How Music NFT Empowers the Creator Economy: An Overview of 5 Music NFTs, Led by Euterpe

Original source: SeeDao NFT Club Twitter

Original author: SeeDao NFT Club @Gink5814

1. Overview of Music NFT

1.1 Industry Overview

The domestic music industry market has grown with the The epidemic has passed and the rise of short video platforms has picked up. The "2021 Chinese Musician Report" written by the Communication University of China shows that in 2021, the proportion of musicians' income in the lower income and middle income will decrease, and in the high income. proportion has increased. In 2021, musicians with a monthly income of less than 5,000 yuan accounted for 48.51%, 28.65% of musicians had a monthly income of more than 10,000 yuan, and musicians with a monthly income of more than 50,000 yuan accounted for 3.41%.

The report also shows that the In 2020, 64.75% of musicians uploaded short music videos, compared to 54.08% in 2020, a year-on-year increase of 10%. Among them, more than half of the musicians have used the Douyin platform to spread music, accounting for 55.21%. The communication effect of the short video platform, especially the Douyin platform, has been affirmed by musicians. Among the digital music platforms with the best promotion effect, musicians who choose Douyin accounted for 33.37%, ranking second only to Tencent Music.

In the overseas music market where streaming media plays a major role, the profit margin of streaming media is very low for 99% of artists, which is low enough to be prohibitive .

“…consistently achieving around 1 million UK streams per month is probably some kind of guideline, the minimum bar for making a living from music, At least if UK streaming is supplemented by non-UK streaming and other revenue streams...the number of artists achieving 1 million UK streams or more in October 2020 is 1723...or 0.41% of all artists [in our database]."

Quoted from Earnings of Music Creators in the Digital Age, UK Intellectual Property Office (IPO ）A 224-page report

After Defi Summer, the profile picture (PFP) avatar NFT track surged like a thunderbolt on the flat ground, and music NFT became It becomes the focus of people's next attention. But the social and financial value generated by musical NFT collections has yet to reach the same level of sustained success as their visual counterparts. The market value of music NFT in 2021 is approximately US$1.243 billion, compared with the market value of avatar NFT of approximately US$10.4 billion.

1.2 Technical background

The vast majority of music NFT transactions and circulation are in OpenSea, and The platform is based on ZORA's own trading market. ZORA is an NFT market protocol that will not go down, has composability, immutability, and accessibility. ZORA V3 includes several new mechanisms to incentivize platforms built on the protocol, as well as a breakthrough modular architectural design that allows for a permissionless system.

ZORA has a built-in Promoter incentive mechanism that allows promoters to find ultimate buyers for NFT. When issuing an NFT project, set the share of the promoter's incentive fee. To earn the promoter's incentive, the user only needs to submit the wallet address in the user interface, and the platform will generate a link. This reward is earned if the Promoter finds a buyer. This is a powerful incentive mechanism for developers and curators to integrate the ZORA protocol and directly capture the value they create.

2. Product Introduction

2.1 Euterpe

Project Introduction

Euterpe is the world's first IP-driven, embedded SocialFi ecosystem Copyright NFT platform. The team is committed to creating a professional B2C market for high-quality IP NFT, free from infringement and fraud. Euterpe will also embed the SocialFi ecosystem, turning passive fans into active stakeholders who will be incentivized to contribute to the community through their contribution to the community. In the Metaverse, IP is everything. Euterpe started with music IP, and then expanded to a wide range of IP fields including videos, games, books, concerts, celebrity peripherals, etc.

Team

Jerry Liu (CEO) , obtained a Ph.D. in Intellectual Property Law from Stanford University, and is currently a researcher at the Center for Internet and Society at Stanford University. He used to be the director of the Center for Intellectual Property and Technology Law at the University of San Francisco, as well as IP giants such as Disney, Warner, Microsoft, International Phonographic Association, and American Motion Picture Association. legal counsel.

Charles Cheng (CFO), graduated from Stanford Law School. Previously worked as a partner at Amino Capital, was a consulting expert of Alumni Ventures Group, a member of Stanford Angels & Entrepreneurs, and was selected as Forbes 2021 North American Chinese Elite TOP60 last year.

Lincoln Deng (CTO), Doctor of Scientific Computing at Stanford, former founder of technology company Sally Inc, senior architect of ProPlus, and senior engineer of Synopsys.

Leon Xiu (CCO), before joining Euterpe, he served as Chinese director of Tencent Music Entertainment Group (TME), music director of ByteDance and Director of Copyright at Sony Music Entertainment.

Woody Mu (in charge of strategic cooperation), before joining Euterpe, was the chief representative of the Alibaba Entertainment Strategy Committee and the manager of the International Department of Warner Bros. Chen Kaige's teacher.

Roland Vogl (Consultant), Executive Director of Codex, a Stanford legal tech incubator, and Executive Director of the Technology Law Program at Stanford Law School. Co-founder of Vator, Inc. and SIPX, Inc.

The Euterpe team consists of blockchain innovators and intellectual property from Stanford, Google, Meta, TME, ByteDance, Alibaba Entertainment, Sony Music and Warner Bro. Composition of experts.

Funding

Team already awarded in early 2022 Early-stage financing exceeded US$7 million, and investment institutions include Fenbushi Capital, Huobi Ventures, BingX Venture, HKICEx, UpHonest, Brightway Future, LD Capital, Titan Capital, etc., with relatively high institutional attention.

Products

Euterpe in 2021 The Alpha version test was carried out every quarter, and cooperation with more than 30 record companies has been reached, and thousands of songs have been cooperated. As of press time, Euterpe has not been officially launched. According to the official disclosure, for creators and copyright owners, the Euterpe platform casts and issues NFT for the copyright of their works, and greatly increases the value of copyright through Stanford’s Nobel Prize-winning NFT auction. Create instant monetization channels and expand the influence of works through SocialFi; for investors, they can discover outstanding artists and their works through their own vision and taste, invest in copyright NFT, not only gain NFT value-added, but also higher than Spotify The stable copyright income of more than ten times that of traditional streaming media such as YouTube; for other fans, the platform provides various participation methods (SocialFi), and participants can get generous rewards from the platform while enjoying works and promoting works. The platform will have three SocialFi mining methods:

play mining

Users can choose to participate in the playing-mining mechanism, and while playing works, they can get a certain token reward according to their playing time.

Share Mining

Downloaded The user of the copy of the work can obtain a link specially made by the EUT community for the user, and the user can be on the EUT community or other media platforms, such as Twitter, Facebook or Telegram. If other users download or watch streaming media content through this link, the user will get a certain Token reward.

Voting Mining

EUT Community A series of leaderboards will be released weekly to aggregate the most valuable works in different genres (such as Top 100), voted by artists, fans and other users in the community, and combined with dimensions to determine the final leaderboard ranking, If the works voted by voters rise steadily on the leaderboard, they can get generous Token rewards.

2.2 WRAPSOUND (WVRPS)

Project Introduction

WarpSound is a subsidiary of Authentic Artists, also known as WVRPS. WarpSound is an interactive, AI-powered cluster backed by some celebrities and well-known artists. Produce new virtual artists, social music experiences, and music collectibles for virtual worlds through cutting-edge deep learning, game engines, and blockchain technologies. WRAPSOUND's goal is to help people reconnect with music.

TEAM

CHRIS MCGARRY (Founder) , Harvard and Stanford background, prior to launching Authentic Artists + WarpSound, Chris led music at Oculus VR, marketed 10 #1 electronic and hip hop albums, served on Google's Enterprise Partner Advisory Board, produced for Prince Vinyl mixing, in charge of stage performances at Burning Man.

ANDY POON (Lead Artist) is an Emmy Award-winning art director and illustrator who has worked in the animation, live-action and toy industries for Dragon Illustrations and leads for The Prince, Rick and Morty, Storyhawk, Monster High, Monster Machines, Arrow, The Flash and more.

JEFF NICHOLAS (Creative/Product Director) has been in the industry for more than 20 years, exploring and working on the topic of how to integrate art, music and technology. Previously led music agency The Uprising Creative, was Head of Innovation at Live Nation, and directed music videos and VR experiences for artists like Justin Timberlake, Rihanna, Coldplay, Major Lazer, Lil Wayne, and more.

TERRA NAOMI (Web3 Marketing Operations) has been building online communities since 2005 and is the No. 1 Youtube Best Music Video Award winner, Universal Music Recording Artist for Publisher/Island Records, Async Art Artist + Team Member.

Lindsey Byrnes (Head of Strategic Partnerships) was previously responsible for sales and marketing for Thrasher and Juxtapoz magazines, then worked as a photographer and creative director until joining WVRPS.

Funding

June 22nd, Metaverse music platform Authentic Artists announced the completion of a round of strategic financing. Warner Music Group, Crush Ventures, Crush Music, Nike RTFKT founder Steven Vasilev, and The Sandbox co-founder Sebastien Borget participated in the investment.

2.3 AM DAO

Project Introduction
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AM DAO is a cultural DAO organization, aiming to help more art music creators migrate to the Web3 world, and to cultivate and incubate art and music works in the Web3 world , blur the boundaries between fans, investors and artists, and build a common art and music utopia for DAO members.

Team

PinkPing (Founder) Psychedelic Artist, global travel expert, has in-depth research on music, bar culture and museums around the world. Rich art, music, and entertainment industry resources, super resource integration capabilities, and unique insights into the commercial operation of art music.

JUNYI (Founder, Chief Artist) Master of the Royal College of Art, Starbucks Generation Z emerging artist, Dior young artist, pioneer creator of digital art, creation involves monsters , life science, mysticism, cutting-edge technology, etc., and is committed to advancing the Web3.0 era through art.

Remix (Co-founder) has been deeply involved in the financial and medical industries for 6 years, senior product architect of many well-known platform products, smart city product design and planning and big data Industry experience, love mixing and light music, music player, serial entrepreneur.

Lawrence (Co-founder) graduated from Leeds with a bachelor's degree in Graphic Design, specializing in poster UI, micro-movie production, 3D animation, etc. Li Jiaqi is a visual designer of the live broadcast room, likes fashion art, clothing painting, and music, and is studying the history of modern music development.

Vic (Co-founder) financial industry product team, the current Crypto industry issuance project, has successfully issued a number of DEFI, Gamefi and other types of projects, mainly responsible for the project management and advancement.

Will (Co-founder) Master of Laws in International Business Law in the United States, and later in charge of IPO cross-border financing in a Beijing law firm, and once worked as the director of VR&AI digital therapy in Hangzhou Startup company co-founder and legal counsel, investment and financing, international market. Currently a lawyer for all in web3 and a former rock band guitarist.

2.4 Catalog

Project Introduction

Catalog is a digital record store and music community where fans listen, discover and directly support the music they love. Artists immediately receive 100% of revenue from record sales, as well as a chosen share of secondary market resales, without giving up their rights. By collecting works on the Catalog, fans can establish permanent connections with artists and share their success together.

By publishing a Catalog Record, it represents the genesis version of an artist's work online. They are unique, 1/1 record releases that live forever on the internet, independent of any one platform, and offer artists and fans a programmable canvas to build a new world of music ownership.

Funding

Late June 2021 , Catalog was led by 1confirmation and completed a financing plan of US$2.2 million, which was mainly used to expand the team. Before the financing, the team members increased from 3 to 5 people, and the information of the team members was not disclosed.

2.5 Royal

Project Introduction

is a music investment platform that artists can use to sell their songs and fans can buy rights to the songs and earn royalties from the songs they buy Income, in order to achieve a win-win situation for both parties. Strive to give artists and fans more openly investment opportunities that are limited to specific groups within the traditional recording industry, such as private equity firms, hedge funds, and record labels.

TEAM

Justin Blau AKA 3LAU ( Founder & CEO), an early encryption adopter and blockchain advocate, he began to participate in NFT in 2018. In addition, he is also an electronic dance music artist and producer. As one of the five highest-paid artists in the field of electronic dance music, he was listed in Fortune magazine and ranked 8th among the most influential creators. bit. In March 2021, 3LAU sold the world's first digitally tokenized album, generating a record $11.7 million in revenue, and its total NFT sales over the past year exceeded $20 million.

JD Ross (Co-Founder) Prior to this, JD co-founded Opendoor ($OPEN) and was a general partner at Atomic, a venture studio that co-founded startups, Including Hims & Hers, Bungalow, Butter, Homebound, Villa, OpenStore, etc.

Funding

August 2021, Royal announced the completion of a $16 million seed round led by Paradigm and top Silicon Valley investor Peter Thiel's Founders Fund. In November of the same year, Royal once again announced that it had completed a financing of US$55 million, with participation from a16z, Coinbase Ventures and Paradigm, The Chainsmokers, Nas, Logic&Kygo, etc. Heavyweight institutions and many European and American musicians have participated, and this fund will be used to invest in the development of its ecosystem.

3. Equity distribution

This part will be for Euterpe, WVRPS, AM DAO, Catalog , Royal five products from the horizontal comparison in terms of copyright.

Choose Euterpe artists or record companies and other copyright owners to release their works to the EUT community to initiate crowdfunding, issue NFT to obtain early creative financial support and transfer some of their own The copyright is given to fans who invested in the early stage. Artists and fans jointly own the copyright of the artwork, while the platform does not own the copyright. NFT holders distribute digital copyright income and part of mining rewards according to the copyright ratio.

WVRPS holders receive a free license to use the artwork and music associated with your WVRP for personal or commercial use. The WVRPS team does not limit the commercial benefits that holders can earn from the commercialization of WVRP. And you can use WVRPS music as material for secondary creation, WVRPS does not charge fees, you only need to mark the source of the sample. However, except for the picture IP other than music, the holder is not allowed to modify it for commercial use.

AM DAO is more aggressive in copyright and chooses to cooperate with public goods artists. The art projects incubated by AM DAO adopt the CC0 standard, whether it is the creator or the DAO All give up all their power and build on the basis of public goods. Seek to realize more through peripheral derivatives, offline performance space and other ways.

The Catalog Records issued by Catalog itself is a 1/1 record on the chain. It combines music and smart contracts through blockchain technology. A certain share ratio enjoys the royalty share of NFT when it changes hands in the secondary market. But in addition, Catalog as a platform does not divide clear and clear distribution of rights and interests for artists or collectors. The actual implementation and legal protection of the so-called "programmable canvas" have yet to be investigated, as shown in the figure below.

Artists on the Catalog are willing to provide live performance tickets

  Catalog's official commitment guidance to artists  

In addition, Catalog has also developed BPM 2.0 is a chat robot that allows users to order music from Catalog Zora and Sound.xyz in Discord.

The release of Royal NFT does not change the intricate music copyright issues in the traditional recording industry, but through streaming media royalties, to Endorsement for NFT. Artists who choose Royal will sign a contract when they issue NFT and issue LDA (Limited Digital Assets) through Royal. The contract specifies that LDAs of different rarities have the streaming media tax sharing rights of music singles, as shown in the figure below.

Big Boi 'Kill Jill (Feat.Killer Mike & Jeezy) Split Details

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Nas - Rare share details

4. Economic Model

The economic model of the music NFT track is very clear. Artists transfer their own sharing rights, and after the rights are confirmed through smart contracts or laws, NFTs are minted and issued. Fans collect NFT out of their love for idols and expectations of the future value of the works. The platform side simplifies the distribution threshold of music NFT, and provides copyright and supporting legal services to charge a certain fee as income.

Among the 5 products introduced in this article, the most eye-catching economic model is Euterpe. The addition of 3 types of SoicalFi extends the product link beyond the simple NFT issuance logic mentioned above. Playing and sharing two kinds of consumption behaviors of ordinary consumers have been included in the product ecology, and through voting mining, among the UGC content with mixed quality, the top boutiques are selected for tokenization. The flywheel effect that this economic model can bring is obvious: the token economy stimulates content consumers to participate in copyright auctions, artist and fan comment voting increases the volume of excellent works, fan sharing increases the number of streaming media playbacks, and ultimately stimulates tokens economy.

Traditional Web2 streaming media playback platform Tidal’s traffic is audius .co sound.xyz more than 10 times.

Music NFT App Emanate Apple The total download volume of Appstore is 1k+

5. Summary

Currently focusing on music and Web3 On a small-scale solution for artists and their fans, this just needs simple documentation to help people navigate the new support and interaction model. If an artist can make enough money from NFT sales to support himself and his art, that's a win.

However, the complex structure of music IP does not provide a framework for simple solutions. This tension between the simplicity that artists crave and the complex structure in which their art resides leads us to discover two dangerous phenomena in the field of modern music NFTs:

1. Simple language replaces the accurate and comprehensive description of rights that should have been included in the NFT contract.

2. In these contracts, there is a clear lack of specific instructions on when NFT is a speculative tool and when it is a marketing tool.

Quoted from "Defining the Ownership of Music NFT, From the Digital World to the Physical World-Water & Music"

As the music NFT track is getting hotter, Euterpe protects the interests of creators and token holders from the perspective of copyright. The team has the strength to create an effective copyright protection mechanism to avoid copyright infringement and establish compliance route to realize the compliant operation of the platform. AM DAO chose another direction, cooperating with works of art in the public domain to avoid the risk of copyright infringement. Focus on incubating more artists, and solve the business pain points of artists' cold start through the empowerment of DAO. By simplifying the business logic and splitting streaming media playback into NFT endorsement, Royal has not actually changed the traditional business model. It will take time to verify whether Catalog, as a platform, is really capable of helping and supervising creators, and whether content consumers can fulfill all the promises of creators.

Music NFT will become more and more popular in the future There should be wider circulation in the rich Web3 world. After a user has ownership of a piece of music, they will spontaneously want to use it in different scenarios in the Metaverse. For example, listening with friends in the Metaverse, as a way to show off after a game victory, as a symbol of your die-hard fans on your personal homepage, etc. In addition to confirming the rights of music through NFT, the project party should also consider how to spread music widely.

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