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Sound, a Web3 music platform, has secured $20 million in funding with the aim of empowering artists to achieve long-term financial stability in their careers.
The Series A funding round, concluded in February, was spearheaded by prominent venture capital firm Andreessen Horowitz (a16z). Notable contributors to this round included renowned rapper Snoop Dogg, accomplished artist and producer Ryan Tedder, and the Ashton Kutcher-led firm Sound Ventures, among others.
Sound aims to revolutionize the conventional revenue structures of Web2 streaming services like Spotify or Apple Music. By leveraging its platform, artists can tokenize their songs as non-fungible tokens (NFTs) and sell them directly to their fans. Since its beta launch in 2022, this innovative approach has enabled music creators to amass $5.5 million in sales revenue. Now, Sound is expanding its accessibility to the public in order to support a greater number of artists in earning sustainable incomes from their artistic endeavors.
According to David Greenstein, a co-founder of Sound and a former product manager at the streaming service Pandora, the rise of music subscription services over the last decade has brought about increased availability of songs but has also led to a decrease in artists' earnings. For instance, on platforms like Spotify, artists receive approximately $0.003 per stream.
Drawing inspiration from Radiohead, an influential English rock band, Greenstein aspires to empower listeners by allowing them to determine fair compensation for artists based on their own discretion. This initiative takes cues from Radiohead's innovative "pay what you want" revenue model, which was introduced during the release of their album "In Rainbows" in 2007.
“One of my principles is that talent is equally distributed, and opportunity is not,” said Greenstein. “It shouldn't matter where you come from, what you look like, how much money you have – if you are talented and you make music, you should be able to make a career off of being an artist.”
Greenstein elucidated that Web3 simplifies the process of direct payments for songs, enabling artists to bypass intermediaries and retain the entirety of their earnings. By leveraging Ethereum and the layer 2 scaling solution Optimism, artists can effortlessly upload their songs, mint them on the blockchain, and sell them for ETH, all without necessitating fans to create a cryptocurrency wallet. Additionally, this platform supports fiat payments, further enhancing accessibility for a wider audience.
“My philosophy has been ‘meet artists with where they're at,’” said Greenstein, discussing onboarding new creators to Web3. “Ultimately, once they get their music collected and get paid out instantly, that's the dopamine effect that goes ‘whoa, I just returned 100% of my revenue, this company didn't take anything from me, and I own the relationship with my artist with with my listeners’ - that is super, super powerful.”
Sound plans to utilize the funding to bolster its artist relations, engineering, and marketing teams, while simultaneously opening its platform to the general public. In preparation for its launch in the previous year, Sound successfully secured a $5 million seed round in December 2021, attracting notable investors such as a16z and renowned rapper 21 Savage.
Numerous artists and producers, yearning to escape the confines of traditional systems and revenue models that govern success in the music industry, have embraced Web3 as their solution. In February, the Web3 music marketplace called anotherblock revolutionized Rihanna's popular track "B**** Better Have My Money" by transforming it into a fractionalized NFT. This groundbreaking move enabled NFT holders to receive streaming royalties for the song. Following suit in April, Mastercard, a renowned credit card provider, introduced the Mastercard Music Pass—an NFT that artists could freely create to gain entry into their Web3 music accelerator program.