Web3 music strategy in a bear market: Tips from our community
It’s been nearly 18 months since we published our first in-depth report on the state of music and Web3. Back then, commentators were pointing to artists’ million-dollar returns on NFT sales as a sign that Web3 was a surefire antidote to a variety of music-industry ills, from streaming economics to social media burnout.
Fast-forward to today, though, and things feel quite different. The broader NFT market experienced a 91% drop in trading and sweeping layoffs in 2022. Not only have floor prices for music NFTs plummeted, but labor-intensive marketing strategies that once worked in a bull market also no longer yield the same results. As crypto-native rapper and W&M contributor Black Dave tells us: “The same amount of work translates to far less return.”
No wonder morale is low. For many artists and their teams, it feels like the playbook — which had barely been written in the first place — has once again been ripped up.
How should Web3 fit into an artist’s strategy going forward? To better understand this situation, we reached out to 11 artists, managers, and builders across the W&M network to explore how they’ve shifted their strategies to reflect market fluctuations.
The bear market — a blessing or a curse?
Opinions on the bear market varied widely among the artists we interviewed. Some see the downturn as a positive filter, removing lower-quality projects and artists not committed for the long haul. However, others worry that the market is accelerating a more speculative, financialized approach and a focus on hype and shady behavior that may have previously been glossed over.
“A lot of people who were here during the bull market aren’t
here right now.
The people that are in the space right now really want to
be here — they’re ready to build for the long haul.
”
– Heno , rapper
“I think
many of the [collectors] that were here first had a much
more speculative approach than we initially thought.
As the bubble has burst, collectors have shifted their
attention back to what they see as sure bets — rather than
using it as a discovery mechanism and choosing to support a
new artist’s first drop.”
– Jamie Reddington (a.k.a. Sound of Fractures ), electronic artist
Another point of concern among our artist sources was the stark disparity in performance between projects being released through curated platforms (like Sound , Catalog , and Serenade ) and those released independently on custom sites. While a focus on onboarding buzzy artists may have been successful in building short-term hype, it has ultimately resulted in a shortage of collectors to sustain a long tail of creators seeking to use these platforms to launch their Web3 careers in 2023.
“
Folks are looking at how artists on curated platforms are
continuing to sell during down times — but
if you drop outside of these platforms, it’s not so
easy.”
– Black Dave
“
There was a lot of time and money invested in building
artist relationships and brand associations, and
not a lot of time invested on building out the consumer
experience.”
– Jamie Reddington
An ecosystem with an oversupply of artists, made overly reliant on specific platforms, and with obscure, restrictive paths to success… This may sound unnervingly familiar to anyone who has cut their teeth in the traditional music industry.
Despite these challenges, some artists remain hopeful that Web3 music will stabilize and continue to offer unique opportunities for independent artists, as blockchain technology taps into impulses underserved within the traditional music industry.
“
My hope is that there will, eventually, be some horizontal
element to Web3 — that something will happen here for
independent artists that hasn’t happened anywhere else … I
still feel hopeful about the communities that are being
built. Something is trying to emerge. You just have to look
at the technology that’s bringing it to bear.
The dozens of Telegram chats, the Discord servers
connecting a wallet — it’s all so difficult and
primitive. But people are still doing it.”
– Syd Sidney , artist
My love (for NFTs) don’t cost a thing: The rise of free mints and open editions
When talking with sources about pricing trends that have defined the bear market for Web3 music, two clear answers emerged: Free mints and open editions.
With free mints, the minter has to pay only gas fees to mint an NFT. With open editions, no limit is set on the number of NFTs that can be minted for a given drop, leading to much lower prices on average than scarcer offerings.
Everyone from DIY artists to major acts and brands like Grimes and Universal Music Group have embraced these fire-sale approaches to recouping some value for their work. In fact, according to Water & Music’s own NFT data , the number of artists and music NFT campaigns released actually nearly doubled quarter-over-quarter in fall 2022, after a near-consistent decline in activity over the previous year. The subsequent rise in the number of collectors could offer artists a tangible growth metric for promoting Web3 projects, even if prices at large are going down.
“
Many artists are pricing NFTs very low and launching open
editions because it
allows them to signal to a certain number of collectors,
which demonstrates that there’s still value to their
projects.”
– FINKEL , indie pop duo
However, concerns persist about the long-term effects of this pricing dip on artists’ careers — and the potential contradictory reversion back to Web 2.0 values of scale as the marker of success, versus the alternative values of niche community-building that have been associated with Web3.
“
Doing something affordable to get people into the space …
You get lots of followers, lots of collectors — but since
it’s on the blockchain, right now there aren’t really any
tools to utilize it.
Some people have made the argument that it could boost your
social media following. But I can get more followers by
running Facebook Ads.
”
– Jamie Reddington / Sound of Fractures
“
Pricing down in the bear market could be harmful when the
next bull comes along —
people won’t be checking whether you set your floor
price in a bull or bear market.”
– Black Dave
That said, some artists and brands remain optimistic that various formats and price points can coexist, creating an environment of expanded choice and autonomy for artists. For instance, Medallion focuses on partnering with bands like Palaye Royale and Sigur Rós offering free or low-priced NFTs that unlock more premium experiences around an artist’s work, rather than relying on NFT sales alone as a revenue stream. This approach reframes NFTs as a creative tool for fan engagement and immersive experiences — offering a different perspective for artists who are interested in Web3, but not in financial speculation.
“My priority when it comes to this is having an
environment where artists can achieve success in different
ways.
There will be artists that will take all of these different
formats and price points and stick to them — some artists
will consistently stick to 0.1ETH, some artists will launch
open editions and try to get thousands of collectors. All of
these artists should have the opportunity to find success in
their own unique ways.
”
– TK , rapper
So, what does work during the bear market?
While navigating the current Web3 market can be challenging, artists can still find success by adapting their strategies to meet the market where it’s at. We surveyed our artist sources for some tips:
Tip 1: Stay flexible with pricing — and allowlisting
Despite launching at the height of FTX’s collapse, rapper TK’s Eternal Garden project successfully sold out of 700 NFTs in just seven days.
The key? Pricing flexibility. Initially, TK had planned on pricing the Eternal Garden NFTs at 0.1 ETH each, but ultimately lowered the price to 0.07 ETH (0.05 ETH for allowlisted wallets) after surveying collectors and platforms himself. The 0.07 ETH price point was also as much a creative decision as it was a commercial one, maintaining the “7” pattern (700 NFTs and seven songs) throughout the work.
“We listened to the market, but we also listened to our
gut.
Ultimately, Eternal Garden is a very intentional, thoughtful
project, and you get what you pay for.
”
– TK
Similarly, Chad Hillard was set to launch the inaugural NFT Founders Pass of his indie label Dreams Never Die , when news broke of the collapse of Silicon Valley Bank. To combat the market turbulence, Hillard partnered with Web3 analytics platform Bello to expand his allowlist to over 30,000 wallets — which went a long way in building hype around the product during the crucial pre-launch stage.
Tip 2: Experiment with different platforms and blockchains
Artists like Heno and FINKEL found success by being open to experimentation, minting on different platforms, and exploring alternative blockchains. From the artist’s perspective, this release flexibility is one of the key value propositions of Web3 compared to the traditional music industry.
“
I don’t focus on what I can’t control. I like to mint on
different platforms, I like to try out different price
points —
I think that the whole point of Web3 is to experiment
and cross-pollinate and find new ways of doing things.”
– Heno
“
We’ve released on Solana, Lens, Polygon — we’ve been around
the metaphorical block.
We see Web3 as another opportunity for us, as artists, to
run small and large-scale experiments.
We’re experimenters at heart, in our art and in business.
”
– FINKEL
Of course, artists should always research the pros and cons of various chains and platforms before committing to a specific one. For ambitious projects with a long-term scope, it might be worth sticking to standalone L1 blockchains, to ensure maximum resilience.
Tip 3: Prioritize worldbuilding and storytelling
Successful projects like TK’s Eternal Garden and Dreams Never Die’s Founders Pass share a common thread: Strong storytelling and worldbuilding.
Eternal Garden benefited from an intricate narrative behind its music (which follows the mythical tale of an angel being cast from heaven) as well as strong visual motifs throughout. And while the story behind Dreams Never Die’s Founders Pass is slightly less poetic, it’s just as convincing — their narrative focuses on the 15 years Hillard has spent building the Dreams Never Die record label, and how the music industry has shifted in the intervening years.
As we explored in our Academy speaker series on artist teams , artists don’t need a big budget to build a compelling world. At its core, worldbuilding is about consistency in design, branding, and mission, which one can accomplish with just a few preferred channels and a commitment to direct communication with fans over the long term.
Conclusion: Is it even the right time for artists to experiment with Web3?
While the financial returns in Web3 music remain unpredictable, our interviews suggest that the bear market continues to provide artists a benefit that drew many of them to blockchain technology in the first place: The opportunity to experiment with a blank slate.
By keeping an open mind and experimenting with various platforms, pricing models, and storytelling approaches, artists and their teams can take advantage of the inherent flexibility that Web3 has to offer and chart their own path forward, leaning on uncertainty as a catalyst for new development.
“
In the traditional music industry, it can feel like there’s
a very set way of doing things — you make a teaser, you
pitch to playlists, you make four TikToks a day.
When it comes to the blockchain, it feels like you have
the freedom to be a part of how it’s defined and how
things are done.
It offers a very different experience of being a creator.
”
– Jamie Reddington / Sound of Fractures
We’ll be discussing Web3 marketing strategies and other trends in emerging tech at our inaugural Wavelengths Summit, taking place on May 6 in Brooklyn, NYC. Learn more and secure your spot here — we’d love to see you there!