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The crypto world was rocked last week by the stunning implosion of FTX — the second-largest cryptocurrency exchange. Though the ripple effect across the industry is still playing out, Coachella appears to be caught up in the collateral damage.
The festival partnered with FTX.US to sell $1.5 million worth of NFTs back in February, a couple of months before the Southern California event’s first staging since the pandemic. The collection included 10 NFT “Coachella Keys,” which granted lifetime access to the festival and VIP perks such as luxury experiences and exclusive merchandise. Many of those NFTs now appear to be stuck and inaccessible on the defunct exchange.
“Like many of you, we have been watching this news unfold online over the past few days and are shocked by the outcome,” said a Coachella staff member on the festival’s Discord server. “We do not currently have any lines of communication with the FTX team. We have assembled an internal team to come up with solutions based on the tools we have access to. Our priority is getting Coachella NFTs off of FTX, which appears to be disabled at the moment.”
Coachella did not immediately respond to requests for further information.
FTX filed for Chapter 11 bankruptcy on Friday citing a “severe liquidity crisis,” after depositors rushed to withdraw more than $6 billion in 72 hours. It is alleged that FTX and its founder Sam Bankman-Fried commingled customer deposits with its sister trading firm Alameda Research, resulting in a multi-billion dollar hole in the exchange’s balance sheet. When customers rushed to withdraw their funds, it became clear that FTX was insolvent.
The knock-on effects have been disastrous, with billions of dollars locked up and little prospect of recovery. Among those assets are several NFTs released through the FTX platform, including NFTs from Coachella and Tomorrowland.
One collector told Billboard he was able to withdraw his Coachella Key to his own wallet just days before FTX went bankrupt, but many others have not been so lucky. Anyone who kept their NFT on the FTX platform currently has no access to them.
Although few in the Web3 industry predicted a crisis on this scale, many crypto advocates have long argued that NFTs and cryptocurrencies should not be stored or held by centralized platforms such as FTX. The last update from the Coachella team — issued on Saturday (November 12) — advised users against interacting with any FTX product and recommended they sign out of all FTX accounts.
Santigold has launched a new community fan club powered by Web3, allowing her to connect directly with fans and offer exclusive content and experiences. It follows a tour cancellation in September where she told fans, “I have tried and tried, looked at what it would take from every angle, and I simply don’t have it.”
The difficult touring conditions has many artists looking for an alternative in Web3. Digital communities, unlocked through NFT access, are becoming increasingly popular for musicians seeking a deeper connection with their fans.
“I am excited about Web3 as an opportunity for artists to interact with our audiences in more honest, intimate and creative ways, while exploring new art mediums and technologies,” says Santigold. “I’m also looking forward to using this space to innovate ways to control the release of our art on our own terms.”
After claiming a free NFT pass, fans will have access to a hub of exclusive content including a sneak peak at Santigold’s upcoming music video. Fans can also submit questions for her new podcast and vote on merchandise designs.
Santigold’s ‘Fan Club’ is powered by Web3 tech company Medallion which already hosts personalized fan clubs for Tycho, Sigur Ros and Jungle. The tech is customizable so it can be integrated into an artist’s existing website and aesthetic. The onboarding process for fans is free and seamless — an example of Web 2.5 whereby the complicated crypto technology is disguised with simple and familiar interfaces.
Medallion Logo
Courtesy Photo
British band Jungle launched their Medallion fan club in September and has already used it to launch hyper-localized campaigns to support their touring activity. For example, the band onboarded 500 local fans in Mexico City ahead of a headline show. “The Jungle Fan Club has allowed us to connect with fans directly in a digital space that feels communal, interactive and collaborative,” says Jungle. “Medallion’s technology has built solutions for ideas we’ve had for years, but have never had the tools to make practical.”
Since launching, Medallion has onboarded 20,000 users to Tycho, Sigur Ros and Jungle’s communities — 95% of those had never touched crypto before. Within 24 hours of launching his Web3 fan club, Tycho tripled the number of fans in his Discord community.
“Medallion’s technology has been built with a singular goal of helping artists create more meaningful connections with their fans, both on and off the road,” says Medallion president Derek Davies. “And with the hardships facing touring artists since the onset of the pandemic, the invaluable importance for community in digital spaces has become clearer than ever.”
Web3 fan clubs are not a new phenomenon. Steve Aoki launched the Aokiverse in 2021 which offers fans token-gated access to VIP tickets and free NFT airdrops. Hard rock band Avenged Sevenfold launched the Deathbats Club which gives fans unlimited meet and greet access for life. Meanwhile, alt-rockers Portugal. The Man launched a Web3 fan club complete with its own social token $PTM.
The trend is accelerating, however, especially as new platforms are developed to create a simple, custom experience. The harsh realities of touring in a post-COVID world, coupled with the pressure to create ‘content’ for a mass audience on social media, means that digital communities could become an increasingly important way to engage with super fans.
Last year, Milana Rabkin Lewis, co-founder and CEO of the distribution company and payment platform Stem, was among those who read a series of frustrated tweets from the rapper Meek Mill. “I haven’t got paid from music, and I don’t know how much labels make off of me!” Mill wrote in a since-deleted thread. “How much have you spent on me as an artist? How much have you made off me as an artist?”
“Why can’t he know that?” Rabkin Lewis asks. The problem has frustrated her since she was an agent at United Talent Agency and saw “just how messy the whole process” of royalty accounting was. “We were working with major artists who realized they had no visibility into when they were going to get paid and how unrecouped they were,” she recalls.
Part of the reason she started Stem in 2015 was to provide artists with more transparency. Now Stem is debuting Royalty Services, which aims to distill labyrinthine Excel spreadsheets into digestible dashboards and will be available to labels outside of Stem’s distribution network. (Some of the major labels also have their own version of a dashboard, though managers say they can be tough to navigate.) Users can view summaries of overall costs, earnings and recoupment status. They can drill down into more granular data — to determine which streaming platform or track is generating the most money, for example — with a click. And the process of linking bank accounts and sending money to partners is straightforward.
“It’s easy to see which song is doing the most each month on which platform, how much you’re making, when you will recoup,” Rabkin Lewis says. Stem’s chief product officer Brendan Kao calls the new dashboard “the next step in our mission to improve financial clarity for the entire music industry” for both labels and artists.
Royalty accounting has been a source of artist frustration for about as long as there has been a music industry. “The mystique of the music business is that, though profits are huge, accounting is incomprehensible,” CBS boss Walter Yetnikoff wrote in his memoir. Another company hoping to inject more transparency into an industry known for opacity is CreateSafe, which made a Record Deal Simulator freely available online so artists can input their advance, recording and marketing costs and get a rough estimate of how many streams they need to generate to recoup their deal.
If anything, royalty accounting has only become more complicated in today’s digital environment. Artists often release more music with more partners than in the past and work with more producers. And revenue comes from multiple streaming services as well as platforms like TikTok and Twitch. “We’re also seeing this trend of the admin and the responsibility of paying people out going more downstream,” Rabkin Lewis adds. “Motown pays out Quality Control, for example, but there are so many layers of people that need to get paid after that,” from artists to producers to engineers, and “often the people downstream from the major have no software.”
Quality Control has also started using Stem’s technology, as has Fool’s Gold. Rabkin Lewis says she hopes to have 50 clients by the middle of 2023. “Stem’s software makes royalty data easy to read to the point that I actually want to log in myself to look at trends,” Quality Control co-founder Kevin “Coach K” Lee said in a statement. “With any other solution, I would wait for my team to generate a report and then wait again while they pull the important details out of a massive spreadsheet.”
Justin Blau, best known as the DJ-producer 3LAU, is the founder of Blume Music, another label that quickly signed on to use Royalty Services. “We used to hire an accounting firm,” Blaus says. “We’d send them everything, they’d send paperwork back, and then we’d send payments manually to each rightsholder.” This system was “inefficient,” Blau continues, to the point that it was “just obnoxious.”
He was quick to sign up for Stem’s new product: “A lot of artists have been waiting for this.”
Roblox is the most active platform for music in the metaverse, showcasing interactive and immersive virtual performances from artists ranging from Lil Nas X and Zara Larsson to KSI, 24KGoldn and Charli XCX. Given the current success, it is hard to believe that just three years ago, when I started working with Roblox, there was little awareness of the creative and commercial potential for artists in the metaverse. In fact, other than a few execs who knew their kids were on there playing and asking for some Robux, most music industry stakeholders hadn’t heard of Roblox at all.
When they heard the platform had over 100 million users, they were excited by the size of the audience. Roblox was also appealing as — compared to other major consumer platforms with anywhere near the same reach — it was and still is less crowded and free from traditional interruptive advertising. And yet, a few mavericks like Scott Cohen from Warner Music aside, none had yet thought about Roblox from an artist marketing or monetization perspective.
From those initial conversations in 2019, fast forward to 2022 and many artists from different genres have been able to express themselves in new, creative ways by building fun, immersive virtual concerts that have generated tens of millions of net new revenue for all parties. Major music brands like Spotify and consumer brands like Samsung and Deutsche Telekom have now also created their own persistent music worlds.
How did we get here? What are the long-term implications for the music industry? How will fans continue to deepen their engagement with their favorite artists?
How Lil Nas X Became a Lighthouse
Any time there is a new medium like the internet, then mobile, social and now the metaverse, the Music Industry initially treads lightly. Understandably so, as the whole industry is primarily based on the exploitation of rights, which are inherently complicated. So even when interest in metaverse experiences picked up speed, there were still roadblocks to overcome.
Even with the help and expertise of first movers at Sony and Adam Leber from REBEL management in launching the Lil Nas X virtual concert, it’s always hard doing things that haven’t been done before. In particular, new virtual deal structures for the industry to adopt needed to be created from scratch. There was also no “metaverse production studio” to tap to produce the virtual concert. So, with the help of Rafael Brown and Duane Stinnett, we basically had to spin up an entirely new production entity on the fly in order to get the experience built, working with many Roblox colleagues led by Morgan Tucker (now head of product), and Philippe Clavel (senior director of engineering), who managed the platform’s internal social experiences group.
The concert was a creative, technological, and commercial success that reached nearly 40 million people, but there were many points along the way where we weren’t sure we were going to land the plane: It really took a village to make it happen. It was worth the risk, as the Lil Nas X concert began to act as a lighthouse for the other labels and artists to follow. Now, music events have reached, delighted and engaged well over 100 million global fans on Roblox.
Creating Scale and Choice
Since the days of those early Roblox experiences, more and more platforms have emerged that only serve to give the music industry more choice when they want to activate music experiences and reach their fans in the metaverse. If Lil Nas X was a lighthouse, his beacon soon hit a prism that brought to light new formats. From launch parties with video driven performances to listening parties, with artists like Poppy, which were activated in existing Roblox experiences, the richness and diversity of musical experiences exploded.
The scale of the opportunity created a whole new market for metaverse studios to partner with labels, artists and brands to keep pushing the limits of creativity for these metaverse experiences. The process is now there to maintain the end quality but reduce time to market and cost of production. All parts of the music industry are now focused on innovating old ways of doing things to capitalise on the opportunities presented by the metaverse and Web3. Dubit, for example, created metaverse awards show parties for the BRITs and Grammys this year on Roblox, which were the first of their kind in the metaverse. Then, perhaps most notably, the MTV VMAs announced the inaugural best metaverse performance award, bringing virtual concerts into mainstream pop culture. Nominees included Charli XCX for her Samsung Roblox gig, Twenty One Pilots, and K-pop stars BTS for their performance in Minecraft, with BLACKPINK winning for their performance in PUBG.
Collectively, we as an industry are all building a better platform for artists to express themselves and connect with their fans, unlocking new creative and commercial opportunities that will significantly grow the overall business in the next three to five years.
Authenticity, Interactivity and Value for Players
What does all this mean for users? I mentioned earlier that metaverse platforms are relatively free of traditional interruptive advertising that has plagued mobile games, web-based content, and linear television. Will we be able to say the same after the next five years of growth? I’m optimistic. Top of mind with all activations and experiences should be authenticity to the nature of the platform; and providing interactive fun and value to players. The Logitech activation with Lizzo and Gayle was a great example of branded entertainment done right. The experience was super fun for players, featured top artists and was also able to meet the brand’s marketing objectives with close to 7 million people attending the event and engaging with Logitech products like flying “Logitech mouse” cars.
Moving forward there is going to have to be continued focus on ensuring that experiences really need to exist and are not just done to check off a metaverse activation to-do list for a brand or media company. As more professional brands and ad agencies start getting involved in metaverse projects and the builder economy around them grows, I expect the level of creativity to go up. There will also be a lot of discussion about whether an artist or brand needs a persistent experience or whether they should just build an ephemeral experience that coincides with their campaign windows. Generally, I think it will be more of the latter once the market matures.
The more we can all focus our time and energy on building a sustainable ecosystem for artists, platforms, developer studios and builders, brands, labels and publishers that provides values for all parties the more likely that the market will be able to grow and reach its full creative and commercial potential.
Exploring Web3 Connections
The metaverse represents a new platform shift that started with web to mobile and then mobile to social. The brands and media companies are paying attention to where their customers are spending time. Over the coming years, billions of dollars will move to the metaverse which is a more interactive, more immersive platform where hundreds of millions of young people are spending hours of each day hanging out and playing with their friends.
In the medium term, the size of platforms like Roblox, Fortnite, Minecraft and Meta will be hugely appealing to the music industry. As they evolve and all parties continue to creatively collaborate, the music industry will need to see not only marketing exposure from metaverse platforms but also get access to their fans and see new, repeatable revenue streams that justify their focus and investment. Many brands and artists are also already looking towards Web3 — the next iteration of the internet built on blockchain technology.
Whether it’s exploring the possibility of selling tracks as NFTs with perpetual royalties, NFT powered artist fan clubs, new streaming services that can be owned by users and artists directly, or blockchain powered contracts; Web3 offers the potential to bring major innovation to an industry that hasn’t materially changed since the birth of digital music some 20 years ago. It will hopefully create a more equitable market for artists to earn a living by directly connecting with their fans. For example, a universal blockchain wallet would be an incredibly powerful way for brands and artists to connect with their most loyal fans directly by adding value to their lives with exclusive digital rewards. Concert goers will be able to get rewarded for attending events by getting collectable NFTs that could in turn unlock virtual after party events in metaspaces powered by platforms like Vatom. We are at the very beginning of the birth of one of the most exciting and transformative marketing eras since the birth of the Internet.
Where Next?
Three years on from Lil Nas X, we are still at the beginning of building the future of music in the metaverse, and there is still massive upside ahead. For it to keep growing and realise its full market potential, platforms will need to help their music partners protect their IP, market directly to their fans, easily create compelling multimedia experiences, create sustainable new revenue streams, and have their experiences discovered by the right users.
Even more importantly, anyone building a music experience in the metaverse needs to ensure that their primary focus is always on delighting the fans. Music in the metaverse represents a fundamental shift in the way fans engage with music. Music is becoming a far more interactive, immersive and hyper social experience that also allows the fan to participate in the creative process along with their favorite artists. If a music experience isn’t authentic, fun, immersive and social, it doesn’t belong in the metaverse.
Jon Vlassopulos is an advisory board member at Dubit and the chief executive officer at Napster.
Facebook parent Meta is laying off 11,000 people, about 13% of its workforce, as it contends with faltering revenue and broader tech industry woes, CEO Mark Zuckerberg said in a letter to employees Wednesday.
The job cuts come just a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk. There have been numerous job cuts at other tech companies that hired rapidly during the pandemic.
Zuckerberg as well said that he had made the decision to hire aggressively, anticipating rapid growth even after the pandemic ended.
“Unfortunately, this did not play out the way I expected,” Zuckerberg said in a prepared statement. “Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.”
Meta, like other social media companies, enjoyed a financial boost during the pandemic lockdown era because more people stayed home and scrolled on their phones and computers. But as the lockdowns ended and people started going outside again, revenue growth began to falter.
Of particular concern to investors, Meta poured over $10 billion a year into the “metaverse” as it shifts its focus away from social media. Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.
Spooked investors have sent company shares tumbling more than 71% since the beginning of the year and the stock now trades at levels last seen in 2015.
An economic slowdown and a grim outlook for online advertising — by far Meta’s biggest revenue source — have contributed to Meta’s woes as well. This summer, Meta posted its first quarterly revenue decline in history, followed by another, bigger decline in the fall.
Some of the pain is company-specific, while some is tied to broader economic and technological forces.
Last week, Twitter laid off about half of its 7,500 employees, part of a chaotic overhaul as Musk took the helm. He tweeted that there was no choice but to cut the jobs “when the company is losing over $4M/day,” though did not provide details about the losses.
Meta and its advertisers are bracing for a potential recession. There’s also the challenge of Apple’s privacy tools, which make it more difficult for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.
Competition from TikTok is also an a growing threat as younger people flock to the video sharing app over Instagram, which Meta also owns.
“We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint,” Zuckerberg said. ”We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go.”
A hiring freeze at the company will be extended through the first quarter of 2023, Zuckerberg said. The company has also slashed its real estate footprint and he said that with so many employees working outside of the office, the company will transition to desk sharing for those that remain.
More cost cuts at Meta will be rolled out in coming months, Zuckerberg said.
Zuckerberg told employees Wednesday that they will receive an email letting them know if they are among those being let go. Access to most company systems will be cut off for people losing their jobs, he said, due to the sensitive nature of that information.
“We’re keeping email addresses active throughout the day so everyone can say farewell,” Zuckerberg said.
Former employees will receive 16 weeks of base pay, plus two additional weeks for every year with the company, Zuckerberg said. Health insurance for those employees and their families will continue for six months.
Shares of Meta Platforms Inc. jumped almost 5% before the opening bell Wednesday.
Elon Musk tweeted Sunday that Twitter will permanently suspend any account on the social media platform that impersonates another. The platform’s new owner issued the warning after some celebrities changed their Twitter display names — not their account names — and tweeted as ‘Elon Musk’ in reaction to the billionaire’s decision to offer verified accounts to all comers for $8 month as he simultaneously laid off a big chunk of the workforce.
“Going forward, any Twitter handles engaging in impersonation without clearly specifying “parody” will be permanently suspended,” Musk wrote. While Twitter previously issued warnings before suspensions, now that it is rolling out “widespread verification, there will be no warning.”
In fact, “any name change at all” would compel the temporary loss of a verified checkmark, the world’s richest man said.
Comedian Kathy Griffin had her account suspended Sunday after she switched her screen name to Musk. She told a Bloomberg reporter that she had also used his profile photo.
“I guess not ALL the content moderators were let go? Lol,” Griffin joked afterward on Mastodon, an alternative social media platform where she set up an account last week.
Actor Valerie Bertinelli had similarly appropriated Musk’s screen name — posting a series of tweets in support of Democratic candidates on Saturday before switching back to her true name. “Okey-dokey. I’ve had fun and I think I made my point,” she tweeted afterwards.
Before the stunt, Bertinelli noted the original purpose of the blue verification checkmark. It was granted free of charge to people whose identity Twitter employees had confirmed; with journalists accounting for a big portion of recipients. “It simply meant your identity was verified. Scammers would have a harder time impersonating you,” Bertinelli noted.
“That no longer applies. Good luck out there!” she added.
The $8 verified accounts are Musk’s way of democratizing the service, he claims. On Saturday, a Twitter update for iOS devices listed on Apple’s app store said users who “sign up now” for the new “Twitter Blue with verification” can get the blue check next to their names “just like the celebrities, companies and politicians you already follow.”
It said the service would first be available in the U.S., Canada, Australia, New Zealand and the U.K. However, it was not available Sunday and there was no indication when it would go live. A Twitter employ, Esther Crawford, told The Associated Press it is coming “soon but it hasn’t launched yet.”Twitter did not respond on Sunday to an email seeking comment on the verified accounts issue and Griffin’s suspension.
Musk later tweeted, “Twitter needs to become by far the most accurate source of information about the world. That’s our mission.”
If the company were to strip current verified users of blue checks — something that hasn’t happened — that could exacerbate disinformation on the platform during Tuesday’s midterm elections.
Like Griffin, some Twitter users have already begun migrating from the platform — Counter Social is another popular alternative — following layoffs that began Friday that reportedly affected about half of Twitter’s 7,500-employee workforce. They fear a breakdown of moderation and verification could create a disinformation free-for-all on what has been the internet’s main conduit for reliable communications from public agencies and other institutions.
Many companies have paused advertising on the platform out of concern it could become more unruly under Musk.
Yoel Roth, Twitter’s head of safety and integrity, sought to assuage such concerns in a tweet Friday. He said the company’s front-line content moderation staff was the group least affected by the job cuts.
Musk tweeted late Friday that there was no choice but to cut jobs “when the company is losing over $4M/day.” He did not provide details on the daily losses at Twitter and said employees who lost their jobs were offered three months’ pay as severance.
Employees braced for widespread layoffs at Twitter Friday as new owner Elon Musk overhauls the social platform. In a letter to employees obtained by multiple media outlets, the company said employees would find out by 9 a.m. PDT (noon EDT) if they had been laid off. The email did not say how many people would lose their jobs.
Some employees tweeted early Friday that they had already lost access to their work accounts. They and others tweeted messages of support using the hashtag #OneTeam. The email to staff said job reductions were “necessary to ensure the company’s success moving forward.”
Twitter’s roughly 7,500 employees have been expecting layoffs since Musk took the helm of the company. Already, the billionaire Tesla CEO has fired top executives, including CEO Parag Agrawal, on his first day as Twitter’s owner.
He also removed the company’s board of directors and installed himself as the sole board member. On Thursday night, many Twitter employees took to Twitter to express support for each other — often simply tweeting blue heart emojis to signify Twitter’s blue bird logo — and salute emojis in replies to each other.
As of Friday, Musk and Twitter had given no public notice of the coming layoffs, according to a spokesperson for California’s Employment Development Department. That’s even though the Worker Adjustment and Retraining Notification statute requires employers with at least 100 workers to disclose layoffs involving 500 or more employees, regardless of whether a company is publicly traded or privately held.
A class action lawsuit was filed Thursday in federal court in San Francisco on behalf of one employee who was laid off and three others who were locked out of their work accounts. It alleges that Twitter intends to lay off more employees and has violated the law by not providing the required notice.
The layoffs come at a tough time for social media companies, as advertisers are scaling back and newcomers — mainly TikTok — are threatening the older class of social media platforms like Twitter and Facebook.
In a tweet sent Friday while employees were learning if they’d lost their jobs, Musk blamed activists for what he described as a “massive drop in revenue” since he took over Twitter late last week. He did not say how much revenue had dropped.
Big companies including General Motors, General Mills and Audi have all paused ads on Twitter due to questions about how it will operate under Musk. Volkswagen Group said Friday it is recommending its brands, which include Skoda, Seat, Cupra, Audi, Lamborghini, Bentley, Porsche and Ducati, pause paid activities until Twitter issues revised brand safety guidelines.
Musk has tried to appease advertisers, but they remain concerned about whether content moderation will remain as stringent and whether staying on Twitter might tarnish their brands.
“Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists,” he tweeted.
Mainstream buzz around NFTs is fading, but the Web3 music space is quietly gaining momentum. Sales volume across the top 10 projects in October rose sharply for the second month running, largely driven by a high-profile drop from Warner Records’ new Web3 label and a new project featuring Linkin Park‘s Mike Shinoda.
Independent artists are also building strength, with primary sales doubling in October on Sound.xyz — the leading platform for independent drops — to a total of $200,000 according to Token Terminal. Meanwhile, last month saw a music project on the Solana blockchain enter the top 10 for the first time.
Total volume across the top 10 climbed 50% in October to reach 2,164 ETH. In dollar terms, the volume climbed 73%, hitting $3.38 million helped by the rising price of crypto. Based on analysis of sales data from 19 different NFT platforms, independent releases and secondary sales volume on OpenSea, here are the 10 biggest-selling music NFTs and collections in October 2022.
1/ Probably A LabelMonthly trading volume: 1,196.95 ETH ($1,873,226 at month-end conversion rate)Primary sales (Oct.): 499.95 ETHSecondary sales: 697 ETHDrop date: Oct. 6
Probably A Label is the new Web3 imprint from Warner Music UK. It sold 5,555 NFT access passes at the start of October, minting out in seven minutes through an exclusive drop page on OpenSea. NFT holders will shape how the label is run, collaborate on the development of a virtual artist and even share IP rights in some future projects. “This is a vehicle for us to explore new ways of working as a label,” Sebastian Simone, vp of audience and strategy at Warner, tells Billboard. “We believe Web3 allows artists to create with more freedom and connect with fans on a much deeper level.”
The label is a joint venture with Probably Nothing, an established Web3 brand founded by former restaurateur Jeremy Fall. The team is now preparing the first airdrop for holders — a free music NFT featuring production from Diddy.
View the collection on OpenSea.
2/ SAN OriginMonthly volume traded: 502 ETH ($785,630)Primary sales (Oct.): N/ASecondary sales: 502 ETHDrop date: Sept. 16
SAN Sound is a project that aims to launch a Web3 music streaming service, using a “listen-to-earn” model where holders earn crypto tokens while streaming. It exploded to the top spot in September and remained strong in October through secondary sales.
Over the last month the project has encouraged holders to ‘soulbind’ their NFT — which ties it permanently to their wallet — allowing fans to access the streaming platform. Those that bind their NFT will also be eligible for a free airdrop of governance tokens enabling them to vote on how the platform develops.
View the collection on OpenSea.
3/ Secret Garden – “Wind Chime ft. Mike Shinoda”Monthly volume traded: 153 ETH ($239,445)Primary sales (Oct.): 114 ETHSecondary sales: 39 ETHDrop date: Oct. 12
Secret Garden is a unique beat making tool built on the Ethereum blockchain. Fans can interact with it by choosing which stems (drums, bass, synths) to activate until they find a beat they like. The project had some early success through collaborations with electronic producers Robotaki and Smle, but Secret Garden launched its biggest mint yet in October with Mike Shinoda.
Shinoda joined the project as an advisor and created the music stems for the latest Wind Chime collection. It sold 2,000 NFT players and went on to generate 39 ETH in secondary sales. Secret Garden is under the umbrella of the Capsule House NFT project which is among the most successful anime profile picture (PFP) projects founded by renowned digital artist Seerlight.
View the collection on OpenSea.
4/ KINGSHIP – “Keycards”Monthly volume traded: 85 ETH ($133,025)Primary sales (Oct.): N/ASecondary sales: 85 ETHDrop date: July 15
The Bored Ape Yacht Club band remains in the top 10 for the fourth month running due to strong secondary sales on OpenSea. In October, the project teased an upcoming airdrop where holders will get a free NFT or item sent to their wallet. Producers Hitboy and James Fauntleroy are still busy in the studio preparing music for the project.
View the collection on OpenSea.
5/ BlocktonesMonthly volume traded: 49 ETH ($76,685)Primary sales (Oct.): N/ASecondary sales: 49 ETHDrop date: Sept. 16
Founded by Grammy-winning producer Gino the Ghost, Blocktones is a collection of 2,500 generative music NFTs. Each one was created using a random combination of music stems. One of the collection’s rarest NFTs, with production by Timbaland, sold for 5 ETH ($7,825) this month. The team also ran an experiment where holders could sign a non-exclusive license using their wallet to allow Blocktones to stream their NFTs on a YouTube radio channel. Holders were sent $10 back as a royalty straight to their wallet.
View the collection on OpenSea.
6/ Alan Walker & Ava Max – “Alone Pt. II”Monthly volume traded: 46.6 ETH ($72,929)Primary sales (Oct.): 35 ETHSecondary sales: ~11.6 ETHDrop date: Oct. 20
“Alone Pt. II” is among the biggest dance tracks in the world with almost 500 million streams on Spotify. Now, fans can own a small piece of the future streaming royalties. This is the third drop launched on rising platform Anotherblock.
The company typically partners with a songwriter or producer to unlock a small percentage of a song’s streaming rights. In this case, the ownership share comes from The Very Good — the publishing company behind many of Sweden’s biggest songwriters. “The Alone Pt. II” drop offered 500 editions, each granting 0.001% of future streaming royalties.
View the collection on OpenSea.
7/ Daniel Allan – “Glass House Remixes”Monthly volume traded: 35.02 ETH ($54,806)Primary sales (Oct.): 9.9 ETHSecondary sales: 25.12 ETHDrop date: Oct. 20
Independent artist Daniel Allan first appeared on this list back in July with his landmark Glass House collection. Now he returns with the remix package. Allan dropped four remixes from the Glass House EP via Sound.xyz’s new protocol — allowing him to host the drop on his own website and Sound.xyz simultaneously — making almost 10 ETH in primary sales. He also generated a flurry of secondary sales on this collection and his back catalog through October.
View the collection on OpenSea.
8/ Oshi – “U&I” and “Fight For This”Monthly volume traded: 27.84 ETH ($43,569)Primary sales (Oct.): 10.54 ETHSecondary sales: 17.3 ETHDrop date: Oct. 6
Independent artist Oshi has been at the heart of the Web3 music scene since 2020. He was also the first artist to release an NFT on Sound.xyz when it launched in 2021. In October, he dropped two new tracks, generating more than 10 ETH in primary sales. Secondary activity also picked up with around 17 ETH traded on OpenSea and Sound.xyz’s newly-launched marketplace.
View the collection on OpenSea.
9/ Kids of the Apocalypse – Noise GenesisMonthly volume traded: 1,283 SOL ($41,825)Primary sales (Oct.): Free mintSecondary sales: 1,283 SOLDrop date: Sept. 30
Kids of the Apocalypse (KOTA) is the first music project on the Solana (SOL) blockchain to make the monthly top 10. It’s an ambitious music project with a dystopian graphic-novel storyline which has been in development for several years, before Web3 was a popular concept. The 666 genesis NFTs grant holders access to the KOTA community and will act as a key for all future music drops.
The project was founded by Stefan Storm, a Swedish producer whose credits include Lady Gaga and Tiesto, and Derek Davies — the founder of Neon Gold Records. The NOISE Genesis project was free to mint but quickly generated more than 1,000 Sol in secondary trading volume.
View the collection on OpenSea.
10/ ChillrxMonthly volume traded: 21 ETH ($32,865)Primary sales (Oct.): N/ASecondary sales: 21 ETHDrop date: Sept. 16
Founded by Grammy-nominated producer Sidney Swift, Chillrx is a community record label where holders of the 10,000 NFTs get to participate in label decisions. The big goal, according to Swift, is to “win a mf-ing Grammy” as a community, via the label’s virtual artist called ChillPill. In October, Chillrx launched a new ‘staking’ feature. Holders can lock up their NFT (so that it cannot be sold). In exchange, they receive a loyalty token $CHILL which they can use to buy exclusive songs and eventually get access to other NFTs. The Chillrx floor price doubled after staking went live and more than a quarter of all NFTs are currently staked.
View the collection on OpenSea.
Methodology: The chart was compiled using data from primary music NFT sales across 19 different NFT platforms, independent releases and secondary volume data from OpenSea. Data was captured between October 1 – October 31, 2022. Conversion rates from crypto to US dollars were calculated on September 30.
Elon Musk has taken control of Twitter after a protracted legal battle and months of uncertainty. The question now is what the billionaire Tesla CEO will actually do with the social media platform.
Musk ousted three top Twitter executives on Thursday, according to two people familiar with the deal who said he was in charge. Such a shakeup was widely expected, but Musk has otherwise made contradictory statements about his vision for the company — and shared few concrete plans for how he will run it.
The people wouldn’t say if all the paperwork for the deal, originally valued at $44 billion, had been signed or if the deal had closed. A Delaware judge had ordered that the deal be finalized by Friday.
Late Thursday, Musk tweeted, “the bird has been freed,” a reference to Twitter’s logo.
Twitter’s users, advertisers and employees are parsing Musk’s every move in an effort to guess where he might take the company — but the mercurial tech executive has not made the job easy.
He has criticized Twitter’s dependence on advertisers, but made a statement Thursday that seemed aimed at soothing their fears. He has complained about restrictions on speech on the platform — but then vowed he wouldn’t let it become a “hellscape.” And for months it wasn’t even clear if he wanted to control the company at all.
After Musk signed a deal to acquire Twitter in April, he tried to back out of it, leading the company to sue him to force him to go through with the acquisition.
Friday’s deadline to close the deal was ordered by the Delaware Chancery Court in early October. The New York Stock Exchange notified investors that it will suspend trading in shares of Twitter before the opening bell Friday in anticipation of the company going private under Musk.
Musk has been signaling more recently that the deal is going through. He strolled into the company’s San Francisco headquarters Wednesday carrying a porcelain sink, changed his Twitter profile to “Chief Twit,” and tweeted “Entering Twitter HQ — let that sink in!”
The people familiar with the deal said Musk has fired CEO Parag Agrawal, CFO Ned Segal and Chief Legal Counsel Vijaya Gadde. Both people insisted on anonymity because of the sensitive nature of the deal.
Musk privately clashed with Agrawal in April, immediately before deciding to make a bid for the company, according to text messages later revealed in court filings.
Around the same time, he publicly criticized Gadde, the company’s top lawyer, in a series of tweets. A wave of harassment of Gadde from other Twitter accounts followed, including racist and misogynistic attacks, in addition to calls for Musk to get rid of her. After she was fired, the harassment on the platform began again.
In his first big move earlier on Thursday, Musk said that he is buying the platform to help humanity and doesn’t want it to become a “free-for-all hellscape.”
The message appeared to be aimed at addressing concerns among advertisers — Twitter’s chief source of revenue — that Musk’s plans to promote free speech by cutting back on moderating content will open the floodgates to more online toxicity and drive away users.
“The reason I acquired Twitter is because it is important to the future of civilization to have a common digital town square, where a wide range of beliefs can be debated in a healthy manner, without resorting to violence,” Musk wrote in an uncharacteristically long message for the Tesla CEO, who typically projects his thoughts in one-line tweets.
He continued: “There is currently great danger that social media will splinter into far right wing and far left wing echo chambers that generate more hate and divide our society.”
Musk has previously expressed distaste for advertising and Twitter’s dependence on it, suggesting more emphasis on other business models such as paid subscriptions that won’t allow big corporations to dictate policy on how social media operates. But on Thursday, he assured advertisers he wants Twitter to be “the most respected advertising platform in the world.”
The note is a shift from Musk’s position that Twitter is unfairly infringing on free speech rights by blocking misinformation or graphic content, said Pinar Yildirim, associate professor of marketing at the University of Pennsylvania’s Wharton School.
But it’s also a realization that having no content moderation is bad for business, putting Twitter at risk of losing advertisers and subscribers, she said.
“You do not want a place where consumers just simply are bombarded with things they do not want to hear about, and the platform takes no responsibility,” Yildirim said.
As concerns rise about the direction of Twitter’s content moderation, European Union Internal Market Commissioner Thierry Breton tweeted to Musk on Friday that “In Europe, the bird will fly by our rules.”
Breton and Musk met in May and appeared in a video together in which Musk said he agreed with the 27-nation bloc’s strict new online regulations. Its Digital Services Act threatens big tech companies with billions in fines if they don’t police their platforms more strictly for illegal or harmful content such as hate speech and disinformation.
Musk is expected to speak to Twitter employees directly Friday if the deal is finalized, according to an internal memo cited in several media outlets. There is internal confusion and low morale tied to fears of layoffs or a dismantling of the company’s culture and operations.
The Washington Post reported last week that Musk told prospective investors that he plans to cut three quarters of Twitter’s 7,500 workers when he becomes owner of the company. The newspaper cited documents and unnamed sources familiar with the deliberation.
Musk has spent months deriding Twitter’s “spam bots” and making sometimes conflicting pronouncements about Twitter’s problems and how to fix them.
Thursday’s note to advertisers shows a newfound emphasis on advertising revenue, especially a need for Twitter to provide more “relevant ads” — which typically means targeted ads that rely on collecting and analyzing users’ personal information.
Yildirim said that, unlike Facebook, Twitter has not been good at targeting advertising to what users want to see. Musk’s message suggests he wants to fix that, she said.
One evening in July, panic spread in a small corner of the Web3 music space. Mysteriously, $6.1 million worth of cryptocurrency began moving out of blockchain music service Audius’ company treasury into an unknown wallet. Audius was being hacked.
The hacker discovered a bug that allowed them to take control of the Audius treasury — the crypto equivalent of a shared bank account — and transfer the entire funds to their own crypto address. The bug had lived in the code for two years.
This is shaping up to be the worst-ever year for crypto hacks, according to Chainalysis, with over 125 major hacks surpassing $3 billion in total, and on track to surpass the $3.2 billion in 2021.
Meanwhile, phishing scams continue to drain NFT wallets at an alarming rate. “Everything is unbelievably insecure,” says Sam Williams, founder of blockchain storage platform Arweave and a self-proclaimed “hacker,” though he uses the term as a broad description for coders. “We’re in the hackers’ Wild West of Web3 right now.”
Since the popularity of NFTs and cryptocurrencies like Bitcoin took off in early 2021, things have only gotten worse, creating a honeypot for hackers. “There was a lot of fluff brought in during the hype cycle last year,” Williams says, “and that typically lowers security standards for a period.” Teams scrambled to push products live to capitalize on the stream of new money paying too little attention to security.
For music companies or artists entering the space, the consequence of a hack could be enormous. Audius took a $6 million financial hit but it’s more than just money. Exploits can also damage the trust of music fans and undermine the entire promise of Web3. Warner Music Group considered this dilemma when launching its Stickmen Toys NFT collection earlier this year. “No matter how much time, how many resources, or how good of intentions go into a project, if there is a security breach, it can harm the project and its team’s reputation,” says Jillian Rothman, Warner’s vp of new business & ventures, business development.
The stakes of hacking are higher in Web3 than in today’s internet because customers are at direct risk of losing their money. If there’s a malicious link in a Discord server, dozens of community members could have their NFTs or cryptocurrency stolen from their wallet. If there’s a bug in the code, users could have their funds cryptographically locked with no recourse. The community backlash from these security incidents can be severe and costly that Web3 teams often resort to refunding users out of their own pocket. So, where are the biggest risks and what can music companies do to protect themselves and their artists?
Experts say the main vulnerabilities for the NFT space lie in smart contracts. These are programs written by developers on top of blockchains like Ethereum that hold funds and execute transactions — such as paying out royalties on secondary sales. “Smart contracts are just buggy and can be exploited,” says Nic Carter — partner at Castle Island Ventures, a VC firm with several Web3 music investments. “Things are so new in the crypto space that developers are still learning the best practices for safety.”
One NFT project, for example — Aku, by former MLB player Micah Johnson — got $34 million locked in a smart contract due a small bug in the code. The money was never recovered.
One way to immediately lower the risk is operating with transparency. “It should be damn open source,” says Williams, so that anyone can check and verify the code. “There’s no point trying to hide it. Better you find [bugs] early so you can fix them.” Blockchains like Ethereum are transparent by nature so hackers will find exploits if companies go live with buggy code. Better to test it in the open on so-called test-nets before deploying with real money and high stakes. While building publicly might take away an element of surprise in terms of marketing, it’s a small price to pay for added security. Additionally, smart contracts should be audited by external developers.
Next, there’s the risk of customers getting their wallets hacked. “[Crypto wallets are] probably the No. 1 risk,” for newcomers, says Carter. “A poor wallet setup or a failure of key management — that’s probably been responsible for the greatest loss of funds.” Companies can keep the community safe by highlighting the risks and educating music fans entering the space.
Carter recommends that anyone interacting with crypto use a hardware wallet — a USB device that disconnects from your computer and the internet. And they should limit the funds on a “hot wallet,” such as Metamask, which can be easily compromised through malicious links. “The NFT space is really aggressively targeted by phishing,” he cautions. “I think because it was mainstreamed so quickly… It meant a lot of people didn’t have as much experience in [wallet] management.” He also suggests using two-factor authentication on all crypto-related accounts and advises against clicking unknown links.
The team at Warner put this into practice using a “security” page on their projects’ Discord servers. Users have to read this page before entering. It explains the best practices and warns the community how to spot scams. “In a nascent space, bad actors prey on unsuspecting community members,” says Sebastian Simone, Warner’s vp of audience & strategy. “It will take longer for Web3 to go mainstream if people have negative experiences.”
Importantly, however, the failure of wallets and smart contracts does not imply a failure of the blockchain itself. “It’s extremely rare to have the blockchain itself be hacked,” says Carter. It is the code and applications on top of the blockchains that pose the biggest security threat.
Carter and Williams are both optimistic that these security issues will decline over the coming years through standardized contracts and simpler code, but the young industry is still learning the hard way. With every new exploit, developers are learning where the vulnerabilities are and adopting safer practices for the future.
As Carter puts it, “Safety rules are written in blood.”