Thread by @Cooopahtroopa

Artists want to be heard.

Labels help artists reach fans.

Let's unpack a record deal and how web3 fits in. 🧵

There are three major labels in music today.

- Universal Music Group (UMG)
- Sony Music Group (SMG)
- Warner Music Group (WMG)

Labels exist to develop artists.

The mission is to grow an artist’s career by providing resources to scale.

Label services mainly consist of:

- Capital - To make records.
- Distribution - To handle admin and get plays.
- A&R - To reach platforms and mentor artists.

An artist will “sign” - or partner with - a label through a record deal.

For an artist with 1M monthly listeners and TikTok buzz, a standard record deal looks like:

- $500k budget
- 80/20 royalty split
- 3 project option
- 10-15 year window

The advance must be fully repaid before the artist starts to earn their 20%.

Every label has “priority” artists, or those who receive the most capital, time and resources.

Most signed artists are not priority artists.

This is why you tend to hear about more artists wanting out of their deal than being stoked to be in one.

Labels are not intentionally malicious.

They are a business looking to make a profit.

So - where do artists turn when the existing system is not working in their favor?

Community ownership.

https://twitter.com/Cooopahtroopa/status/1492645617889263618?s=20&t=8uuyadEzjQOqhvxpwAAKmQ

Instead of play count, web3 optimizes for superfans.

With platforms like @soundxyz_ @catalogworks @join_royal and @decentxyz - Music NFTs meet collectors.

The thesis is simple - find 25 fans willing to collect your song.

https://twitter.com/Cooopahtroopa/status/1533203100210630656?s=20&t=sp8k_mKPC5SnmgorR6LVbQ

But it's not only about web3.

Artists need to leverage Spotify for distribution and discovery.

The winning formula is somewhere in the middle - balancing web3 superfans with strong web2 distribution.

This is where web3 labels come in.

Music NFT collectors are tiny in comparison to those with a Spotify account.

I’d guess there are ~10,000 unique Music NFT collectors, compared to more than 182 million premium subscribers on Spotify.

Here’s where web3 labels develop their edge.

Web3 labels build relationships with collectors through:

- Community - Deeper social engagement
- Treasury - On-chain revenue and fund allocation.
- Governance - Proposals to incentivize contributions.

They find and retain 100 True Fans.

https://twitter.com/Cooopahtroopa/status/1479604147670319105?s=20&t=owodyg3oTUFHcB22n2473Q

Web3 labels shine through:

- Discord management
- Platform relationships
- Supply, pricing and rarity structures
- @0xSplits allocations
- Twitter Spaces
- Snapshot votes
- Live performances

Mainly in exchange for a percentage of future profit.

Leading web3 labels and collectives:

@wearehume
@dreamsnevrdie
@venicemusic
@goodkarmadao
@songcamp_
@thepark
@lnrzdao

All highlighted in the full Mirror post 🔽
coopahtroopa.mirror.xyz/kUgI_SlSOyeUFM…

If you’re a web3 artist, familiarize yourself with these players.

If you’re a collector, builder or operator, contribute to a web3 label or collective.

Everyone is in search of talent, and the experience from working on artist rollouts is invaluable.

Web3 labels have shortcomings.

- Scale - New labels need to grow.
- Experience - Few have worked with top talent.
- Copyrights - Everyone needs to be accounted for.

Challenges create opportunities to zoom in on.

https://twitter.com/Cooopahtroopa/status/1508902090785009666?s=20&t=zEdnzoEjoEhn4lP6yk0UrQ

There’s a generation of artists eager to fully own their music and to explore new distribution.

If you’re an artist, manager, collector, builder or investor in web3 - subscribe to my newsletter.

This Week in Music NFTs is free and published every Monday.
thisweekinmusicnfts.substack.com

Special thanks to @benzspeaks @ReoCragun @ljin18 @3LAU @dgreenstein1 @yoitsbrae @web3brett @RoyceEdmondz and @chadhillydilly for their feedback.

There are 50 Writing NFTs of this post available on @optimismPBC 📝

Here's to the web3 labels!
coopahtroopa.mirror.xyz/kUgI_SlSOyeUFM…