Backing Nina Protocol – the future of fan-artist relationships
by David An, Oct. 12
We are excited to announce that Greenfield is the seed round’s lead investor for Nina Protocol. Additional investors include CMT Capital, Palm Tree Crypto and Noise DAO. In this article, we explore how the music NFT protocol built on Solana acts as the foundation for a rich and dynamic ecosystem of music applications and use cases between artists and fans – in particular, new ways of direct interactions through decentralized, token-gated communities created by fans, labels, and artists.
The problem with a Web2-driven music industry
There must be some kind of way outta here – Bob Dylan
In today’s Web2 music ecosystem, most artists do not make sufficient income. This is particularly true for artists in the long tail of the spectrum. While the average American wage in 2022 is $53,490, the average working musician only earns a gross salary of $30,200 a year. The ecosystem is dominated by streaming services such as Spotify, on which only a small fraction of artists generate considerable revenues. According to Rolling Stone chart data, 90% of what’s streamed on Spotify is music from the top 1% of performers. Only 0.2% have a chance of making $50k or more a year on Spotify. In other words, out of 8 million artists on Spotify, not more than 16,000 will be able to make a living from it.
Furthermore, Web2 platforms are not efficiently catering towards “true fans”. Record labels rarely allow for direct artist-fan interaction, and streaming platforms are focused on passive listening to music only. This is a huge missed opportunity since true fans show “loyalty to a team, individual, or product.” True fans are also the fans with the highest willingness to spend through the purchase of merchandise, memorabilia, collectibles and goods. While Web2 solutions such as Bandcamp and Patreon in fact offer a strong direct fan engagement and monetization, they are highly centralized and isolated.
When it comes to new Web3 solutions, most of them focus on so-called royalty-bearing assets. NFT owners receive a share of future royalties. These can either be generated on-chain (such as streaming revenues on Web3 players) or off-chain on traditional streaming platforms. We believe that a sole emphasis on the commercial aspects of NFTs lacks product/market fit, since the primary motivation will be to use NFTs as speculative assets as opposed to creating a deeper fan-artist relationship that Nina aims at fostering.
For those about to rock, we salute you – AC/DC
While in Web2 users have profiles on platforms, with Nina users will have platforms on protocols. The implications of this are greater flexibility for users, reduced platform risk for artists, lower barriers to entry for platform developers, and a fair distribution of value that creates shared content liquidity in the underlying protocol. Currently, the protocol is composed of two primitives: Releases and Hubs.
Releases are NFT music tracks at the lowest level primitive that connect content to value. They are distributed on the blockchain and act like one-of-a-kind digital vinyls. Releases may not always guarantee financial benefits like royalty-split assets. Instead, by purchasing them, fans support and become patrons of their favorite artists. Additionally, they may provide IRL fan experiences like merchandise, tickets, special events and other monetization models that already exist or are yet to be created. Compared to Web2 models like Bandcamp or Patreon, this provides a better user experience because it can combine token-gated digital experiences with tangible fan services, like exclusive Discord channels with artists or free NFT airdrops. Currently, Nina offers 1/1 releases and limited editions. The content and metadata is stored on the permaweb (enabled by Arweave – another project backed by Greenfield) to ensure the preservation of an artist’s work over time. Accounts on Solana keep track of provenance, payment, and monetization models.
Hubs constitute the platform primitive that enables app-specific and ecosystem-wide social context used by artists, fans and curators via an on-chain social graph. They are Nina-powered pages, apps or third-party platforms that allow anyone to make collections of releases, publish new releases, write about releases, and invite collaborators to do the same. Hubs provide valuable data to artists about which communities and individuals are the most influential in disseminating their work.
Potential use cases:
- An artist can utilize a Hub as a homepage for their work.
- A listener might create playlists or blogs as Hubs.
- A record label can use a Hub for their artists’ work by using the Embeddable Player Generator
- An application developer may use Hubs as an umbrella for Releases published through their application. An example is the integration of a FutureTape’s integration of Nina releases.
- Hub operators can earn money by charging a publishing fee that collects a percentage split of every release that is published through the Hub in perpetuity. Releases reposted through the Hub may also be subject to an additional premium fee.
We believe that Nina will become the leading music NFT protocol. It will be the protocol layer that enables new forms of engagement between artists and fans, monetization, and bottom-up decentral community building by fans, labels and artists via Nina Hubs. It won’t take long for traditional record labels to adopt Web3, which allows true-fan communities to directly support their favorite artists.
The Nina Team
Video killed the radio star – The Buggles
The Nina Team, based and deeply rooted in New York City, is led by co-founders Mike Pollard, Eric Farber, John Pollard, and Jack Callahan. They perfectly combine Web3 understanding and experience in the music business. The team’s experience spans previous blockchain-related ventures, growing start-ups successfully, sourcing musicians, playing in bands, producing and releasing music, and running a record label. They are laser-focused on their mission to build the protocol that optimizes for composability across audiences, music and applications. We are very excited to be working side by side with this exceptional team as they deliver this new NFT protocol to the music industry and Solana blockchain community.