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Music and web3: takeaways from our Sandbox Summit


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Last month, Music Ally held its first in-person event in two years, the Sandbox Summit web3 Special in London. It was sold out, with a day of talks and panels exploring what web3 means for musicians and for the music industry.

(If you weren’t able to attend, fear not: you can watch every minute of every panel, talk and presentation on-demand and at your leisure.)

The term ‘web3’ covers a lot of ground: crypto, decentralisation, NFTs, DAOs, DeFi, the metaverse… which means that some of the day’s conversations were specific to certain areas. But web3 is all connected, right?! So what were the over-arching learnings that emerged from all the panels, taken together? Here is our pick from the day.

web3 nfts panel

It’s important to look backwards to understand NFTs going forwards

A lot of the things that make web3 stuff important – decentralisation, the various protocols, the ethos –  are not necessarily front of mind for many people in the music industry – just like they don’t think about how email works.

Even for well-informed newcomers, choosing how you might engage with NFTs is confusing, but can become clearer when you think about existing products or income streams within the music business.

Throughout the Sandbox Summit, speakers referred back to their existing, non-web3 experiences to offer pointers for future businesses. One example: taking a moment to think about how you sell physical items (like merch) and engage with fans in non-web3 ways can help you to make sense of what might appeal to them in the web3 / NFTs universe.

NFTs are often still seen as a single object, to be sold and marketed as an event of and by itself. But NFTs can be anything you want. The question is: what do you want it to be? What you do and sell already can be a helpful pointer for that.

Another good way to think about the opportunities of web3 is to think of it as a technology that serves your niche community – unlike Web 2.0 which is about serving customers at volume.

“We’re still so early” is the cliché of clichés in the crypto/web3 space – but it was mentioned many times. 

What does this mean in non-cliché speak? Well: web3 tech is still a bit unwieldy. If you know what you’re doing, setting up a crypto wallet is simple, for example. But if you don’t, it can feel intimidating, and a step too far for many mainstream music fans.

Being early isn’t just about barriers to entry though: it’s the fact that web3 can be so many unique things to every creator – and many of those things have not really been figured out yet. A great time to experiment, but also one where a lot of education (of artists and their teams, and also of fans) is required.

Also: consolidation is coming. Companies will fold or be absorbed by others: good luck with spotting who’s really here for the long term! Meanwhile, there is not yet a clear set of ‘standardised’ ways to do the many things web3 offers. Again, that’s a spur for experimentation and innovation, but also potentially a recipe for confusion.

Is web3 reviving the concept of ‘ownership’ in music?

Spoiler: the answer to this question is ‘nope’. Even in the streaming era, ownership hasn’t gone away. Music fans have been buying vinyl albums in increasing-again numbers, while merch remains a significant part of many artists’ incomes, with plenty of innovation around products and launch campaigns for their new items. Ownership as a signal of fandom never went away, even though the predominant mode of consuming music – streaming – is about access not ownership.

That said… we noted a strand of thinking around web3 that wants to ally some of these new technologies to the idea of ownership, and indeed to the idea that ownership is the real proof of fandom. If you like an artist, you might stream their music, but if you love them, you’ll want to buy their NFT, their avatar skin, etc.

There are holes in this theory: there are other proofs of fandom beyond buying, and these new digital items sit alongside physical merch and music in appeal rather than superceding them. But it’s an interesting strand nonetheless: the pitch for web3 as a way for fans to spend money on their favourite artists more directly, and thus help them to thrive even if their streaming revenues are small.

global rockstar sandbox web3

DAOs are powerful and desirable – but they may still be hard to describe, or align with your use-case

What is a DAO (beyond its initialised description of Decentralised Autonomous Organisation?) Well, it’s complex. DAOs can be fan clubs or members’ clubs or VIP lounges; but they can also be new forms of communities for people who want to distribute power and money in innovative ways.

One speaker jokingly called DAOs “chat rooms with bank accounts”, and while that’s reductive, it’s not a million miles from the truth. Maybe the DAO that works for you is a community where you pay for membership: a Discord server where ideas can be thrashed out and celebrated. 

But also, that ‘fan club’ could be an important and complex part of your artist’s business – where members vote and are rewarded for their actions. There’s lots to think about here, including, how far should you let fans in? And how far do fans want to be allowed to have input in artists’ work? 

There are plenty of things you can – and may want – to do that don’t need web3. 

Whether web3 or Web 2.0 (which we noticed web3 people tend to call web2, which at least makes narrative sense) the tasks at hand revolve around serving fans: and it’s still fair to say that Web 2.0 is fine and dandy for a lot of those tasks.

Do you have an idea that can really only be achieved with NFTs (note: not an idea that extends only as far as ‘make NFTs because everyone is making NFTs’)? Do you really need a DAO rather than, say, a closed WhatsApp group? Would a whizzy artist-branded metaverse really serve you and your fans better than a well-managed mailing list?

As we said, it’s a great time to be experimenting with various facets of web3. But not at the expense of doing existing Web 2.0 / web2 things well that still matter. And it’s always useful to ask the question ‘does this really need to be web3?’ early in a project. The answer may well be ‘Yes!’ – and those are the projects worth pursuing.

Sandbox Summit Web3 Special

Artist buy-in is absolutely crucial to web3 music projects

Yes, you can launch NFTs, a Discord server or a metaverse activation for an artist without their involvement, just as you can run social-media accounts for them. But our sense from Sandbox Summit is that everything is more powerful when the artist at least buys in to the project, and ideally is enthusiastically involved.

Artists’ creative visions are key to many of the best web3 projects, and their voices are just as important in explaining to fans what they’re doing, why they’re doing it, and how those fans can be involved. And of course, artists are on the front line of any backlash if fans decide a project is ill-thought-out or inappropriate.

This feels like a positive thing: artists at the centre, driving their web3 projects, or at least giving their blessing to a team they trust to do them well. And if an artist really doesn’t buy in to web3 at this point, that’s a useful spur to kick a project into the long grass, or at least rethink it in a way that can convince them.

There are a lot of things still to be ironed out: there are some fascinating web3 projects that are essentially real-time experiments.

That means not only is it not clear if these ideas will work yet; but also whether those projects are ethically fuzzy, and what it means if it turns out that they make some of us uncomfortable. Profit-sharing, smart-contract rights division, and pooling crypto funds all sound interesting and potentially revolutionary, but will they work, in reality, in a way that feels legit and fair?

“Web3 music” is probably not going to be what you think it is.

It’s not just going to be “songs but streamed on some sort of web3 platform” (but it will also be that.) One big conceptual change is that three-minute pop songs may not fit well into how web3-enabled consumption will really work.

A web3 metaverse experience for instance might not want discrete three-minute songs at all – instead, it may need music that is manipulable in construction, length, and sound. That’s a new form of “song” that doesn’t fit our traditional understanding – and which connects with millions of users.

One striking point from the Summit’s session on web3 music services concerned transparency, privacy and data portability. The point being that these principles could be baked into the philosophy of new services in a way that they perhaps have not been for the streaming services and social networks that emerged from the Web 2.0 era.

Obvious caveats: we’ve italicised ‘could’ because there’s no guarantee every web3 platform will respect those principles – as cynics might put it: humans gonna human! – and you might also question whether listeners truly prize those values enough to switch from their favourite Web 2.0 service(s) to new, unproven web3 rivals.

web3 graphic

The crypto crash could be good for innovation

You’d be forgiven for thinking the recent crash in the crypto markets is bad news for web3 in general, and web3 music (across all its vectors) specifically. There’s no doubt it brings challenges for consumer confidence, while the financial health and funding streams of web3 music startups may take a wobble too.

However, at the Summit there were two alternative arguments put forward about why the crypto crash might be good for this space. First, it’ll weed out the people just trying to make a fast buck who don’t really care about music, artists or fans. So long, get-rich-quick bros, it just means more air for the properly-committed people.

Second, the practical argument that the crypto crash by definition brings down some of the costs of doing web3 business – NFTs, smart contracts and more – which in turn could spur even more experiments and innovation. So there are reasons to be optimistic amid the current shaky market, although the challenges (confidence, funding etc) are real too.

web3 hasn’t changed copyright laws or financial regulations

Our final takeaway is also (sorry!) a slight trumpet blast on our own behalf. When we put together the programme for the Sandbox Summit, we wanted it to be a room full of MUSIC people – people from the music industry with varying levels of web3 experience and knowledge, and people from the web3 world who genuinely love music. And across both those groups, we wanted plenty of well-honed bullshit radars, to ensure empty, boosterish hype was given short shrift.

It felt like we succeeded, and never more so than when the conversation swerved traditional ‘revolutionising the industry / cutting out the middlemen’ rhetoric in favour of sharp assessments of how web3 needs to adapt to music, rather than just vice versa.

Speakers like Vickie Nauman and Sophie Goossens epitomised this, making it very clear that being a web3 startup or service doesn’t give you a waiver from existing copyright laws and financial regulations. Which in turn becomes a useful first test for artist teams and labels to use when talking to startups: do they show any interest in engaging with all this, rather than airily dismissing it? If so, that’s potential partner material…


Written by: Joe Sparrow