Issues with the traditional music industry

Middlemen extract excessive value:

• Industry makes $57b in revenue, only ~12% goes to artists
• 68.1% of revenue earned by top 3 major record labels (Sony, Universal, Warner)
• Spotify has [~30% take-rate](https://www.makeuseof.com/how-much-spotify-pay-per-stream/#:~:text=According to Business Insider%2C Spotify,absorbed by the platform itself.); artists make only $3,300-$3,500 per 1 million streams

Inequitable access:

• 90% of streams go to top 1% of artists
• Labels have no incentive to help upstart artists market because most of their revenue is earned by popular artists
• Artists sometimes trade lifetime royalties for near-term income certainty
• Artists need record labels to underwrite them

“Music is by far the most culturally significant creative medium, and the least monetized.” – Kyle, Multicoin

Opportunity for Music NFTs

• Size: Larger TAM than fine art / JPEGs
  • Music industry generates $57b in revenue while fine art generates ~$50b
  • But there are ~10,000 estimated art collectors, and millions of music consumers (~500m pay for music streaming services)

The size of the music NFT market could surpass JPEG NFTs

• Community fandom: Emotional connections between artists and fans
  • BAYC surge not due to art, but community (brand, events, mindshare)
  • Musicians can build highly-engaged communities (think K-POP)
  • Music NFTs (or social tokens) enable a wide spectrum of utility up to artists’ imagination (e.g. irl meetups, early access, metaverse access, collaborative creation, fan shows up on music video, etc.)
  • Enable listeners to bet on artists’ careers

Music NFTs could forge stronger relationships between artists and fans, than JPEG NFTs