Why Artists Should Care About Web3 - TOKEN2049 London 2022

hello everyone um what an exciting day in London who it took us like an hour and a half to get here so it was a lot of like pain and determination to come and speak to you um I'm going to tell you a little bit about uh music and web3 uh and our company Napster so uh the title is why Arthur should care about web3 I came from a company called Roblox um and then before that originally worked in the music business in the 90s and actually worked on Napster 20 years ago so this t-shirt is 21 years old and we lent them 50 million back in the 2000 era and then offered the music industry about a billion dollars to legitimize Napster uh didn't quite get there which is a story for drinks later but anyway and then after that companies like apple and Spotify were born but Napster kind of originally kicked off the digital music era 20 years ago so I after leaving Roblox were around music uh have joined Napster and we're looking to reinvigorate um the music industry again with the next uh next kind of Paradigm that we'll talk to you through here so the question is why artists should care about web3 so to give you a little quick snapshot we've only got a few minutes of the music industry of the last 40 years here we go so um in the Years coming up to 2000 was the era of physical media if everyone remembers CDs and then the DVD side and then up to the era of um 2000 when Napster came around that unlocked the digital era so for the last 20 years we've been in a in a digital era and the only real Innovation that's happened is uh business model where companies have gone either free offerings or paid or freemium and then length so short to long so that's really been the innovation in the last 40 years so what we're excited about now with the web 3 era is that we can finally change the business which is what we wanted to do 20 years ago with Napster Napster was really a you know a web 3 brand before web3 was even dreamed up we were all about decentralization and we were about empowering the fan empowering the artist so we feel there's a palpable moment again to genuinely innovate the greater economy starting with music and we think the blockchain actually has a very applicable use for that for that purpose so in terms of the why now you also have music artists you maybe have been reading in the Press about music artists not getting paid a lot on streaming services it's hard for them to earn a living unless they're the top level of artist and then historically artists would also make money from touring so they were kind of used streaming as a way to get marketing and reach fans and then they'll go out on tour and sell tickets and t-shirts but unfortunately now with inflation and the war and brexit all kinds of things even touring is not as possible to make money so a lot of artists are very motivated right now 20 years ago we had artists that were fighting maybe the change and the the evolution of the business but now all the artists are supportive the labels are supportive the web 3 industry has been very welcoming to Napster as we've come in um you know to the market about a month ago with our new investors so we we think the timing is right the technology is there and all the constituent stakeholders are kind of ready to support this new innovation so however I think in the last couple of years the web 3 music industry is in its infancy so um the investment which we'll see in a second in the space has been very small so a bunch of the companies that have launched so far have been really bringing a lot of innovation but have only raised maybe two million three million five million not a lot of money so as you can see lots of different companies lots of really exciting Innovation and projects but still the coin market cap is under a couple hundred million I think it's even lower after the exciting things in the last couple of days so still very very early so the exciting thing we think about Napster is that you know we're a big player we've been around for 20 years so hopefully we can help bring together a lot of these companies and uh and spearhead the new innovation so this was what I was talking about in terms of the investment in the space um as you can see I came from a gaming company and a lot of the Innovation and the investment has been around gaming so four billion last year it should be about 10 billion this year and uh little old music has only had two or three hundred million and then this year maybe even 100 million so very under invested uh space and I think the smart investors have definitely gravitated towards music and more have seen the opportunity but we feel if you think about building a new uh a new industry you need brands for consumers to bring the fans so in gaming you you can spend two to three years to build a new game or a gaming platform and then you have another two or three years to build the fan base the great thing about music is We have millions of artists who all have thousands to hundreds of thousands to millions of fans so we think music although complicated not everyone understands rights it's sort of been the overlooked sector from an investment perspective and we think can deliver a hopefully the first real consumer success story in web free um so the exciting journey I think everyone here we do interactive thing who considers themselves a music fan making sure you're still awake so the the exciting Journey that we had some of us in the audience I see here have been working in the music business for a while I did fan clubs 20 years ago 18 years ago so a lot of the things that we're talking about in web 3 have been experimented with before but we never quite got to the end of the journey so The Fan Experience that we all know is being in the audience seeing the band on stage it's amazing we shout we scream it's fantastic the the member phase you know a few of us have had if we work in the business you can be backstage you can do meet and greets you can hang out the the exciting evolution of that is now sort of digital membership and fan club so we did a lot of that at ROBLOX we did virtual meet and greets with artists glass animals were hanging around as their Avatar and you know our little uh fans on Roblox could go and hang out with the band and they would come up to like glass animals and go are you really glass animals regardless yeah we're really close animals and they would take little screenshots and share it on social media so for those fans who are spending hours a day in these Virtual Worlds it was as good and and they probably would never do it in real life anyway as meeting the band in real life because that was very real for them so the the digitization of membership where you're not physically backstage but you're sort of virtually backstage and connecting with uh artists is real and happening now and then the co-creator is something I'm very passionate about I did a remix app 12 years ago where you could have stems of songs and do versions of Kanye and Lady Gaga and like feel like you're a creator of Music we sold it to Sony um so I think the era of being a creator with your Beats or your stems or songs and being a partner singing along with your favorite band I think now can Elevate from being in the audience to actually kind of being on stage with your favorite artist proverbially and I think again web3 is a perfect ecosystem to drive all of this Innovation so if you think about I've been in the web three I was a metaverse guy for like three or four years so being in the web 3 world there's not a lot of blending between the metaverse party and the web 3 party but I would offer a metaphor where if you think about Roblox not as a you know ugc gaming platform for kids but think about it as a gaming focused L1 right so um we had a million developers building on Roblox building great experiences they were distributed all around the world and then if you think of our currency which was Robux as not just a virtual currency but as a chain-based token-based uh currency everyone in the community was using Robux to pay each other they were earning money they were spending it for advertising we were creating new jobs in the in the ecosystem and they didn't cash out so so there were International people some of them were younger they couldn't get bank accounts so I think if you have that metaphor and then it was so consumerized if anyone's bought Robux gift cards for their nieces nephews or kids that you could get it in your local boots equivalent or Walgreens so I think if you think of where web3 is going we think we have an opportunity in the music space we'll be having a token launch you know next year where we hope we can fuel a similar type of economy within the Creator space starting with music where people can start to have genuine utility for the for the token and it can encourage all this Innovation across the space which we think is very organic to uh to the Creator economy actually one more point on this one so I think the other change that's happening is the the everyone's heard too much about nfts and nfts and nfts I think the the problem up at the moment is it's been smaller number of investors paying too much money I mean they have I don't have that much money to spend on NBA top shots and three thousand dollars that's not me but a bunch of people have been using it to prospect what we really want to get to is the fans so we had again at ROBLOX millions of people buying items for two dollars three dollars five dollars they're the real fans and I think that's kind of where we need to get to away from from the investor era to this more fan era where people are actually getting utility they're earning things they're earning rewards so there was a campaign um the last couple of weeks from a company called batam Around the World Cup and it was on 250 million crisp packets and you could scan a QR code you then downloaded a wallet and you got a chance to win tickets to the World Cup so it's this type of consumerization I think it's going to start happening in 2023 from Brands advertisers media companies that's going to start to drive kind of the the quote-unquote consumer on-ramp so um again for those of you not old enough to know so that's this is a guy called Sean Fanning who started Napster work with them back in the day there are very few I've worn this t-shirt in the last month from Singapore I spoke a token out there to to New York to Miami music festivals and the amount of people who still come out from taxi drivers driving along the streets going yeah Napster man like they're still they still remember the brand it's still very iconic brand so we reached 80 million people back in the day who are now between actually 30 and 48 years old and then the younger generation we feel don't really have a brand that they can identify with so if Napster you know was that original blow up crazy counter-revolutionary decentralized brand back in the day so we're seeing we're seeing a pickup we're going to come out I was going to say confidentially with the room of a thousand people in here but look for things like the nature cat drop coming soon so we're going to play around with the Nostalgia of the old Napster working with artists and Brands so anyway we're excited about the brand this is why we think why Napster might be someone to bring the market uh to the consumers we we already have um so I think there are a lot of companies coming out on that previous slide who are brand new right they're quote unquote web free companies we're strong Believers that consumer behavior is already existing people buy tickets people stream music and it's hard when you have a highway to build things way off the highway around the corner and up the hill it's difficult to get people off the highway so we think the consumer success stories will be companies that are going to have one foot in web two if you like it no one called Web 2 before web 3 but anyway one one foot in current business with material user bases and then can kind of move that base and start to introduce new blockchain based and web free features so we have a close to nine figure current business we've been we paid over a billion dollars the music Industries we think that's a good stepping stone to kind of bring people and start introducing new features around the blockchain and offer new deals for artists that are more Equitable and then write if anyone here has had to license any kind of Rights I feel for you we all have PTSD it's not an easy thing so having a you know rights to 170 million tracks is is hard if not impossible to recreate so we think this combination is kind of why our Napster why I joined Napster and the investors are excited about the the opportunity ahead oh here is my sneak peek so anyway so this is what I was talking about I think there's some nice things um that we can do around the brand even before we roll out the features next year so Metallica was a band uh back in the day with Lars the drummer who was originally grumpy with Napster so imagine now there's a lazuric little cute drumming kitty cat um these are these are again work in progress not final designs imagine a brand contain you know with the music and an image and then if you're a OG subscriber I recommend subscribing to Napster now because you might get some cool OG Napster cats if you sign up or you're a member so I think that's really it you know we've got a minute to go so I wanted to give you a sense again of my optimism I know the last few days have been a little bit mental so we think on the consumer side I'm not a D5 guy that's another panel but in terms of consumer use cases I generally feel that we're at a palpable shift away from a 20-year cycle of Netflix's and spotifys and these sort of old incumbent brands that were really focused on kind of taking a commodity and either giving it to you for free and taking your eyeballs and monetizing it through advertising or taking your money every month and now that we have a genuine opportunity to rebuild the industry and center around creators and have that connection between the artist and the or the Creator and the fan to unlock a whole new set of creative opportunities for fans and a whole new lot of commercial opportunities for graders that can hopefully sustain themselves so I'm very excited check out Napster come out and and say hi at the event but thanks for having me well done excellent excellent excellent thanks very much John I really appreciate that what I'm also interested to know and a lot of people talk about you know the artists and the revenue that they can now generate especially on some of these nft platforms where we're looking at music as an nft through remuneration going back to the artist something in the region of about 85 as compared to what they're certainly getting on Spotify Which is less than eight percent but what I'm really interested to know from your perspective is what the fans actually get in this world whereby we have access to a million songs at the fingertips of our phone and we can stream it's a long way from when we used to have an album and we had sleeve notes and we had something tangible in a field so do you think in the future the actual fan will get something else rather than just a streaming service and the utility of that nft or that music nft will be something greater than what it is now I'd love to know what you think is from the fans perspective start the clock for another 15 minutes no yes I mean a lot of that will be coming next year and we can start to reveal but if you think about it again if you architect your business not around a format right so tick tock on that slider scale so Tick Tock is short form video free Netflix long video paid and then if you think about the audio space you've got audio books audible long paid so if you if you don't architect your business around a format you ask categy around the artist and what they want to create so imagine soon that um as an artist you can offer Collectibles yeah you can offer you can offer streams you can offer token gated video experiences token gated metaverse experiences whatever you want to offer short videos shout out videos Etc so anything will help them create so that's at the center of the experience including streaming around that you have communities so the other key thing that we had at Napster 20 years ago was Community if anyone remembers you could chat to people and you can meet people and you can meet artists in those Community all of the streaming services are like solo experiences right I call them social by Design so expect to see Community both virtual running around different meta spaces chatting to people and then I think the rewards ecosystem on top of it which will be things if I'm a fan instead of having like a rap caviar equivalent playlist at the center we want to push all that curation to the edges of the network so if you're a fan you could earn tokens and rewards for being a great playlister for being a top fan you could then redeem that for joining a artist Club you could get a collectible I love that sad night Dynamite right now it's a great band yeah um so I could get Collectibles from them the equivalent of like liners and networks they could do a virtual meet and greet so kind of however I want to have a deeper connection with the artist you'll be able to do that but in one platform with the community it's an exciting time to be a fan as we move into the web 3 space I believe because you'll be remunerated for that yeah you'll be remunerated and it's actually more fun I mean going on a streaming service it goes in your ears and you kind of tune out and do whatever you do so this will be much more of a lean forward like being at a concert where you're hanging with your friends you're connected with the artist it's much more tangible so we think people have been dramatically missing from the equation so I think bringing people back and then having this sort of ecosystem around microtransactions I worked atnc and I think that back-end Innovation was mobile carriers that offered microtransactions again a long time ago I think blockchain can offer that Innovation again where it's not just everything for 9.99 or 10.99 you can actually cherry pick things that you might like good experiences or or products um you had a picture of Blau from royal.io and I know that there was recently an album that Nas dropped where he basically tokenized the album everyone bought the nft and the plan is that as the album gets launched the revenue will go back to the nft holders I'm interested to know um what the major labels the incumbents from your old world um how on board are they with everything that's happening in in web 3 are they going to get forced to comply and to get with it or are they going to put up a fight so I think going back to the earlier Point everyone in the ecosystem at the moment is having positive wins so 20 years ago was the biggest year of the music industry so my boss was a guy from AOL Europe German guy and he was coming as the tech guy he's like you're going to die I will save you get on my train and the music business was like no thank you we're good right so at the time they were like digging in the heels I think now there's a lot more kind of humility and openness and kind of creativity happening in the music industry where they jumped into gaming and they jumped into fitness and they're kind of looking for new areas to grow the business as core streaming is starting to hit its its peak and and Trail off so um I think also the new artist deals that are happening a lot of the time the rights that would have been given to a label are now being held back by the artist so a lot of the deals we did at ROBLOX were direct with the artists and not kind of partner with the labels so that just has more power big and small that's really interesting what's happening and by the way thank you for mentioning vatam I'm actually an investor in vatam I have been for many years I know Eric and all that team over there they're really executing on that consumer level and with regards to the artist that you mentioned um how onside are artists in this web 3 world because really it comes down from the artist the ability for the artist to be on site and to give access and to be engaged what are you kind of seeing from the artist's perspective are they interested in it are they kind of stepping back or does it depend on a particular artist I think it was a media study which is a music research group recently like being famous for an artist was like number nine on the list of things they're interested in so artists I was with this time last year speaking at websummit was Zara Larsen a Swedish pop star and I think hanging out with her a lot and I think the main thing they want to do is connect with their fans and engage with their fans obviously they would also not like to have to tour you know 200 days a year or three years in a row it's it's very grueling on the body and very grueling you know mentally and on relationships so the great thing that we have with Zara she had a quote with the BBC you know last year when we're doing interviews and she was saying well now and she was selling all her virtual I items and backpacks and bags and lipsticks and all kinds of things she's going it's great I can connect with my fans you know and I'm actually making more on Roblox in six months than I'm doing the equivalent time streaming wow so it's even starting to balance out and we were talking about a world where she could have she would be performing here and there would be like a she would be mocaps and like connected with sensors so she's performing live to millions of people virtually and then performing to maybe a thousand people with the more intimate show here yeah and then collectively you could pay to have your little face appear so she's kind of reaching what so the General in you know interest of the answers is how can I connect with my fans in a deeper and more engaged way and hang out with them and when she was running around her own world on Roblox she was like a kid in the candy shop right because it was so fun and she's like can I have a Swedish lake house yeah you can have that can I have like ducks flying around you can have all that so she just you could we did 21 Pilots a share with them and the guys are some of the most creative people I've ever met if you ever get a chance to see a live show it's insane but it was almost I used to be TV produces it was almost like working on a TV show for HBO so I think artists have been limited to a three or four minute song but their brains uh working in 3D and when they can build Virtual Worlds and connect and offer things 24 7. um I think it's going to be very exciting to see what they do excellent thank you so much John big round of applause for John music is the answer thank you John