Currents: Live music DAOs and virtual merch

This article is a web version of our biweekly, member-exclusive digest dedicated to our editorial and database updates. We break down and connect the dots among announcements of funding rounds, acquisitions, NFT drops, and other highlights in the music/tech ecosystem that we track as part of updating our suite of databases.

The name “Currents” is in line with the eponymous, read-only channel we launched in our private Discord server last month — in which our research team curates links to news announcements that shed light on the latest music/tech trends, often tying news to ongoing community discussions in the server. If you’re not already in our Discord server, please click here to authorize the Memberful Discord bot, which should give you access.

CHANGE LOG SUMMARY

Music/tech startup investment dashboard — Since our last digest, we’ve added $19.2M in new investments to the Music Startup Rounds and Adjacent Funding Rounds tabs in this dashboard, including:

• A $2M round for Overtune
• A $500K grant for Volta XR (whom we featured in our Season 2 research)
• A $14.6M round for metaverse platform Mona
• An undisclosed round for AI tool Authentic Artistswith investments coming from Warner Music Group, Crush Ventures, and Sebastian Borget (The Sandbox co-founder)

Music/Web3 dashboard — We’ve added 50 music NFT projects and nine Web3 tools and platforms to their respective tabs in our dashboard, including:

• Eight drops on Sound for $13.3K in recorded sales.
• Six NFT startups and three Web3 tools previously missing from our dashboard, including Gemie, Releap, and the Top of the Blocks music NFT chart project.
• 42 additional NFT, PFP, and Music DAO projects that were released on various marketplaces and as a part of NFT.NYC. Here are a handful of notable examples:

In total, we saw more than $990K in new additional music NFT sales since our last digest!

Creative AI for artists — Our full creative AI tools report is now available exclusively for members. You can read those reports here (Part 1) and here (Part 2).

In the meantime, we’ve continued adding related companies and tools to the dashboard. Two notable additions include:

• Melody Sauce: A melody creation tool that assists songwriters and musicians by creating ideas from a series of inputs like genre, style, BPM, groove, and more.
• These Lyrics Do Not Exist: A web-based service that generates lyrics using a single text input prompt, a genre option, and the ability to choose how sad or happy the song is.

To suggest new tools for us to add to the database, please hop into this thread in our Discord server.

TRENDS WE’RE SEEING

In the last few weeks, we’ve identified the following emerging trends, with a special focus on live and e-commerce businesses embracing Web3 in all its forms:

More live music DAOs enter the market

Just weeks after a panel we took part in at Music Ally’s Sandbox Summit about music DAOs, we’re seeing increased activity around DAOs focused on live music. They tend to offer benefits such as voting rights to NFT or token holders around how events run, plus early access to lineups, profit shares, and priority tickets.

• This week, New York-based media company Launch Inc launched W3BSTOCK, which it’s calling the “world’s first real-life music festival entity powered by blockchain technology, owned and curated by NFT holders, and governed by a Decentralized Autonomous Organization.” W3BSTOCK will sell NFTs through a Genesis Collection that gives holders two tickets to every future event the DAO produces. NFT holders will also vote on every aspect of the events, from music and art programming to the food truck options.
• UK-based company Amplify (pictured above), co-founded by Kasabian band member Ian Matthews, launched a genesis NFT series, offering holders lifetime VIP access to their AmplifyLive series of events, and being listed as founding members of the Amplify DAO. The events claim to be “the world’s first gig that never stops paying,” using digital merchandise NFTs to raise money for a fund shared among the promoter, venue and artists post-event.

In previous digests, we’ve talked about live events like Coachella and Primavera using NFTs for all kinds of utility, from simple collectibles to VIP access, early bird tickets, and other perks. Now, we’re seeing DAOs that offer even more power to NFT holders and members. Given the importance of live music as an income source for artists in the age of streaming, plus the increase in both free and real-world utility NFTs and the widespread use of NFTs in the live sector, live music DAOs feel like the next logical step for NFT-curious artists and fanbases. As artists look to get back on their feet post-pandemic and in an uncertain economic landscape both within crypto and more broadly, fostering loyal communities around a live show or tour might be a viable option.

Read more and join the discussion:

• Revisit our Season 1.5 research report on the state of music DAOs, featuring interviews with over a dozen different music DAO leaders across record labels, independent music collectives, and more.
• Hop into this research thread in our Discord server on live music and Web3, where our events lead Diana (@dianasaur) is looking for help to curate the most interesting projects at that intersection across NFTs, social tokens, and DAOs. We’d love to hear your suggestions!

Virtual merch (or “verch”) as a new metaverse frontier

As independent acts and established companies attempt to monetize the hype around the metaverse, virtual merchandise has been the center of retail activity and PR recently — from fashion lines and restaurants, to digital collectible drops from artists and luxury brands.

• The champion of all things Web3, Snoop Dogg, filed new NFT and metaverse trademarks in late June that included “digital collectibles, downloadable virtual cannabis products, virtual cannabis, and smoking goods, virtual clothing and apparel, and digital files with images, audio, or video.” The West Coast rapper and prolific investor recently released a music video inside the customizable virtual world The Sandbox. The trademarkings also suggested the future of his newly-purchased legacy-turned-”NFT label” Death Row Records will be selling virtual clothing and virtual apparel for “entertainment purposes.”
• Facebook parent companyMetalaunched two retail-based “-verses” to coincide with the Cannes Film Festival last month, including Fender’s Stratoverse. Meta has also teamed up with fashion brands Balenciaga, Prada, and Thom Browne to launch a digital clothing store that will buy items for their avatars for use across Facebook, Instagram, and Messenger, and which will eventually open to developers to create and sell their own items.

As our collab research team rolls out the final Season 2 research on Music and the Metaverse this week, we’re looking at actionable ways the music industry can utilize this new frontier. In terms of facilitating social connection and self-expression, digital merchandise will be a significant factor in the future of metaverse-native revenue streams for music — assuming, of course, that it is something fans want.

Read more and join the discussion:

• Revisit our database of 40+ tools for engaging superfans.
• Hop into this community discussion thread on fans and fandom — it’s one of our most active threads at the moment, and we’re planning a reading group on the topic for sometime in late July!

Music NFTs offer new selling points

Since the NFT market has cooled to a 12-month low due to the declining value in Ethereum and other cryptocurrencies stalling speculative hype, we’ve noted significant expansion in more concrete value propositions under NFT purchases:

• Royalty splits: NFT marketplace anotherblock announced its first NFT drop, around electronic artists Laidback Luke and R3HAB‘s new single “Weekend on a Tuesday.” The platform, which we reported raised $3.7M earlier this year from investors including Swedish House Mafia member Steve Angello, uses Ethereum smart contracts to execute royalty payments automatically to NFT holders. The platform announced that more drops featuring major-label artists such as Ariana Grande, The Weeknd, Beyonce, Eminem, Juicy J, and Lil Wayne would soon follow.
• Creative collaboration: omgkirby (pictured above), a generative music project whose output is managed by a DAO, has created 3,000 AI-generated songs and generated 293 ETH (~$335K at the time of publication) from audio-visual NFTs, not to mention millions of plays on Spotify. NFT owners are granted full copyright and publishing rights. A recent project saw the DAO crowdsource a song from the community, voting on user-generated music until a final song was finished and uploaded to streaming platforms. Each user who took part in the voting process was granted a tokenized version of the track, and royalties from the song are accrued in a DAO treasury, used to fund community projects voted on by members.
• Fan club perks: TheTomorrowland music festivalis releasing its second of three collections next week, with a slew of perks primarily centered around early (and sometimes exclusive), access to future events and drops.

For many artists, NFTs continue to offer an alternative way of raising capital directly from fans instead of signing with a label. Royalty-bearing NFTs are, of course, not new: 3LAU’s Royal.io has been garnering attention and investment since its launch in August 2021, with the appeal that fans become invested and incentivized financially in the tracks’ successes. And as we discussed in our last digest, lower cryptocurrency prices may offer new-to-web3 fans a lower barrier to entry, cost-wise. But the shift in the crypto market’s value seems to be driving the need to add more and different utilities to all NFT products — such that utility is becoming the rule, rather than the exception.

Read more and join the discussion:

• Dive back into our Season 1 and Season 1.5 reports on music and Web3.
• Read our recent season-agnostic editorial releases, including our 2021 music NFT sales analysis, our breakdown of Songcamp’s CHAOS project and V2 of our music NFT contract template.