Music artists worldwide are going wild for Web3 tools as they increasingly connect with their followings via the usage of collectible non-fungible tokens (NFT), virtual meet and greets, and metaversal concerts.
With the global music industry revenue reaching $26.2 billion in 2022, according to the International Federation of the Phonographic Industry’s (IFPI) ‘Global Music Report 2023’, it’s no surprise the sector and swelling virtual world have become more intertwined.
The online revolution is democratizing the music industry, as well as ushering in better royalty systems and direct relationships with fans. But as Web3 matures, the APAC region and the West have adopted different approaches, each suited to local audience interests and demands.
“One thing is clear from APAC’s bold tech exploration contrasting the West’s caution; collaboration binds artists and fans in a Web3-fueled ecosystem. This dance of change promises an inclusive future, where music and Web3 pioneer societal evolution,” Daniel Healy, Director of Muuv brand design agency and Web3 and music expert, tells Jing Daily.
Unpacking Asia’s innovative music industry
According to the Development of China’s Music Industry 2022 report, the value of China’s music industry in 2021 grew 8.54 percent year on year to reach some $54.9 billion (378.7 billion RMB). Meanwhile, Asia accounted for 22.9 percent of global music market revenue in 2022, as reported by the IFPI.
As Asia’s population becomes more tech-savvy, demand for more digitized experiences is seeping into the entertainment ecosystem. The region’s idols are scrambling to keep up with the shift.
“It isn’t just the technology industry that is exploring Web3 services. The entertainment industry across Asia is getting involved, too, as evidenced by K-pop stars like BTS launching their own hugely successful metaverse campaigns and SK Telecom starting its own K-pop metaverse project on its augmented reality app, Jump AR,” Toby Rush, CEO of Web3 startup Redeem and former Alibaba executive, tells Jing Daily.
‘King of Mandopop’ Jay Chou, for example, was one of the first artists in Asia to capitalize on the virtual revolution. The Tawainese hitmaker took his fashion label Phantaci to the metaverse in 2021 with his “Phanta Bears” NFT collection, which generated over $10 million (69 million RMB) in sales.
“Artists, designers, and entertainers can interact with holders or fans closely in the metaverse via different devices and social platforms virtually. For instance, artists can meet their fans ‘directly’ in a live metaverse interview, or a metaverse concert, by using wearable equipment. This shortens the distance created by the stage in real life.”
Since then, the icon has upped his status in Web3 through the launch of multiple metaverse spaces. The first came in 2022, when Chou turned his songs into digital collectibles that unlocked exclusive fan experiences, and the second in May this year with a Special Demo Tmall experience, where visitors could search for hidden ‘Easter Eggs’ to unlock secret soundtracks and unique postcards.
“Artists, designers, and entertainers can interact with holders or fans closely in the metaverse via different devices and social platforms virtually. For instance, artists can meet their fans ‘directly’ in a live metaverse interview, or a metaverse concert, by using wearable equipment. This shortens the distance created by the stage in real life,” Ric Chiang, co-founder of Phantaci says.
On August 9, Phantaci teamed up with commerce-centered metaverse platform Highstreet to launch ‘Fantasy Island,’ a virtual peninsula inspired by the artist’s life. Visitors can build virtual homes through its Initial Home Offering initiative, visit branded cafès, purchase phygital apparel collections, and travel back in time to rediscover the different stages of Jay Chou’s career.
For idols like Jay Chou, entering the virtual world goes beyond profit-making. It’s also an opportunity to overtake rivals.
“With the metaverse, especially through virtual reality, idols can create more personal experiences with their fans,” Travis Wu, co-founder and CEO of Highstreet, says.
Fans across Asia have welcomed the prospect of connecting with their idols – albeit in virtual form – with open arms.
“What is key in many of these examples is that they are accessible to all. They aren’t pitching these as Web3 or blockchain experiences. They are simply differentiated experiences,” Rush says.
Rush references Blackpink’s metaverse concert in 2022, hosted alongside PUBG mobile, which drew in over 46 million users, as an example of Asia’s receptiveness to such activations.
“These campaigns work because Web3 isn’t nearly as stigmatized in Asia as it is in the West, and consumers are both receptive to and excited about the benefits that this new technology can bring,” Rush says.
AI-generated Asian celebrities
Significant government support and funding has seen Asia surpass the rest of the world when it comes to Web3 innovations, including metaverse experiences, virtual human development, and artificial intelligence (AI) generated content.
Subsequently, major tech companies across the region are utilizing innovation as a tool to tap this lucrative domestic entertainment market.
An AI-generated version of Mandopop singer Stefanie Sun went viral via social sharing platform Bilibili in May this year, after tech-savvy netizens in China mimicked the singer’s voice using deep-learning methods. While Sun herself had no input on the clone, the most popular videos have amassed over one million views, sparking copyright infringement claims.
Yet, even with copyright concerns lingering, AI-generated idols continue to trend across Asia, with AI versions of Jay Chou and K-pop group Aespa also shooting to fame. There is also the virtual celebrity market. According to consulting firm Emergen Research, the global digital human avatar market was valued at $10 billion in 2020, and it is predicted to reach $528 billion by 2030.
Apoki, South Korea’s first virtual K-pop idol created by start-up company VV Entertainment in 2019, has amassed over 5 million followers on social media since her conception. The artist, who is signed to Sony Music Solutions, released her debut single West Swing in August last year, which has 9.7 million views at the time of writing.
For companies, these virtual idols pose significantly less risk than real-life celebrities as there’s much less chance they will be mired in scandal. For fans, especially Gen Z consumers, virtual idols’ appeal lies in the novelness of the stylized personalities.
Diverging approaches in the West
Western entertainment companies are yet to capitalize on these trends to the same degree. This is largely down to audiences appearing less receptive to such activations, a mindset driven by the West’s stigmatization of the metaverse.
While Travis Scott’s Fortnite metaverse performance in 2021 broke records during the height of the Web3 buzz, attracting over 45 million concurrent views, the hype has since died down.
Instead, these creators are opting to tap alternative developments like the blockchain, a Web3 solution that offers more autonomy, freedom, and monetization prospects compared to Web2.
“The low-hanging fruit is that concert tickets are no longer limited by venue size. But with a more creative approach, token memberships with exclusive invitations to virtual reality ‘Jam Sessions’ with the likes of Jay Chou can spark an entirely new musical paradigm. Peripheral in-game items can also be sold as cosmetics to allow fans to personalize their online presence with their favorite idols,”
Entertainment agency Roc Nation, owned by Jay-Z, recognized the emergence of fans looking to connect more deeply with their favorite music artists through blockchain technology. With a client base including the likes of Rihanna, Alicia Keys and Megan Thee Stallion, the company is poised for success, even in a space as nascent as Web3.
The agency’s debut Web3 project saw Roc Nation team up with phygital startup Legitimate and sportswear label Puma to embed sneakers with Legitimate’s proprietary near-field communication (NFC) chips. Scanning the chip unlocks access to exclusive, never-before-heard mixtapes.
The response to the project was generally positive, with enthusiasts championing Puma and Roc Nation for eschewing the standard NFT strategy, instead delivering a strong use-case by tapping a potent cultural movement and rewarding fans with unfettered content.
As hype in immersive metaverse experiences and NFTs continues to wane, scoping out different ways of adding value is key to the market maturing.
Like the fashion industry, dedicated accelerators designed to help fledgling talent crack Web3 and streamline the virtual ecosystem have emerged. They aim to equip music artists with toolkits to succeed in the competitive entertainment industry, as well as guide them on how to monetize their content (minus third-party service providers taking a cut).
A case in point is Mastercard, which launched its Web3 educational program for emerging musicians in January this year. The curriculum teaches artists how to build and own their brand through Web3 experiences, such as through minting NFTs, as well as inviting fans to have a seat at the table via its token-gated platform.
“Music is a universal passion, inspiring us, moving us, and bringing us together; however, it can feel impossible for budding artists to break in. With the Mastercard Artist Accelerator, we are expanding access and driving connections further with cutting-edge Web3 technology,” Raja Rajamannar, Mastercard Chief Marketing and Communications Officer, says.
Web3 learning curves ahead
Success in a space as turbulent as Web3 is no easy feat, with even the most prominent of names misfiring as the landscape develops.
Jay Chou’s 10,000 digital keys, which dropped as part of his Tmall campaign last year, ultimately failed to sell out upon release.
“The feedback from the market [China] has been somewhat lukewarm, partially because there’s no established secondary market for trading, like OpenSea,” Luxeto co-founder Cyrus Lu told Jing Daily last year.
Whereas the secondary NFT market in the West has been growing since exploding in 2021, thanks to marketplaces like OpenSea and Rarible, Asia is yet to establish a robust resale market, dampening the prospect of fruitful NFT campaigns for music artists.
Despite setbacks, the sector does hold potential. Digital collectible platforms like KLKTN have found success in connecting fans with their idols through virtual assets across Asia. The company, which raised $4 million in 2021 via seed funding, represents artists including K-pop star Kevin Woo and Japanese guitarist Miyavi. The company offers fans the chance to collect exclusive moments and content from heartthrobs through collectibles.
“The low-hanging fruit is that concert tickets are no longer limited by venue size. But with a more creative approach, token memberships with exclusive invitations to virtual reality ‘Jam Sessions’ with the likes of Jay Chou can spark an entirely new musical paradigm. Peripheral in-game items can also be sold as cosmetics to allow fans to personalize their online presence with their favorite idols,” Wu says of the opportunities available.
Rush believes that if Western companies don’t embrace these advances, they’ll eventually find themselves at a standstill.
“Embracing the potential of these protocols and assets stands to put Asia in a very competitive stance in the years to come. The West should take note, because if it doesn’t, it may find itself rushing to catch up in five or 10 years,” he says.
The new era of music and fan engagement
As the direct impact of Web3 influences the music industry’s evolution, it is set to redefine the way artists interact with fans.
“With music, we have already seen how powerful this technology can be. The metaverse not only emboldens musicians to be more creative with their performances, but also provides a more personal experience to infinitely more people, all within the safety of their recording studio,” Wu adds.
The promise of a more equitable and intimate landscape may be music to an artist’s ears, but it is only just the beginning. Executing a mutually beneficial roadmap for both fans and creators requires a lengthy process of tweaking, observing, and adapting.