet of Music at our fingertips it's perfect for the

artist it's one of the worst things of all time because you've completely put a cap on the value of their music it's 9.99 they're getting a pro rat a share of that which the payouts you'll hear a lot of numbers thrown out the effective per play rate which which is not what they're actually paid but if you were to take all the royalties that they got divided by their players with their effective per play rate is fractions of a penny it's like 0.00 for a per play so it's very very small you have to make tens of millions of plays if not hundreds of millions to see any sort of sizable income from streaming and so it more or less has completely commoditized the distribution of music and its forced artists to look for additional revenue

streams outside of their music that's what I was going to ask is this the models changing is that all it is like now it's just it's not about earning Revenue necessarily from the music per se but it's about I don't know events and other things that they do and just the way that you can build a business or generate revenue streams just from being a person a lot of people know about and listen to and hear right is there at least a lot of opportunity there or what are you seeing now yeah a lot of opportunity is subjective right but if you think of where the line main share of Revenue is coming from an artist it's not on the recorded music side it's not on the actual distribution of music it's on the merchandise and touring and brand Partnerships so yeah as an artist your

goal often in this traditional streaming landscape is get as many eyeballs on me it's essentially your top of funnel so between streaming and Tick Tock and reels and everything get that type of funnel as big as possible so that you can convert people Downstream to things that they're willing to pay for so that would be Merchant and touring and everything but not every artist can tour and touring has gotten even more expensive post pandemic where I don't think a lot of people realize particularly as an independent artist how expensive it actually is to go on tour like all the equipment all the individual people that you need to hire the minimums that you're expected to hit at each venue particularly when you're

starting out and you're just trying to they'll find enough people in each City it's not really a viable option for a lot of artists you mentioned Independent Artists what percentage of artists as a whole are independent versus are owned by the major labels it's interesting in terms of the revenue the majors own roughly like 80 percent it might be a little less now of recorded music Revenue so I mean they're they're Behemoth it's going down every year on the number of individuals I believe it was Spotify quoted there were like six million artists on their service and a Lion's Share of that are Independent

Artists so it's inverted all the money is going to the majors with less significantly less artists and it's rapidly growing the independent space I just could ask the other problem here that I keep hearing about before we get into web 3 and solutions here of how we can solve this is everyone always says that Spotify is not profitable that is also true can you just touch on that label's got a really good deal here of course say that Spotify and Amazon and all of them Apple don't pay out it's actually not true they pay out a majority of the revenue that they get in they've subsequently since launching negotiated down but they're still well

over 50 percent of the revenue that they're getting in they're sending out probably closer to like 65 70 right now when you add in publishing as well the challenge for all of them is their operating expenditures their marketing budgets they put in a lot to operate these businesses Spotify operates out of one World Trade they have like multiple floors of a ton a ton of employees yeah it's not a profit driven business yet I think they'll get to profitability but it is a slow grind there now you look at their competitors Google Apple Amazon they don't need it to be a profit Center they can use it to push other things whether it's Amazon and Prime it's apple

and like their entire Services plan so not just getting an apple music but getting apple one and TV and everything that they can combine together they're all focused on the lifetime value of the customer throughout the entire ecosystem in a way that quite frankly like Spotify can't do yet just to clarify that so Spotify and then they're still paying out the money but most of it is going to the labels is that what you're saying yeah yeah exactly so if you go back to the beginning of the conversation right the majors take 80 percent on top of having to recoup everything and so call it they're getting 60 then they're taking whatever they're taking in if there's anything recruitment it goes there first whatever is left 1380 of that then 20 so it's not an effective

twenty percent is going to the artist it's much much lower there's a stat I saw a blob post a couple of years ago I believe that it's something like artists get 12 cents on every dollar that's earned in recorded music so it's really really small it's a really bad disparity Jesus I wonder if I don't know if these stats off top of my head but I wonder what would be the comparison to an athlete or I'm trying to think of a similar comparison of somebody who has a solo skill that they're able to monetize 12 cents on the dollar has got to be the lowest one out there athletes would be yeah I can't imagine yeah because you compare like an athlete right they're paying their agent and maybe like a

manager or something like that but they're still they should be taking over a line show or compared to content creators right like YouTube pays out I believe it's like 60 40 and that changes depending on what the platform is but yeah by and large in the creative space I don't know of a field of creatives that have gotten the worst end of the stick than them and and meanwhile music is probably the one that we all connect with the most and love the most no it's the art that we all I use every day I think everybody in the world matter where you are probably connects with music every day I mean if you're if you write a newsletter you just pay 10 to

sub stack the rest is all you right that's how easy it is as a content creator versus a musician it's terrible it's a broken model in a lot of respects and so I think that is the promise of a lot of the things that are developing today in finding new ways of valuing Art and finding new ways of valuing music because the current system is not set up for a majority of artists to succeed and be able to make a living off of their art completely agree okay as a fellow podcaster you're just queuing up my questions that's wonderful before we talk about the what sure let's talk about the why why do you see web3 as a way to solve these problems for musicians

it is and it isn't it's not a cure-all it's not a silver bullet but it does have a lot of properties that give artists more creative control and more Independence in their careers and so it's something that I instantly gravitated towards I can kind of give a little bit of background into how I I found my way into web 3 music and that'll hopefully give some definition as to why I think it matters so it was about a year ago during covid this was like the height of nft media with like Top Shot and everything going on I remember pigeons and planes which is like one of the big like blog boy era Publications I used to come home from

high school and go and read that and two dope boys and complex and everything they had put together a cover story on this rapper spotty Wi-Fi who had created an entire brand around his crypto Punk and remember thinking huh that's interesting I haven't seen before and I sent it to the co-founders of Venice music Troy Carter and Susie Roo send it over this is at the same time that like Blau and verite and RAC are all starting to get into music nfts and selling for like really astronomical numbers like numbers that don't make sense if you're just like looking at traditional streaming or like how a CD was valued or

just distribution formats throughout time you have people like selling for tens of thousands of dollars for a digital asset what is going on here and so I sent all that over to them and said hey I'm not quite sure what's going on I think we have a role to play and we should spend time in this space and so I was leading product at Venice music at the time I moved over into this amorphous like SVP role which ended up being building out our web 3 and Community team but I spent the next six months just jumping in every single Twitter space talking to every single artist who is in the space all the platforms while they were getting ready to launch like catalog and sound XYZ and learning what was the value proposition

right and from an artist's perspective the value prop is pretty pretty simple quite frankly it's like okay we are uncapping what the value is of our music we are no longer having to be defined by the distribution format because that's traditionally what's always happened right if the distribution of a vinyl or a CD or anything in the past it's always been like okay you can sell it for this much like streaming 9.99 like that's where we're all at and with music nfts that didn't exist it was okay I am giving a digital fingerprint that is persistent Forever on chain that you have ownership of you have ownership of this collectible and I set whatever value I want for it just like quite

frankly all the other Arts do if you look at what artists like painters and digital artists have been doing forever it's defining the value of their work musicians have never had that opportunity it's that's pretty clear and you would see the big highlights of someone selling a music nft on sound and making more in 10 seconds and they would make in years of Music royalties and those are like big flashy headlines I have some thoughts as to whether that's actually healthy or not because it's not a fully sustainable business model by itself I see it as auxiliary to building out an entire music strategy as an artist but it can very much drive a lot

of value for artists from the fan side I think this is where a lot of people get tripped up because a fan would say why am I going to buy an nft for an exponential multiple when I can just listen to all the music in my pocket and it's a better listening experience it's lean back I don't have to do anything why would I buy a music nft several reasons why I think more and more fans will get on board with music nfts and I don't know that it ever has a full mainstream moment I think that the devils and the details in terms of what we Define as mainstream but I continue to see it grow and grow like every day one is this is something that Cooper

Turley has talked about so I want to give him credit this idea of collecting rookie cards if you think of it just as like digital Collectibles as like trading cards that you would have for like baseball or basketball or whatever you buy a Tom Brady rookie card whether you got it the day it came out or you bought it way after the fact for a higher multiple I think it's an analog people start to understand it's like oh of course as Tom Brady becomes more prevalent and goes to the Hall of Fame and all these things will drive value to his Collectibles because people Define it as valuable same thing with music nfts if you take an early bet on an artist and they grow

you actually for the first time in history really as a fan are actually able to get some of the value accrual so perfect example Daniel Allen is one of the biggest artists in web3 music today I would say he's got as good a shot as anyone is having like a mainstream crossover success his first Genesis nfts on catalog and sound XYZ about a year ago sold for anywhere between like 0.05.1 maybe 0.15 at the top you can't get one underneath one eath right now like I go ahead and look and you can't find it and that is all due to the fact of him building in this space and if you were an early supporter of

him like you've also gone to see that benefit so that's one and I'll pause there any questions on that because it can definitely go into audio as well I do have a question I also wonder so when in 2021 we saw tons of nft projects and even not even to do with music but people were just spectating on them they were like oh we're gonna buy this because I know that this is the future for art for communities for whatever and obviously what happened with Blau and some of them who were launching they were I think overvalued and that was just part of the hype I think of nfts in 2021 you could sold anything as an nfts everyone it's gonna work so I wonder here with the prices that and they're not massive right now I guess at point one but do we think that this is still

people in the space who just naturally speculate and that's part of that price being driven up as much as it is now do you think that levels out and goes down and becomes less or what are your thoughts on that depends on the use case of the nft I think when it comes to a Marketplace like sound XYZ it is in part driven by speculation I think that's healthy and any sort of collection you can't have a uniform collector base in anything you have people that collect because they want to be patrons you have people that collect because they want to speculate you have people that collect because they see it as a store of value or it gives them certain access to the artist that they wouldn't otherwise have and you have people where that's all of the

answers like they what they want to do all that what has been interesting is the volume is actually growing month over month at a significant clip right now in the middle of a bear Market where most projects in general like outside of music just in general in nfts are dealing with attrition right they're dealing with their holder accounts going down month over month before price is going down we seem to like steady a little bit but by and large a lot of businesses are questioning their models like to work music has not had that problem there's actually been I'll keep pointing to sound XYZ because I think it's really like the epicenter of music nfts right

now the growth in amount of artists onboarded and the amount of holders onboarded every month is pretty astounding and what we've seen is that the mint prices have gone down to something that's more reasonable so instead of it being 0.1 which would be call it 128 right now it's 0.01 and so it's like 12 bucks or 25 bucks or whatever that's much more palatable for getting a mainstream audience on board collecting more and more nfts and so I think we're finding you know that's experimenting and iterating and that's not across everyone some people have higher price points because they earned it and they

have more notoriety but I agree with you to go back to your question that a lot of the massive sales that we saw in 2021 were not sustainable and we've seen the air in that balloon go away but what we are seeing in its place is a Vibrant Community of collectors and artists that are building in the space and have an eye on the future on where this goes I want to build off what you're saying I'm also curious to go back to your points around why collectors would buy nfts but let's just build off of sound XYZ because I do think that is such an interesting use case and you put out a great thread recently about why they're having such great success and you had

what you called the 3C Community context in clout and we talk so much about community on this show and it was also interesting I noticed that your title I think at Venice music you said was web3 and community so there's such a natural tie in there which I just love can you touch on what has led to sound xyz's success so breaking each of those down the contacts the content Community start with community it's a buzzword that I'm sure a lot of people have rolled their eyes at when they hear because often what is billed as a community is really just an investment Club it's just a bunch of speculators tied together hoping that up and when it doesn't they leave I've seen

it I've been a part of a bunch of pfp projects where the bear started and it was like oh it's a lot quieter in here but there's a community that you talked about isn't as strong you don't get that with music and what's been really interesting is a lot of artists in the nature of like sound for people that don't know you're typically dropping releases and the same Cadence that you would for streaming so if you're dropping a track for streaming services call it once a month probably on sound once a month and so there's kind of like this feedback loop that you get to create with your community you're able to reward them if they bought in previously they get pre-sell access for a discount but you have the constant content feed for them

which is great in a space of being in the attention economy what's interesting is it's a jumping off point where usually the cycle that I see here the process that I see is someone releases on sound XYZ they use that as a jumping off point to create usually like a telegram group now instead of a Discord of all of their collectors and so already that is like a very different proposition than what web 2 music looks like right because maybe you have a fan club but if you have a Lady Gaga fan club is Lady Gaga in it no she's not in it and it's like a very different it's more of just like Oh I'm a fan of you and you think of people that love Bieber One Direction or Ariana

or whatever it's just an expression of their fandom this is not that this is an artist sitting with their collectors on a Level Playing Field and just discussing music and getting feedback on the things that they want to release and it's a constant dialogue and it's almost never driven by Financial speculation it's honestly of all the communities the music ones are the ones I spend the most time in because it's just people that are all tied together by their love of music and not speculation most of us are buying these planning to Volta for a while anyways and so it really is just about do I have a sense of belonging here do I feel like these people have the same set of values that I do and

that is what keeps people going so it's really strong I mean a collector's group with most of the like sound XYZ top collectors there's a bunch of different artists that have their own telegram groups I'm a part of and I come back every day because it's always something fresh and people that you get to know and becomes like bringing face to the faceless you actually get to know the stories behind the artist which take me into my second point which is context which is something that we have lost in streaming and I I don't think people are really aware of it but if you go back a decade like mid 2000s and I brought up the story earlier of going home and running to read the blogs and I remember where I was when I read about section 80 and

Kendrick Lamar I remember where I was I downloaded comeback season in 10th grade in history class and showed Drake to my friends like I know the stories around these artists and the moments and what it meant and what it felt like and we've lost it completely in streaming and it's taken some life out of music for a lot of people the benefit is you get all the music the downside is you get all the music like you don't actually know anything behind it and so why sound has really succeeded I can give like a direct example So Daniel Allen I brought up earlier he released his first EP on sound overstimulated I think it was around last February it was the first one that

they did on sound where you had to have a listening party which is everyone listened to actual EP together at the same time before you commit is like one of the most profound experiences that I've had in web3 so leading up to most mints they do like a Twitter space Daniel jumped on explained what the album meant to him you go to the detail page it's filled with artist notes about all the different songs and who he is and like it was bringing that context back to the music and then the moment of listening to the EP with a bunch of collectors at the same time something that I will always cherish and that context continues to to stay until this day and then the last piece I just

gotta jump in there just the one problem I see right there is how many times are you like I think about my fiance or like my good friends and we're listening to their music and they're like oh this is one of my favorite songs and I'm like oh what song is this and they're like I have no idea yeah it's just on a playlist that I love but I I couldn't tell you what the name is I couldn't tell you who the artist is like that is exactly what you're saying we have totally lost that whereas back in the day you really loved the artist that you followed and you were excited for their new releases and you were ready for them whereas now it's just like a you know being in front of a fire hose and it's great in some ways because wow like the

discovery of new music is off the charts I discover more new artists than I can handle but I don't have that connection anymore unless I go to the shows unless it's like a live show that's the only time when I feel like I get that connection yeah it's a yeah I think you're right it's a it's a problem maybe it's not a problem for everyone I was just gonna say is that a problem or is that just the way that the world is going and we just want to listen to music and it's less about and this sucks for artists like musicians I'm just trying to be on the other side here is that really a problem if you just like to listen to music and you're more worried about and focus on something else rather than trying to figure out like who this person is that sung it and

what the name of the song is we live in a world where you don't need to know that anymore you used to need to because that's the only way you could find it now you don't necessarily need it you know I don't know if that's a good thing or not but I agree with you I would say if our choice was taken away the way that distribution evolved is that our choice was taken away when you're having a fire hose of Music put in front of you you don't have any choice but to just take it in passively I have had my entire music habits changed I was a crate digger I was someone that wanted to find something new before everyone else now I just throw on pollen on Spotify or like my new music Friday or discover weekly and know that the algorithm understands me I'm gonna enjoy

the music and that is good for a lot of people and even for me for most of my listening my traditional music listening is on Spotify but it has opened an alternative path and it's one that can live in coexistence like I don't think think this kill is streaming I think that's where a lot of people get what web3 music is about wrong this I see as an added layer it allows for artists to have new experience with their collectors and fans provide more value to their music but I don't think like we eradicate streaming by any means and so it's really just about optionality and what you prefer at least have the option so cloud is one that I don't think a lot

of people are honest with themselves about how status driven just Society is in general it's no more true than on the internet you think about the curated profiles that people put on IG like showing the fancy cars that they have and the things that they own the places that they go they're not doing that for their own benefit if they were just doing it because they enjoyed it they wouldn't share it they're sharing it because status and clout is important to them I think similarly what you're seeing in the web 3 world is you know my friend did Gentry land calls it it's an actual term conspicuous consumption you have people that are rocking board eight pfps and things like that to flaunt it to stunt and what sound got really right

from the start was elevating The Collector profile was actually putting it on display who were the big dogs in the space how were people trending what did they own what were their Grails really like giving them a platform to it would be one thing to own all these nfts but to actually like show what I'm about and things and be able to climb a leaderboard so I can see trailing seven days 30 days all time compare myself to other people gamify it in a bit as like I found myself and I I like to think that I'm a fairly reserved Mentor but I'll be like damn I just woke up and I saw that I went down one place on the leaderboard I gotta get back in there

and find a mint that I'm excited about and so yeah there's and you've had people that have built entire careers off it like again Cooper Turley the biggest music nft collector he built an entire fund around the premise that like this dude spends more time in music nft web 3 world than anyone else and he can verifiably prove it through his wallet it's amazing like I don't know of any other career that you could do something like that that's why Spotify unwrapped is such a big deal right everyone is like oh I want to show off how much you think I listen to what genres what artists so it's like people do want to brag about who they listen to and especially if they're someone that was new that then became big if you can prove that you listened to them before

they became big I feel like that's so much clout you know what I mean I remember when I was on Soundcloud years and years ago I think I was in college maybe and I was listening to Tommy's like a DJ and I loved him but he was really small at the time and I was like oh this guy's going big I pushed it out to all my friends I was like yo you guys could hear this guy it's getting amazing and then he became really big like years later I was like I wish I could have capitalized on that somehow like I was there early you know and I helped him grow and so that was one of the when music nfps came on I was like oh I can see that because I had that moment and I was like I wish I could have owned

something or proved something instead of a screenshot from my phone from a conversation years ago so there's yeah exactly actually being able to own and verifiably prove that you were there early and be able to see value from that see some upside yeah exactly Jay I know you have a question but I just want to ask one thing just for to set some context for those that have not been in this space have used sound yet or played around music nfts can you give this system context like who are the artists that are making these right now and who are the people that are actually in their minting is this like a very young demographic is it web3 natives only or is it bringing in new people just give me a little bit of a background of who are the people that are all in this at the moment

yeah sure so it's definitely evolved I would say at the beginning when music nfts were just starting to become a thing you know the blouse and racs of the world it was very like electronic focused it was artists that had some sort of technical computer background where it just like intrinsically made sense Blau released a token gated Music Festival years ago which is still to this day wild to me like how far ahead of the curve he was with that and now you're seeing artists from all different genres from all different levels of technical expertise I mean there are so many like no code solutions for minting and yeah it's it's made it very easy

we're like collect across a wide spectrum I would say it's still fairly Western focused U.S is still the number one demo that's just a broad like across web3 in a lot of respect particularly culturally in nfts I think we're just kind of a little bit further ahead with this stuff and and people are starting to to catch up and then on the collector side it's growing so like sound I believe just crossed 6 000 unique holders which for perspective is roughly the size of a unique holder cow and a 10 000 pfp project one single one if you were to look at the total volume done on sound it's something like

a top 600 project on openc so it's very very nascent it's growing at an exponential Pace but it is very nascent we have definitely moved on a collector's side from a few people that got it and we're kind of like King making and controlling the market and trying to make this a thing to more and more newcomers coming on board and the mint sizes and prices I think are reflective of that okay I'm gonna jump in I guess I've two directions I want to take this in here one is you mentioned that the way you see this as sort of like a future model so streaming is not going to go anywhere we're still going to have streaming but

what we're going to do is it sounds like but I'd like to hear your sort of if you have a Playbook or a framework that you're thinking about this for artists is it sounds like what you think is artists might start by launching an nft of their music offer it to their super fans to bring together a smaller community of super fans which allows a sort of a different level of access and then maybe release it on streaming like a month later how do you think this plays out long term how will all of this work and what's the model that you think artists will use yeah I don't know that it needs to be delayed in terms of a release strategy like web3 first and

then streaming what I see is more of just adding another vertical so if you have your web 2 verticals across your web 2 release strategy your radio your marketing this is like another tool in the toolkit in the same way that like you'll go and release those songs to streaming you'll mint them as nfts for collectors and whether that has additional utility or not I'm not convinced that most nfts right now need to I think it's fine just to have an audio file and an album cover art and collect around that and really the utility you're giving is one the ability to collect that as a trading card potential upside as I ground to maybe it's access into a telegram group with

the artist but keeping that as simple as possible I think a lot of artists try to make it complicated and we're just not there yet in the future maybe you stratify a bunch of different access to things based on nfts that are owned I see nfts in like Tech going way more broad like I'm personally very bullish on ticketing nfts within music I think that's where we're gonna see the first mainstream adoption because it just makes too much sense for everyone the fact that Ticketmaster hasn't done it yet and I know that they're working on it because it makes sense for them right like why would they get cut out of the secondary Market when they could create a token and make sure that they have a Perpetual royalty so that's something where I have my eyes on more than any

other place for mainstream adoption because it makes sense on both sides of the marketplace but as it relates to music nfts yeah I think we'll see artists experimenting with a wide variety of nft types so whether it's one of one paid editions free nfts I think the word nft will go away we'll be calling these Collectibles the need to actually interact with crypto will become more and more obfuscated and they'll just be things that you hold like anything else on your phone uh that's the vision that I have I also kind of just see nfts and I'm just starting to wrap my head around this is it's a new file type on the internet right we talk about PDF jpeg mp3 mp4 and nft it's just a different

file type that is now trackable and programmable which you can't do with an MP3 you can't do with the jpeg or with a PDF and so it's kind of like if you think of lens protocol for example we're all posting content on there just the file type is not I don't know what the jpeg upload into Facebook it's now a JPEG with an nft wrapped around it why because people can collect it I can see who's actually interacting with my stuff on chain and verify that there's no cost associated with it there's no business model there just a better file for the internet to track things and to make those things be interoperable with other applications rather than just the one that I put it on right and I think there's tons of use cases with that for music if we just rap music in nfts

always even if we think business model aside there's just the interoperability aspect of having music be able to be used cross-platform and in different areas where rather than just on Spotify and I can't do anything with it when it's on Spotify it's just like it's stuck there I can put it in a playlist on Spotify but that's it right so I don't know if it makes it more discoverable or what it does or it makes them more utility I'm not sure but I think that idea is going to Blossom with music as well along with this whole business models around it and maybe sharing revenue streams and sharing royalties or however that ends up I'm curious right now what is the Playbook so there's all these people that are mincing nfts for their music currently are they doing it where it's just like one of's are they doing 100 of them for

some reason is it unlimited is there a Playbook yet or it's still so new that we have no idea The Playbook is experimentation for sure I I would say that there are a variety of ways that you can go as an artist I personally would recommend always sell less than you think you can for less than you think they're worth so you know if you think you can sell 50 sell 20 if you think that they're worth 0.1 sell them for 0.05. the point is to create a healthy ecosystem and make it worthwhile for your collectors as well and you also don't want to get so much juice at the beginning that you can't subsequently follow it up before anyone mints I think the first thing that they need to do is

just participate go support other artists go mint their stuff join their communities get in their telegrams see how they're communicating with one another get to know the collectors I mean you could literally go through the top 100 collectors on sound and get to know them pretty quickly go follow them on Twitter understand what their preferences are a lot of people don't realize particularly early on they see the success in the massive eth sales a lot of these artists it's not the same game as web 2. it's not a megaphone of trying to reach as many people as possible it is a Grassroots campaign it's more like a presidential campaign of going door-to-door the city council even going don't even get your vote

that's what it's like getting in front of collectors and just building personal relationships with them because it is the promise of a hundred true fans the promise of web 3 is that you don't need scale and that should be really exciting for a lot of artists who have been pigeonholed into having to create what is going to pop what's going to be viral what's going to be mainstream and that's like no you have full creative freedom make what you want and know that in this massive world of billions of people you can find a hundred true fans that are willing to pay for your work the work is just on you to go and find them so that's the Playbook more than anything is just participate get involved don't come out the gates firing with a mint like just go and learn and peel out

the ecosystem and meet people and ask questions don't be afraid of being the stupidest person in the room that's how you're gonna learn here's what I could see as being a Playbook it sounds like the issue previously into building a music career was you needed funding right and you needed distribution and so the record labels used to do that for you they would help you get started probably I don't know what all the funding was for but let's say equipment and maybe travel and getting into events and all that kind of stuff distribution is no longer as big of a problem because you can just start putting your music on SoundCloud and Spotify and now the whole world can see it the problem is that most that money's still going to the record labels instead if I am a new artist and I'm minting these music nfts

and I'm starting to build a community can I almost form I don't know if it necessarily has to be a dow but let's say these community members are basically funding me to get started right if I can sell a bunch of these music nfts in the beginning of my career to make x amount 20K 30k whatever it is maybe even more these are people who are almost like many VCS who believe in this person early I'm going to give a couple hundred dollars to them and if I can get a few hundred people to do that I'm going to make a decent money now I've been funded basically and once that works now I can go and put my stuff on Spotify or wherever and the record label is another taking 80 of that could that be a model or am I missing something here no no and artists have done that so

we talked about Daniel Allen's overstimulated project the EP that I bought on sound yeah that was a mirror raise before it was an EP he actually did was exactly what you just said it was you know I'm gonna sell a portion of my royalties I'm gonna do this mirror crowd fund and so people bought nfts that then got them an allocation of tokens have represented their share in the Dow and so a percent of royalties went back into the Dow percent of royalties went to Daniel he used that to fund his project and to ship it out and so yeah we're seeing that in a multitude of ways whether it's to raise for a specific project whether it is creating work like there's a lot of collectives that are being developed right now like

loners is a great example by Rio Cregan where they're dropping collaborative call it like individual Music nft Drops a percentage of royalties go back into a treasury they're using that to fund you know doing recording a bunch of eps out in La together and being able to get all the equipment and every everyone together so yeah one of the biggest areas that labels have historically had control is their piggy bank like right as an artist as a struggling artist you needed access to Capital and you couldn't take out a traditional loan you can't go really anywhere else to get that money now you absolutely can go and Pitch collectors and try to crowd yeah your fans what you want to be

careful of is I've never liked the idea of artists being like effectively like stocks and it can it can very much move in that way if you start having like you mentioned VCS I don't really want to see myself as like an LP that will change relationship just like it does change the relationship between a label and an artist of what your expectations are and how you feel about the music like but it is it's a delicate balance for sure it's anyone's guess where this goes there's the funding side of things that web3 can enable there's the better experiences for your fans it can enable maybe more discoverability it's like the whole spectrum is doing things

so I'm curious you were just at Art Basel recently in early December what was the vibe like there and maybe what was one takeaway or one conversation that you had that really got you excited about the future yeah it was much more subdued than last year last year was like in the height of the bull and so it was in the practical sense like there was less organic foot traffic although getting across Miami and Basel is always a nightmare just take my word for it but there was one event put on by Karma wave and his partner Violetta incredible like it was invite only for their holders

basically they put on like a set with a couple other artists that are experimenting in web 3 and it was a lot of people that I had been able to support throughout the year and see them in person for the first time and get to really engage with them and see how they're building and it was less of one conversation and more of the vibe of having all of those incredible artists and collectors in one room and it just being like this energy of support for one another and I think we eded out a lot of tourists over the last several months and the people that are here now are certainly building for the long run and it's given people a lot more creative freedom I'm seeing people try new things I'm not sure when this is coming out but literally as we speak

Daniel who I've brought up a couple times in Rio are putting out a joint project for 2500 music nfts it'll be the biggest release on sound XYZ by more than double in a full-on bear market like that's the type of stuff that people are really swinging for the fences for because they're seeing the growth they're seeing the validation and that to me makes me really excited because when everything should be indicating that this is gonna be dead all I'm seeing is positive indicators that's so great to hear I love the optimism through it all is you gotta support each other and keep each other up that's great that's so awesome so let's just step back okay pull out our Looking Glass and look into the future

maybe it's only a year maybe it's five years we all know how fast this space moves any predictions you have or anything that you're looking down the road at and you're like oh yeah this is where I see this going whether it be things in the metaverse whether it be virtual concerts we didn't even really talk about virtual concerts but I think that's a whole big topic to touch on whether it be focusing on the collectors or on the musicians in general digital spaces and wearables I think people are not bullish enough on and it's going to come faster than we think I think it's still like a bridge too far for some people to think through like oh I would actually value things digitally more than I would in the

physical world because ultimately it goes back to this idea of like clout and presence why have something in your closet that no one can see when you're spending more and more time digitally every day in front of these people like that's gonna be where the perceived value is and so for artists virtual concerts are interesting I don't think we're there yet I'm more fascinated in like mixed reality like augmented experiences and it'll be really cool when we get to a place where you're at a concert in real life and there are things augmented in the space for you to interact with whether it adds to your experience there in the moment or it's okay RSVP for an after party that's like

in a digital space with everyone the one thing that I'm really fascinated by is just like the melding of the physical and in digital world less of just seeing them get more and more intrinsically tied to one another and so yeah as an artist I think figuring out how you play in that space how you continue to bring digital things into your physical world and vice versa I'm seeing a lot of artists right now experimenting with like proof of participation nfts at their events and so you can imagine you go you scan a QR code you get a little collectible that's a very easy way for this artist to be able to identify you and be able to reward you in the future so maybe it's people that went to a certain amount of concerts get exclusive

pre-sale access or they get air drops something or whatever they have a direct line of communication in a way that they didn't previously because in the ticketing industry Live Nation owns all that data so those type of experiences is definitely what I'm interested in seeing how they continue to develop it just seems like there's a lot of value there for sure now I want to give a quick show for Austin for your stuff because I gotta say you're the first guest we've ever had come on the show who when I asked you what you wanted to show today you said nothing bad respect man you're like I just want to hang out and chat I don't want to give a show so I'll get a show For You Austin has an incredible podcast one big idea if you guys aren't listening to it

you should go check it out and he's got a great newsletter as well and he's really thrown out so much great content on Twitter so all of you listeners if you aren't following or subscribed go check out Austin he's got so much great stuff that he's producing Austin anything that I missed well actually starting tomorrow we're launching in partnership with sound XYZ a weekly radio show so I'm gonna be playing some of like the best music that I've been listening to over the past week will bring on different artists to interview them and like think kind of like Zane Lowe or like Travis Mills type of vibe for like an hour so that'll be yeah starting on Friday is I believe that she was at 2 p.m Eastern Time 11 A.M Pacific so I'll have it posted on my

Twitter if people want to follow me there nice I'm excited that's awesome sweet can't wait okay I think one of the hardest things I find is just the discoverability of entity music right now is like I tried to find I think you and I were chatting in a in a telegram group because I was asking if anybody is using a music nft for their intro music through their podcast and you were like yeah I'm using one and I was like how the heck did you find it I mean you go to sound XYZ but we don't have that discoverability I was so stoked to see that Winamp is now integrating I don't even use Winamp and I was stoked to see that there's a music app that is integrating nfts into their platform oh that's cool yeah yeah okay typically we ask what's an nft you'll never sell about what's a

music nft you'll never sell oh there's Rio craigans feel is one of my favorite tracks he's ever put out and he's become a really close friend so that one's vaulted for sure nice okay favorite person to follow on Twitter Gabby Goldberg I find her takes very insightful she doesn't write a lot but when she does like I drop everything that I'm doing and pay attention she's yeah a bright light in the space a big fan I just dm'd her like two days ago so yeah yeah literally just got connected to her at like a music conference in New York and then we have a one-on-one a week ago she's an incredible human being

and so that's so smart yeah we want to get on the podcast because she's got when she does tweet it's got some amazing stuff it's always good yeah she's very much quality over quantity yeah yeah definitely favorite web3 tool and that might not be necessarily your tool maybe it's a tool for collectors maybe it's a tool for artists it's not a mask like a cop-out I assume people say that a lot like no no one says really I mean it's a tool that you use more than anything like that I can't think of it's it's an amazing tool the fact that you have a browser while it is yeah it allows you access to the entire world of daps so yeah metamask is is number one for me nice you should be

doing no paid promos so metamask if you want to pay me hit me up okay final question if you had a billboard that one billion people were going to see what would you write on it this is going to be cliche but just be kind to one another love it like that's really that would be it it's there's a lot of negativity in the space right now and people are just like going through a lot and you never know what anyone's dealing with so just yeah be nice be kind to one another you'd be amazed how many guests say something in that vein most guests have something just loving spread love love yourself be kind we don't share that inspiration and that wisdom enough

it feels I don't know why it feels cliche it's it's the whole purpose of you should be we're right we're at this together right yeah amen Austin this has been awesome man thanks for the time really appreciate it thanks for your wisdom thanks for your Insight I can't wait to check out your collection your vaults on on sound XYZ check it out yeah I'm up there thanks Austin thanks guys thank you for listening to web3 Academy we hope this helps you along your web 3 Journey if it does please share this episode And subscribe so you don't miss the next one nothing in this podcast was Financial advice crypto and web 3 can be risky you can literally lose it all in fact if you invest on account of what we say you probably will lose it all so don't do

that in all honesty the point of this podcast is to remove the noise of markets and price and focus on utility and implementation anyway so you should not take any of this as Financial advice thank you friends and see you in the next one