July 7, 2022
Web3 is attracting billions of dollars worth of investment.
Web3 is a new iteration of the world wide web that hosts decentralized apps that run on blockchain technology. Web3 advocates emphasize user privacy and ownership of data.
Prominent VC firm Andreessen Horowitz, for example, pledged a long-term and multi-billion dollar commitment to the Web3 sector in May, announcing that it had raised $4.5 billion to back Web3 startups, bringing its total crypto/web3 funds raised to over $7.6 billion.
In a blog post announcing the news, Chris Dixon, who leads a16z Crypto, wrote that the firm thinks “we are now entering the golden era of web3”.
Following Andreessen Horowitz’s announcement, Binance Labs, the venture capital and incubation arm of Binance, announced its own $500 million Web3 investment fund, supported by institutional investors like DST Global Partners, and Breyer Capital.
To put the value of Binance and a16z’s combined $5 billion into context for you, $5 billion is the sum of money MBW estimates was spent on catalog acquisitions across the entirety of 2021.
Web3 is also of course becoming increasingly intertwined with the music industry, with prominent music companies hiring Web3 specialists and investing in Web3 ventures.
With activity ramping up in the space, one question many in the music industry are asking is, what will a post Web2 world look like for music streaming services, with some even suggesting that DSPs are positioned to lead the mainstream adoption of Web3.
Indeed, as the music industry doubles down on Web3, optimism around the Web3 sector and the future possibilities within the space could be heard from a panel of Web3 experts at the Sandbox Music Summit in London last week.
During the Web3 Music Services panel discussion, Roneil Rumburg, Co-Founder and CEO of tech startup Audius, which has raised around $10 million for its blockchain-based music streaming service, defined a Web3 music service as a “set of tools for artists to use, [in order] to engage their fans and allow them to have sovereignty over that audience”.
He added: “That can mean a number of things, but primarily that the artist is able to exfiltrate their data if they choose to, and use that in different experiences, different products and different contexts.”
Con Raso, Co-Founder and MD of specialist B2B music technology firm Tuned Global, cited licensing as one of the biggest challenges for the growth of the Web3 music service sector, but also highlighted opportunities in the space for artists and rightsholders, and revealed where the company’s Web3 growth is coming from.
Raso previously told MBW in April that Tuned Global, which has powered streaming platforms worldwide, is accelerating its growth in the Web3 space, including NFTs and the metaverse
Speaking on the panel in London, Raso pointed to a growing client base in emerging markets in Africa, Southeast Asia, and South America that are using Tuned Global’s licensing and music tech expertise to power Web3 experience-enabled services.
“Often [entities in] those markets come to us wanting to put more dollars in local artists’ pocket, rather than all that money going offshore,” explained Raso. “Web3 is a really interesting way for music services to give more autonomy to the artist.”