In 2001, Steve Jobs introduced the first generation of iTunes at the Macworld Expo. Subsequently, iTunes launched the iTunes Music Store, where users can purchase any single song at just $0.99, instead of having to purchase the entire album. iTunes changed how the music industry operates, and quickly became the world’s largest online music store.
In 2006, Spotify was born and it would go on to become the largest audio streaming service provider in the global market. In its early days, Spotify used hybrid technology to shorten buffering time. Spotify first predicted user behavior, cut one song into several parts, and then used P2P technology to optimize for on-demand listening experience. Spotify continued to optimize for user experiences and later integrated recommendation algorithms. Spotify was one of the few media companies that prioritized user experience at the time, and it grew to become the largest music streaming service in the coming years.
Facing fierce competition from Spotify, Apple launched Apple Music – a subscription-based streaming service, in 2015. According to the latest report of MIDiA Research, Spotify remains in first place with a market share of 31%, followed by Apple Music, Amazon Music and Tencent Music with market shares of 15%, 13% and 13% respectively.
Perhaps, many investors and users believe that there is no room for revolutionary innovation in the music industry anymore. A group of copyright experts who graduated from Stanford University and worked at Tencent Music, Sony Music, ByteDance, and Warner Bros. disagreed. They created Euterpe – a copyright as a service NFT platform, where musicians and creators can sell high-quality IP NFT works to fans.
The Dilemma of Streaming
Web 2 streaming applications, such as Spotify and Apple Music, have changed consumer behavior and made it easier for users to access a variety of music works. But they also face many problems.
Taylor Swift, recipient of 11 Grammy Awards, has repeatedly accused Spotifyof not upholding the integrity of copyrighted works. Even after Spotify revised its rules, it still left room for criticism because of the lack of transparency. In fact, in the music industry, numerous middlemen, lack of transparency, and complexity of copyright structure all make it quite difficult for musicians to protect their rights, and created grounds for wide-spread piracy problems. There are no efficient ways to authorize music usage, nor to pay out royalties to respective rights holders, which has become quite challenging for every stakeholder in the industry.
Top creators have the freedom to pick and choose which platforms to use, and even have enough market power to push them to change the rules. The majority of the artists have significantly less power – they are obligated to play by the rules of various middlement who help them release songs and albums. Even after a song is released, they can barely recoup the cost of production with streaming revenues. The latest Euterpe Whitepaper data shows that for each stream, Spotify and YouTube pay copyright owners $0.00397 and $0.00074, respectively.
When it comes to creating meaningful connections between fans and musicians, streaming platforms fail to offer versatile solutions. Steve Jobs once launched the social network Ping on iTunes in 2010. Creators and fans can log into Ping, create their own group of friends, follow their favorite music groups and check out the songs their friends are listening to. However, Ping was shut down after only two years because of poor product development. Today, Spotify let creators display NFTs in their profile to strengthen the connections between creators & fans.
There is no doubt that “Music + Social” will be a new opportunity, but very few platforms understand or have the incentive to invest and build in the space. That certainly created an opportunity for Web 3.
Reducing Costs and Increasing Efficiency, the NFT+B2C Model is Conducive to the Healthy Development of the Industry
Facing the problems encountered by the current streaming platforms, Euterpe chose to use blockchain technology to solve them.
Contrary to many existing NFT platforms, the underlying logic of Euterpe is to improve efficiency through B2C models, remove unnecessary middlemen, reduce costs, and increase royalties paid to copyright owners. A C2C NFT Marketplace such as Opensea would fail to improve efficiency in the music industry because they lack the expertise to navigate the complex structure of music copyrights.
Euterpe will help increase revenues for the copyright owners by reducing intermediary costs. Assuming the payout from the users remains the same, each party involved in the value chain will get allocated an increased amount of income. It is expected that copyright royalties on Euterpe is expected to be 16 times that of Spotify and 80 times that of YouTube.
Having developed a powerful network within the entertainment industry, Euterpe directly purchases IPs from copyright owners and provides users with copyright NFTs. For NFT holders, they will obtain the corresponding copyright share. For fans, Euterpe’s built-in SocialFi feature allows them to obtain Token rewards by contributing to the ecosystem. For artists, their work will gain popularity through this new form of grassroots promotion.
NFT is traceable and non-fungible, copyright owners (creators, record labels and publishers) can all verify and receive revenue in real time. When users stream the music on Euterpe, Euterpe smart contract will automatically execute the rights and obligations under the copyright license contract. Euterpe smart contracts can distribute the royalty income to the copyright owners (proportional distribution) within a few minutes, while in real life payments could be delayed for a few years.
Wu Xiangfei, a well-known lyricist who had previously created “The Road Is Always There” for Eason Chan, only received 271 yuan as royalty annually. It is believed that Euterpe can help eliminate such incidents.
Euterpe Genesis SBT Applications in Cultural & Social Scenarios
Although the NFT+B2C model makes the industry more efficient and healthy, user expectation is not quite strong. As mentioned above, “music + social” will be a new opportunity. Woody Mu, Euterpe consultant, former Chief Representative at Alibaba Entertainment US Office and Manager at Warner Bros., once said that culture is the ultimate pursuit of human beings. The social needs are the most basic needs of human beings, besides the basic physiological and safety needs.
In order to stand out Euterpe needs to adapt to current trends and address user needs. For example, Spotify successfully attracted a large number of users by focusing on providing on-demand listening while the users were transitioning from 2G to 3G network. On the contrary, Apple’s music social network Ping launched in the early days of the mobile Internet and lost traction soon because of lack of innovation.
Euterpe added SBT features on the basis of IP-NFT to better meet user needs.
SBT first appeared in an article titled “Soulbound” by ETH founder Vitalik in January 2022. In the article, Vitalik used the World of Warcraft game as an example, talking about props that cannot be transferred and traded, and thus created the concept of soul-bound NFT (SBT). In other words, SBT is a special form of NFT.
Euterpe Genesis SBT opened for registration on November 10th. Euterpe Genesis SBT holders will have priority access to IP-NFT Mystery boxes, opportunities to participate in early trials of the social platforms, exclusive content releases, and more.
Euterpe Genesis SBT minting will be divided into two phases. In the first phase, the registration is open for the top 25 NFT holders on OpenSea by trading volume, as well as Binance Account Bound (BAB) and Proof-of-Stake Pages by Vitalik Buterin (SBT). In the second phase, users can obtain Genesis SBT on Euterpe official website. According to the Euterpe team, the upcoming mystery boxes will be issued in 3 phases, and users need to hold SBT to participate in the whitelist mint & the first round of public mint.
It is possible that Euterpe opens up opportunities to mint general SBT in the future. Currently, holding a Genesis SBT is similar to owning a short “.com” domain name, and can be seen as an OG status symbol in the community.
Although Euterpe Genesis SBT cannot be traded, its features such as “display” and “priority access” play an important role in social networking. The role of SBT is not limited to the above two. In the music industry, fraudulent actions to affect chart rankings are common and streaming platforms struggle to outsmart the practices. Despite their effort users can still see low-quality albums pop up on Billboard and other charts. On Euterpe, any SBT-bound addresses linked to the fraudulent practices will be identified, thus their influence reduced.
Charles Cheng, Euterpe CFO, revealed in an interview that music IP-NFT is only the first step for Euterpe, and Euterpe will expand into other creative media including video, games, books, concerts, and celebrity merchandise, etc. Euterpe Genesis SBT represents opportunities far beyond your imagination in the future.
Some Internet users once jokingly commented that all applications eventually solve financial or social networking needs. Despite it being a joke, there’s some truth to the power of financial and social incentives.. The combination of Web 3 narrative and NFT popularity cater perfectly to these needs. It is our hope that Euterpe – the Web 3 IP NFT platform, will revolutionize the entertainment industry and create an ecosystem where both users and creators can collectively grow and prosper.