The Pain of the Traditional Music Streaming Industry

According to the "Global Music Report 2021" released by the International Federation of Phonographic Industry (IFPI), the music industry has been growing at a compound annual growth rate of 7.4% for seven consecutive years since 2014, and the total revenue of the global recorded music industry is already as high as $21.6 billion in 2020. Among them, digital streaming revenue is also showing year-on-year growth, with Spotify, the world's largest streaming music platform, at its peak with a market value of nearly $50 billion, becoming an important driver of the overall growth of the recorded music market.

With this kind of development, it's hard not to be optimistic about the development of the industry and the market. And it's true, this boom has brought a sense that music creators are living in the best of times. But the facts often contradict the intuition.

In October 2020, the issue of fair pay for music creators in the streaming era was finally addressed when the UK Department for Culture and Sport (DCMS) announced an investigation into streaming media such as Apple Music and Spotify.

At the time, DCMS committee chair Julian Knight MP stated bluntly that the growth of the streaming market "cannot come at the expense of talented and lesser-known artists.

In the age of streaming, there is a significant income disparity between record labels and music creators, with most music creators receiving minimal compensation. According to 2019 data, mainstream record labels can earn nearly $1 million per hour through streaming alone, compared to the 80% of artists who earn even less than $300 per year from streaming. In May 2020, British violinist Tasmin Little revealed that her music was played millions of times over a six-month period, but this brought her less than but less than £20.

When it comes to musicians' remuneration, we have to mention royalties. In the music industry, royalties are essentially fees paid to copyright holders when musical works are sold, distributed, used in other media, or monetized in any way. In the U.S. market, the copyright for each musical composition is usually divided into two parts:

In practice, the streaming service providers will reach an agreement with the record companies for the right to play the songs, and pay the fee by the number of plays, which will be distributed to the above copyright holders in a certain percentage. It is known that streaming platforms usually pay less than $0.01 per play, ($0.003 to $0.005 for Spotify and $0.008201 for Apple Music).

So what is the actual percentage of revenue for music creators?

According to industry practice, record labels pay a portion of their revenue to creators, but that revenue is generated only after they have repaid the labels' investment in them.

The Economist notes that, on average, a billion plays generates about $7 million in profits for major labels, of which perhaps only $1 million goes to musicians. A rough estimate is that creators only get about 12 percent of all profits, with the rest of the money going to middlemen like record labels. Prominent music producer Kanye West has even referred to the record trade as "modern-day slavery.

Artists who are well known and topping the charts may be able to earn a decent income through streaming, but those who are known to the general public are still rare, and most artists face a revenue dilemma in the streaming era.

A survey of 1,277 U.S. musicians conducted by the nonprofit Music Industry Research Association (along with Princeton University and MusiCares) revealed that the median income for musicians in 2017 was about $35,000 (and only $21,300 from music-related sources), and 61 percent of musicians said their music-related income was not enough to cover their living expenses.

In the streaming era, musicians mostly earn income by holding concerts and selling peripherals. But with the new crown epidemic in full swing in 2020, earning income through concerts is no longer a viable option. But for some musicians, touring brings in more than 75% of their total income, which is certainly a major crisis in their lives.

So, where is the way out for musicians?

Opportunities in the Web3 Era

While most musicians are still at a loss in the face of heavy realities, some of the more market-savvy musicians have found another door to a new world - NFT. In 2021, Grammy Award winner Andre Anjos earned a whopping $777,000 from the sale of his new album NFT, YOU, which was more than his album sales over the past 10 years combined.

The success of Andre Anjos is not an isolated case. 2021 saw explosive growth in the NFT music segment, with sales reaching $22 million in February, up 24 times from January, and continuing in March of the same year, when sales rose to $26 million. At the same time, capital is also increasing its bets on the NFT music circuit. 21 May, Nima Capital, Sangha Capital and Tezos Foundation announced an investment in NFT music platform One Of, with an injection of up to $63 million, second only to the amount of funding received by star team Dapper Labs in March of the same year, and close to The investment is second only to the funding received by star team Dapper Labs in March of the same year, and close to the sum of all gaming NFT projects raised in the first half of the year.

This development trend of music NFT is not surprising, when the art market and game market in the chain has a blowout and growth, NFT and Web3 this fire to the music industry is also a kind of inevitable.

And the one we are going to introduce today is the Web3 music ecosystem - FANSI（https://bit.ly/3XIpClH）。

As a blockchain-based protocol, FANSI aims to help musicians explore new business models and thrive in the Web3 era through NFT and distributed music streaming mechanisms, thereby returning the power of music streaming to those who appreciate it, rather than centralized platforms that operate solely based on their own interests.

To achieve this vision, FANSI has introduced three main components to its Web3 music ecosystem:

FANSI: Music NFT Launch Service Platform

FANSI is a music NFT launch service platform that aims to help music artists around the world launch successful music NFT campaigns through its NFT distribution technology and suite of consulting services.

As a music NFT distribution platform, FANSI's biggest vision is to provide a limitless creative space for many music creators. It is dedicated to disrupting the traditional music industry model by using NFT technology to transform music works into NFT collectibles.

Through FANSI, music creators can sell their music in the primary and secondary markets in the form of NFT. FANSI will also provide music creators with a complete marketing and sales solution to support the commercialization of their music. Through this initiative, FANSI hopes that creators and supporters can work together to create a new community influence in the music Web3, thus leading the new trend in the industry.

As a new form of music streaming player, FANSI already has some successful cases, for example, it has released music NFT for Zhang Yusheng, Power Train, Song Yueting, Ma Niansheng, Meishu Group, new generation rappers of the big hip-hop era and other famous musicians.

MetaBoom: Web3 Music Player

MetaBoom is a Web3 music player designed with Listen to Earn token economics. By using MetaBoom, users can earn token rewards for sharing or playing music NFTs when they own them.

At the same time, MetaBoom Web3 music player is a generative NFT collection. Its main purpose is to serve as a Web3 music player to showcase one's music taste and provide the best listening experience for every music NFT holder. We can think of MetaBoom as an encrypted version of Winamp.

In addition, MetaBooms will be unique L2E tokenomics token threshold certificates in the form of NFTs. Each MetaBoom holder will become a distribution node for music NFTs and together form a community-driven decentralized music streaming service.

L2E Economic Model

As an underlying protocol, the L2E economic model aims to connect all components and creators to enable a new audio streaming ecosystem that is Web3-focused and powered by everyone around the world rather than a giant platform. the L2E model will be a key to the design of the protocol's token economics, which allows all actors to work together to support music artists, improve music discovery , widely distribute music, and increase the liquidity of music NFTs.

1. FAITH Points

FAITH is a reward point in the MetaBoom world and a currency within the platform that allows users to spend FAITH on activities on the MetaBoom platform.

FAITH is essentially an unlimited supply of in-platform points, which can be converted into MMU, the official ERC20 token of the MetaBoom platform, through a converter. the specific scenarios for the use of FAITH include the following:

1) MetaBoom's non-profit related accessories

Each MetaBoom player has its own unique appearance, as well as different kinds of accessories used to decorate MetaBoom players. Also, some accessories can improve the usefulness of MetaBoom, for example, by including more acoustic music in the playlist.

2) FAITH-MMU conversion

Besides converting to MMU, users can also use FAITH to purchase advanced FAITH-MMU converters to reduce the cooling time of conversion.

3) Support Artists

Users can support their favorite artists by sending FAITH.

4) "Tips" to Meta DJ

Meta DJ is the person who buys music NFT, which is closely related to the spread of music, so users can support Meta DJ by sending FAITH to Meta DJ.

5) Mystery Box

The mystery box will be airdropped to the enduring participants of MetaBoom ecosystem periodically, which contains various gifts. Users who get the box need to spend some FAITH to open the box.

2、MMU token

MMU is an ERC-20 token native to the MetaBoom ecosystem, which can be purchased on the market or obtained by converting FAITH in the MetaBoom ecosystem. The total supply of this token is 500,000,000 tokens.

1) Token Allocation

There is an annual allocation limit of 50,000,000 tokens. The following is the vesting schedule (lock-in period) for token holders:

A. Private Sales: 6 months cliff period, 12 months monthly vesting.

B. Team: 12-month cliff period, 24-month monthly vesting.

C、Advisor: 6 months cliff period, 18 months monthly vesting.

2) Token use cases

A、Purchase Music NFTs.

B、Purchase NFT Pass.

C、MetaBoom revenue capacity upgrade component

D、Other Web3 partners' services

E、DAO governance. MMU token holders can become DAO members and exercise their rights.

Music NFT: Perhaps the future is promising

Music NFT as a new paradigm, the core issue it involves is the redistribution of artistic value and creative revenue as well as the awakening of artistic scarcity.

From sheet music to vinyl and then to the streaming era, the absurd phenomenon of "airplay economy" where 90% of the traffic is monopolized by the top 1% of musicians has become commonplace, and even after millions of hits on albums by famous musicians, the income is hardly significant. After music became a mass consumer product, music that was forced to be "free" also lost its scarcity.

The emergence of NFT has, in a sense, changed the difficult situation that most musicians face in the streaming era. What musicians or companies need is sticky users, i.e. traffic that is truly their own. Putting the control of fans back in their own hands is probably the most correct direction at the moment. The "Fan-Power" model is a natural fit for NFT, which is why head musicians are flocking to NFT as a platform to discover their own value.

However, looking at the development of the crypto music market in recent years, we need to realize that although music sold in the form of NFT has been a big success in the market, it does not mean that NFT music has penetrated into the hearts of ordinary consumers. On the contrary, most of the NFT music buyers are heavy players in the crypto market. Even industry leaders like Audius and Royal still seem too niche for most people. Music NFT needs a breakout point out of the circle and into the public eye.

On top of that, NFT still doesn't seem to be able to solve the music copyright problem at the moment. While smart contracts have the ability to provide public agreements and terms and distribute royalties programmatically, music copyright is still an extremely complex issue that can't necessarily be solved at the root even if it is on the chain. Compliance issues may become a shackle to the track's development in the near future.

However, despite the daunting challenges of encrypting music works, practitioners have not stopped exploring the Tokenization of music. Mainstream record labels and artists are already experimenting with music on various chains and platforms.

In the future, if more ordinary consumers can participate in the NFT music market, the impact of NFT on the music industry will be even more profound, thus forcing the music industry to change. Artists have new ways to make a profit, and fans have the ability to become real investors. In the new and improving music industry, we may see artists regain control of their work and revenue streams and share them with their consumers, their fans.