Why is one music NFT worth 1 ETH while another is worth 1 USDC?
This is a valuation question, but it is also a matter concerning the intrinsic value of music. Music appeared to lose all of its value due to piracy, but it is now obvious that consumers are willing to pay. It’s just that as listeners, we’ve become accustomed to having unlimited access to music.
This began with the MP3, but it was greatly expedited by the iPod and other MP3 players. It is this technology that has made music more portable and commodified it in our daily lives.
Between 1999 and 2008, as the record was unbundled on iTunes, music was bundled together until it was only available in one package whenever and wherever for a fixed monthly charge.
It’s a given that musicians are always concerned about money because they don’t have a steady job with a steady salary.
The Long Tail was aiming to remedy this by sharing revenues as a song or album maintained its listenership over time. That hasn’t exactly worked out, but a significant number of musicians now make a livelihood on streaming revenues.
A far bigger group, on the other hand, is unconcerned about streaming royalty rates and has been exploring new sources of cash. This began with crowdfunding, which provided one-time cash sources for musicians to release an album or go on tour.
These strategies grew into fan subscriptions, which provided artists with ongoing money streams. Furthermore, each of these strategies altered the way fans and artists engaged. If we consider Web3 methods to be another evolution of these more direct-to-audience advances, it is a means to unbundle music from the all-music-all-the-time streaming paradigm.
But how can you decide how much music is worth?
Unbundling in media and the value proposition
Music is not the same as television, but it can teach us about values when it comes to bundling and unbundling. Since the initial attempts to lawfully package music together on the internet, such a service has cost roughly $10 per month. The notion is that millions of individuals paying $120 per year would generate more money than hundreds of thousands of people paying $120 per month while the rest of the world listens to the radio and buys the occasional record per year. This isn’t a bad idea, however, the model should be reviewed.
When media is unbundled, the single piece is usually less expensive than the whole. What we notice in music is that unbundling has the opposite impact. Instead of spending $10 per month and sending peanuts to their favorite artists, fans now pay $10 or more per month for a membership. Of course, even with these strategies, it’s tough to avoid the streaming service’s package.
As an artist, you want your work to be seen by a huge number of untapped potential fans. You want variety in what you hear as a listener. Nonetheless, many fans are willing to pay for access to their favorite musicians or simply to support them in their artistic endeavors.
Determining the value of music
Part of what makes determining how to value music on Web3 so challenging is that music may be infinitely duplicated in digital form. Part of what the blockchain provides is the ability to generate editions and so scarcity.
Scarcity, though, may not be the most important factor in what makes music valuable once it’s on the blockchain.
NFTs may make music collectible again, in the same way, that vinyl or CDs are, but what the collector collects is a different story.
McKenzie Wark, a media researcher, argues in her examination of what makes art collectible:
“The artwork is now a special kind of financial instrument. The artwork is now a special kind of derivative.”
In other words, art has evolved into a financial investment tool. She goes on to add that what makes any artwork valuable nowadays is the knowledge available about it. It’s not about what it is – the thing itself – but about what people make it out to be when they talk or write about it.
“The actual work is a derivative of the value of its simulations.”
So, when we question how we can measure the worth of music, we should look at the tales people create and tell around it rather than the music itself – the digital asset or the master. And it is for this reason that community is essential in any Web3 music endeavor. A robust community has interesting tales and even more interesting ‘simulations.’
Unbundling leads to storytelling
While we unbundle music once more in Web3, we also tell new tales about what it means to own music and consequently how much it is worth. This begins with the artist and music but comes to life when they interact. There are several tales to connect with and build upon, and depending on the audience, a specific value is ascribed to the item that started the dialogue, the music.
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