April 5, 2022 — Community-based economies and monopolies have always existed in opposition to each other. Because of capital’s preference for monopoly, it has led to a long period of time in business where monopolies have been squeezing the living space of community-based economies. Monopolies, whether in traditional or Web2 business, have resulted in scenarios such as concentration of resources to the head, the platform taking away the benefits that belong to users and most indie artists not being able to rely on the platform to survive.
When Muverse was ready to enter the music field, it was deeply aware of the damage that monopolies, recommendation algorithms, and “free” music could cause to the income of indie artists and the innovation of music. Thankfully, Web3 has socialized and decentralized capital, allowing for a blossoming community-based economy. Muverse is clear that it wants to create a free, fairer and more appropriate business environment for indie artists by building a new community-based and nonfungible token (NFT) trust-based paradigm that will help rejuvenate indie artists in the Web3 era.
According to data from Water & Music, an organization that focuses on digital music innovation research, NFT sales in the music category were $83 million in 2021, and 70% of those sales were generated by indie artists.
So, what are indie music and indie artists? Why can indie artists create such compelling results after entering the crypto fields? It requires serious study.
1. The rise and development of indie music
The Punk movement brought indie music to the world, while the popularity of portable recording devices and the rise of indie labels led to a boom in indie music.
The punk movement gave birth to indie music
In 1975, the Sex Pistols signed to Virgin Records and boldly sealed the Queen’s mouth with a “Sex Pistols” seal on the sleeve of their album God Save the Queen. They used it to vent their anger and express their complaints against society. This was the birth of the Punk movement that would later influence the world.
The sleeve of the album God Save the Queen
The movement attracted people who felt they did not belong to society but did not seek to escape it. These people were deeply affected by the economic crisis and mass unemployment and were lulled by images of war on television. The famous slogan “There is no future” perfectly illustrated their impression of society. The Punk movement advocated the idea of technological accessibility and embraced the do-it-yourself (DIY) spirit. It inspired countless young Britons to pick up instruments and establish punk bands, DIY their own records and sell them through indie labels.
Indie music blooms in exclusive distribution channels
After the rise of indie music, bands stopped choosing major labels to reach their audience and started recording and manufacturing albums while booking their own tours. They didn’t want to compromise with the major labels and suffer oppression. They wanted to take control of their own music productions and tried to build closer relationships directly with their fans through low-cost, repetitive performances.
The indie artist’s new demands have led to the abandonment of the old path of signing to a major label, and the market needs a new business paradigm to accommodate these new demands. Rough Trade, an indie label founded by Geoff Travis in 1976, successfully established an exclusive distribution channel for indie music, The Cartel, breaking the monopoly of the major labels and greatly promoting the development of indie music.
The mutual success of indie bands Buzzcocks and Rough Trade later proved the effectiveness of exclusive distribution channels.
In 1976, indie band Buzzcocks went into the studio and spent five hours finishing the recording of an album. They then contacted a vinyl house to get the first 1,000 copies of the seven-inch vinyl printed. In January 1977, after the packaging was completed at home and stamped by their fledgling house label, New Hormones, the indie record titled Spiral Scratch was completed.
Initially, their sales plan was to take the packaged record to a local record store, Virgin, and ask them to sell it, as well as post it for sale by mail. Soon after, the indie label Rough Trade called from London and said they wanted to order a few hundred copies of Spiral Scratch and were willing to participate in the long-term distribution.
Rough Trade retail store
With the help of Rough Trade, Spiral Scratch sold out of its initial print of 1,000 copies within a month after its release. It had to be constantly reprinted and restocked with sales climbing. Eventually, it sold 16,000 copies — 16 times as many originally planned. This was a miracle at a time when there were no distribution channels and only mail orders were available. The release of Spiral Scratch became a cultural phenomenon, giving many people hope that self-produced records could break the monopoly of capital. Many were then inspired to start labels and release records.
When Rough Trade opened in 1976, there were only 12 indie labels in the United Kingdom; by the end of the seventies, there were more than 800, with most of their records distributed through The Cartel. It was through The Cartel’s exclusive distribution system that many of the UK’s indie labels were able to compete with the major labels of the 1980s, and their artists were able to enter the mainstream and become indie music legends. In some ways, therefore, The Cartel is more important to British indie music than Rough Trade itself.
In addition to the establishment of the exclusive distribution channel, Rough Trade also introduced the fifty-fifty-deal model of royalties — usually, major labels only offered a 10-20% cut — which became the standard for many indie labels and also became a symbol of the distinction between indie and major labels at that time.
In 1973, Teac Corporation introduced the first portable multi-track recording device — the Teac A-450, which made it possible to record music independently.
A Teac A-450
2、Indie artists’ tough time in the streaming era
The rise of streaming technology and the paid subscription model has also brought great changes to the music industry. However, this change has caused the original music sales methods and channels to suffer a huge impact. Capital relies on streaming platforms to achieve monopoly once again, and indie artists are therefore in a dilemma.
Dilemma under change
The launch of Napster in June 1999 made paying for music a thing of the past.
The company, loathed by the entire music industry, was ordered to stop its services by the court. Apple, its follower, offered a paid subscription service with iTunes to charge in a new form, but the seeds of free music were planted in the hearts of the new generation and could never go back in time.
Peer-to-peer music platform Napster
The record form of music has gradually changed from vinyl records and CDs to online music players. The boom in online music has led to a sharp decline in sales of physical music products, and the sales channels that used to help indie artists survive have suffered a serious impact. Despite the positive attitude of indie artists toward online music and streaming, the capital has relied on streaming platforms to achieve a new monopoly. The existence of monopolies and recommendation algorithms not only exacerbates the unfairness of income distribution but also makes a choice in the “free market,” not free. Users are constantly influenced by capital and recommendation algorithms. Because of monopolies and algorithms, resources and money will never actively flow to the long-tail market, and indie artists are no better off than before.
The following chart from the International Federation of the Phonographic Industry (IFPI) Global Music Report 2021 is a good illustration of the impact of streaming on the music industry. It reveals the fact that the global music industry has seen essentially no growth in revenue since 2001, and in the first few years of streaming’s prevalence, the overall revenue of the music industry was way down. Since 2015, streaming has grown exponentially as a percentage of music market revenue, but this growth has been built on a sharp decline in revenue from physical sales, and the overall revenue of the global music industry is still no higher than it was 20 years ago.
Source: IFPI Global Music Report 2021
According to a PayPerformers survey in 2020, 90% of all indie artists receive no remuneration or less than 1,000 euros (approximately $1,093) per year from streaming services, including very successful indie artists that have streamed more than 100,000 times. Muverse also found other evidence to support this result. In Spotify’s Streaming Announcement 2021, it stated that there are more than 8 million creators on Spotify, but only about 7,500 — or 0.1% — can earn more than $100,000 per year.
But even so, indie artists have shown a strong vitality in the Web2 era. According to the Wintel — Worldwide Independent Network’s market research project — Global Indie Market Report 2018, revenue from indie labels increased to $6.9 billion, accounting for 39.9% of the overall music industry in 2017. Indie labels are the fastest-growing sector of the global recorded music industry.
Monopoly and false markets
“We are saying the marketplace is a false creation and has very little to do with the reality of what people might want, given the options. It was born of the frustration of mainstream culture being, to our mind, boring and excluding interesting things. You had the idea that ordinary people, who were exposed to the stuff, would like it. At least, they should have a chance to make up their own minds,” said Travis, founder of Rough Trade.
In the Web2 era, all business is related to massive adoption, and the stock of whoever owns the users will perform well. The model of acquiring users, forming a monopoly, then abusing user data has been pervasive throughout the Web2 era, and streaming platforms cannot escape this logic. Although platforms may claim that their algorithms are designed to serve users better and bring a fairer chance of competition, the fact is that no one can resist the temptation of using Big Data analysis technology to figure out users’ characteristics, habits, needs and preferences from massive amounts of user data, employing it to carry out precise marketing and guide users through “smart recommendations.” The result of this model is a false market environment for everyone.
The convenience brought by streaming platforms may seem free, but in fact, most channels are controlled and monopolized, and data from any platform can be bought for a price. For better or worse, the music on the charts is becoming more homogeneous, and artists’ revenues have become more concentrated, which greatly undermines innovation. In 2013, the top 1% of artists accounted for more than three-quarters of all recorded music sales. That same year, 20% of songs on Spotify were never played — anyone can check this by using an app dedicated to playing these songs called Forgotify.
3、Muverse: An interesting commercial practice designed for indie artists
After the explosion of generative profile picture art, the NFT wave is rapidly extending to the music fields. More and more indie artists are entering the crypto space and exploring the combinability of music copyrights with NFTs. They confess that the revenue they get on NFTs is unparalleled by previous streaming platforms.
As a community-based NFT platform designed specifically for indie artists, Muverse understands the importance of artists’ control over the aesthetics and direction of music, the damage that monopolies, recommendation algorithms and “free” music can do to indie artists’ incomes and the destruction of musical innovation. While it is thankful that Web3 has socialized and decentralized capital, allowing for a blossoming community-based economy, it is also worried about the existence of the platform-oriented and centralized OpenSea. Therefore, Muverse is trying to create a free, fairer and more suitable business environment for indie artists by building a new community-based NFTs paradigm that will help rejuvenate indie artists in the Web3 era.
Building a community based on NFTs for indie artists and their fans
When Muverse first thought of making a music NFT-trading platform, it was puzzled by the question, “Why would users use this platform instead of going to OpenSea to sell their NFTs?” Eventually, it realized that indie artists were fed up with the oppression of centralized major labels and platforms. They don’t need another unicorn in Web3; they need community-based music platforms.
In fact, Muverse is not the first to try to build a community and direct sales model for artists and their fans online. The success of Bandcamp, a community-based platform for indie artists, is a good example and builds confidence.
Bandcamp, an online music platform and community, founded in 2008, has been profitable since 2012, and to date, fans have paid $897 million to artists and indie labels using the platform. Bandcamp supports artists who upload their music online for free and sell their music creations directly to fans. Artists are able to decide how they sell and price their creations. When a creation is successfully sold, the platform takes a 15% commission, which drops to 10% after an artist’s sales exceed $5,000, and pays the remaining 80-85% of proceeds directly to the indie artist or their label.
Bandcamp’s attempt has been beneficial to indie artists, and its success lies in creating a community for indie artists to interact directly with its fans online, allowing users to purchase artists’ creations directly. This model is actually a return to the music industry’s traditional business model, which is more direct and beneficial to indie artists than streaming platforms’ paid subscriptions.
Muverse agrees with this model, and it will build a community based on NFTs for indie artists and their fans, aiming to make a Web3 music platform that will eventually be operated by a decentralized autonomous organization (DAO). It will truly bring fair and substantial income and creative freedom to indie artists, one of the most creative groups in the music industry.
The Community DAO and the NFT Trust DAO
In the Web3 era, the ownership of the platform belongs to the users, and the DAO formed by the community’s users will be responsible for the proposal and decision-making of the platform’s product and overall development instead of the company. The platform and capital can’t form a new monopoly, nor can they affect the preferences and decision-making of community users through algorithms. This decentralized approach to operations is beneficial to the development of indie artists and is what Muverse aims to achieve.
There will be two types of DAOs in Muverse: the Community DAO and The NFT Trust DAO. The Community DAO is aiming to achieve the goal of building a platform governed by MU token holders, and the NFT Trust DAO is aiming to achieve the goal of gaining revenue for dispersed music NFT collectors through copyright cooperation.
Muverse has introduced a governance token, veMU, in order to allow users to exercise their right to govern the platform. But NFT collectors do not need the veMU token to join the NFT Trust. Instead, they use the NFTs they own as entrance tickets. Muverse will provide open-box governance tools for both the Community and NFT Trust DAOs.
Explore music performance scenarios in the metaverse
Almost everyone will have their own avatar in the metaverse in the future. Through the avatars, users can participate in concerts held in the metaverse more immersively, interact with their favorite artists closely or invite people “nearby” for a metaverse adventure.
Travis Scott in Fortnite
Various metaverse scenarios will greatly enrich people’s online experiences. Muverse is committed to providing a full range of Web3 services for indie artists and their fans, and the exploration of the music metaverse will be the focus of Muverse’s future development.
In addition to the scenarios and features above, Muverse will provide users with an easily accessible decentralized app that includes an online music community and music store and a way of staking for rewards. Muverse has the ambition to build the next-generation music platform through NFTs.
- Explainer: indie music, theconversation.com/explainer-indie-music-28321, visited on March 16, 2022
- MasterClass: Indie Rock Music: History and Artists of Independent Rock, bit.ly/3tkyulK, visited on March 18, 2022.
- British Broadcasting Corporation: Do it Yourself: The Story of Rough Trade, youtube.com/watch?v=Aw99tWb3W38, visited on March 15, 2022
- Wintel Worldwide Independent Market Report 2018, winformusic.org/mp-files/wintel-2018.pdf, visited on March 14, 2022.
- Ditto Music: How does Spotify’s algorithm work? Streaming hacks for musicians, bit.ly/3IbQser, visited on March 15, 2022
- IFPI: Global Music Report 2021, ifpi.org/resources, visited on Feb. 24, 2022
- Spotify Stream On Announcements, newsroom.spotify.com/2021-02-22/todays-spotify-stream-on-announcements, visited on Feb. 24, 2022.
- Blockonomist Staff: What does PFP mean? Role of NFTs in PFPs, bit.ly/3KZhtTY, visited on March 24, 2022.