Warner Records Web3 Label Offering IP Rights To NFT Holders – Billboard
What happens when you let 5,555 music fans make decisions at a major label? Warner Records is in the process of finding new Web3 publisher Probably a Label. After selling off a collection of NFT access cards, the holders will now gather in a Discord server to help develop artists together, share the credits for any future awards like a Grammy, and ultimately offer intellectual property rights in some of the projects of NFT holders.
The experiment is a collaboration between Warner Records UK and Web3 label Probably Nothing, whose debut NFT collection made $500k in seven minutes in October. Each NFT comes with different rarity and badge roles (4000 scouts, 1500 leaders and 55 badge heads), allowing holders to vote on certain decisions. The rarest — and most expensive, currently at $2,138 — come with priority voting and access to executive dinners.
“This is a vehicle for us to explore new ways of working as a label,” says Sebastian Simone — Vice President of Audience and Strategy at Warner Records UK. For the first time at a major label level, fans will be involved in artist development, starting with the creation of a virtual artist. “[The virtual artist] will be built in conjunction with the community of holders through a voting system for design, history and other creative.”
Holders have already received a free music NFT — “Money on the Table” by Diddy and Jason Martin — but the label isn’t just focused on NFTs. It will also run traditional campaigns to help break new talent within the Web3 space. Simone envisions a future where Web3-native artists developed through the label are “selling out global tours, winning awards and crossing over into the mainstream.” There will also be crossover from the existing Warner roster where Probably a Label will act as the first point of contact for established acts to experiment with NFTs.
Warner has been an early adopter in Web3, launching the Stickmen Toys NFT project in August – an early experiment in giving IP rights to fans of a major brand. Holders of Stickmen Toys own the full rights to the music and can use it however they want. Warner Records also landed the UK’s first ever No. 1 with a chart-compatible NFT release through Muse’s Will of the People. “WMG is focused on ensuring that our artists are deeply embedded in this world of Web3 so that they not only use the technologies, but help define them,” says Oana Ruxandra, Chief Digital Officer and Executive VP, Business Development. “We put a lot of time and energy behind this burgeoning area.”
Instead of keeping everything inside the Warner machine, the label partnered with Probably Nothing – a Web3 label founded by former restaurateur and TV chef Jeremy Fall. The brand already has a community of thousands and previous experience with NFT drops, including the Probably Nothing Genesis Pass which generated 879 ETH (~$1.03 million) in volume since its launch in May 2022. The idea is to co-sign Warner’s NFT activities with an established name in Web3. “We’re in a new market to explore and learn,” says Simone. “It’s critical that we partner with people who have a deep, early-adopter understanding of new technologies and the culture.”
On paper, it’s a smart move. Many music companies and major label artists have blundered into Web3 without engaging with the existing community or taking the temperature of the market, leading to disastrous results and backlash. Collaborating with native Web3 teams seems to be a winning formula for larger enterprise entities.
For Fall, the venture allows him to delve deeper into music, which he says has always been a part of his identity. During his days as a TV chef, he hosted a “Beats for Breakfast” show with Miguel. “Every time I can be creative in a new way, I get excited. I have a vision of how I can help impact the music industry … and having Warner Records bring those ideas to life excites me the most .”
However, the label’s biggest promise of all is to “redefine IP ownership in music.” Although specific details are still unclear, Fall says “We will give IP rights to certain [label] projects, depending on how they are structured … disrupt the traditional brand model by opening the doors to shared ownership of valuable content.” The team cannot yet confirm whether this will apply to the virtual artist in development or any of the songs.
Some of this IP experimentation will also be explored in an initiative called Studio A and Studio B. “Studio A is our IP incubator,” Fall explains. “It allows our holders to pitch their existing ones [NFT-related] IP to us.” For example, if a community member owns a Doodles, Azuki, Bored Ape Yacht Club or selects other NFTs, they can provide an idea to the label based on the NFT, such as a music video, virtual artist, song or short film If accepted, a label will likely help provide resources, funding and marketing.
Studio B is more like a collective music library. Anyone with a record pass can submit tracks to Studio B, and someone else from the community can use that music in their own project, such as a film or sample for a beat. “If someone from our community wants to use one of the tracks for a project,” Fall says, “we’ll broker the communication between the holders that allows them to license it.”
Critics may question whether any of this requires NFTs at all. Supporter voting mechanisms and shared communities can be created without Web3. Fall explains: “The traditional Web2 model does not allow us to … give [fans] possibly ownership in projects. NFTs are exactly this core that gives people emotional ownership and value in projects they are a part of.” Important to note that owning an NFT does not automatically guarantee IP ownership unless explicitly stated.
In terms of providing value, the NFT label pass can be expected to increase if the label and its artists are successful, rewarding holders for their participation. However, the label will have to contend with the fact that the current price of NFT (0.03 ETH) is now worth less than half of the coin price (0.09 ETH). Anyone who bought on launch day is now underwater unless they pulled one of the 55 rarest passes. While this is not unusual for NFT projects in the current down market, it is uncharted territory for a major label that must now manage the expectations of thousands of music fans who may have lost money on paper. However, the team is not confused yet. “We are focused on providing the best experience and value to our community,” says Simone. “The rest will fall into place.”