The Digital Landscape and its Impact on Culture 2024

Summary:

  • Over the past 50 years, the internet has significantly changed the way we behave, interact and connect with the physical world.
  • As we continue to transition into an increasingly online era, new generations are growing up with something we define as ‘digital culture’ – the fact that our digital age drives our ideas, customs, and social behaviour.
  • Gaming has evolved from simple entertainment to dynamic social environments, influencing societal norms and behaviours and laying groundwork for concepts like the metaverse.
  • There is a growing trend towards participatory culture where consumers, especially younger generations, are actively involved in creating content and engaging with media in transformative ways.
  • Digital identities are becoming more crucial for self-expression and representation, especially among Gen Z who often feel more authentic online than offline.
  • Digital culture is translating to the music industry by influencing how music is created, shared, and experienced.
  • Digital business models and cultural norms in the music industry are expected to further evolve, driven by the rise of participatory models, the creator economy, and the advancement of technologies like Web3.

Introduction

Over the last 50 years, we have gone from physically pressing vinyl and manually putting up event flyers to having the entire world’s music catalogue in our pocket and artists gaining overnight success through social media. There is no doubt about it: the Internet has radically changed how we behave, interact and connect with the physical world. We unknowingly integrate new habits, tools, and perspectives into our daily lives without even knowing it. On average, we spend 40% of our waking hours online, 97% of business owners believe that ChatGPT will benefit their businesses in the future, and almost every e-commerce order is expected to be delivered within 24 hours. While some of us still used mainframes not too long ago, we now discuss AGI daily – a lot has changed over the years. 

Culture is a broad concept that encompasses the social behaviour, institutions, and norms found in human societies. The digital landscape has become so ingrained in our daily lives that it is changing culture as we know it. Some digital nomads work from different countries each week, some Gen Zs feel more like their authentic selves online than in real life, and some babies can navigate iPads before speaking their first words. As we transition into an increasingly online era, new generations are growing up with something we define as ‘digital culture’ – the fact that our digital age drives our ideas, customs, and social behaviour. Understanding digital culture will help shape the next generation and the future of music. 

In this report, we explore the relationship between digital culture and the future of music. This exploration requires recognition of the key generations shaping the digital landscape – Gen X and Y, but especially Gen Z. Gen Z, born between the mid-1990s and early 2010s, emerges as the first generation that is entirely digitally native. The impact of this digitally savvy and socially conscious generation is undeniable. They have shown that with the right tools and a collective will, it is possible to influence global conversations, drive meaningful change, and fuel phenomena such as cancel culture and social virality.

Several key trends have substantially shaped this impact when we examine digital culture and its impact on our daily lives. For Gen Z, gaming has emerged as a significant pillar, serving as both a primary pastime and a drive for their development. The virtual worlds they inhabit are not merely escapist fantasies but extensions of reality, offering deep insights into this generation’s psyche, emotions, and social dynamics. The immersion into digital gaming environments paves the way for the concept of the ‘metaverse’. 

As gaming acclimatises younger generations to the notion of expansive online universes, the future metaverse will not be a strange concept for them. Alongside this trend, the online personas they inhabit are also becoming integral to their identity, extending their self-expression and representation beyond the physical world.  

The rise of the creator economy equally represents another essential pillar of contemporary digital culture, highlighting the interconnectivity and influence facilitated by the Internet. The growth of various platforms has enabled individuals across a spectrum of interests to become influencers, creators, and entertainers. Audiences are now gravitating towards “amateur” content platforms like Twitch or YouTube over professionally produced TV. The creator economy exemplifies the shift towards a more engaged and participative digital society. 

In our modern digital society, younger generations leverage technology and social platforms to connect, organise, and effect change in ways that previous generations could not. This has translated itself into the way communities have emerged and developed. Where the Internet once prioritised the quantity and size of communities, it is now shifting towards valuing the quality and strength of relationships within them. Communities and fandom are thus becoming more niche, diverse and significantly more meaningful. 

Last, what would exploring the digital landscape and culture be without mentioning AI? For many, it has already surpassed its status as merely a tool; it has become intricately woven into everyday life, impacting everything from how we think to behave. 

Acknowledging the significance of digital culture, this report serves as a blueprint for how it will shape society and, specifically, influence the music industry in the coming years.

Gaming is a Blueprint for the Future

From the early days of arcade classics like Pac-Man to the rise of global multiplayer games such as Fortnite, gaming has shaped societal norms and behaviour and even influenced music trends.

With the metaverse—a futuristic internet space defined and connected through interactive 3D environments—in full development, gaming offers valuable insights into what we might expect from digital culture in the future. 

Gaming has evolved beyond its previous stereotypes and has become a vibrant and diverse form of entertainment enjoyed by people of all ages and backgrounds. Those involved are not just “players” anymore—they are actively shaping a new cultural landscape. This can be seen in various forms, from the rise of esports competitions filling stadiums to integrating gaming elements into mainstream media, fashion, and advertising. It has set a precedent for nurturing authentic online social interactions, digital economies, and more expressive identities. Gaming is mapping the future of digital interaction.

A compelling aspect of gaming has been the ability to mirror real-world social dynamics. The most popular games like Fortnite and Roblox generate no revenue from selling the game – they are free. Instead, they rely on the important aspects that cater to individuals’ social desires and identities to earn income. Users purchase digital accessories and clothing to enhance their status within the community, not even directly impacting gameplay. Just by catering to people’s desire for identity with digital merchandise, Fortnite has amassed billions of dollars in revenue, year after year. From avatars to virtual spaces, games empower individuals to express themselves and tailor experiences to their liking. Customisation and personalisation options play an important role in shaping future metaverses, offering extensive spaces for reflection and allowing them further to explore their identity, confidence, and self-expression.

The most compelling aspect, however, is gaming’s ability to cultivate genuine relationships. Multiplayer games serve as digital spaces where individuals from all walks of life connect, developing bonds through collaboration, competition, and shared experiences. As video games have evolved, they have normalised the idea of digital worlds as places where genuine emotions can be experienced. 

50% of gamers get highly immersed in the video game experience, generating the feeling that they are tackling real things.

These spaces extend real-world interactions, experiences, and issues despite being virtual. Gaming generates real emotions in fake worlds, and this impact should be considered when mapping the future. 

But why is this evolution so significant? Games are different from other forms of media; they have the element of interactivity that is not found anywhere else. Interactivity can provide immersion and engagement that can be used to tell stories in ways that no other medium can. As the boundaries between the real and virtual continue to blur, gaming has laid the foundations for the expansive social landscapes of metaverses. 

Gen Z is Growing up in the Metaverse

Gen Z is not only growing up with the metaverse  – it is becoming their natural habitat. This digital landscape, predominantly represented by online gaming environments and extended reality wearables, is moulding this generation’s thought processes, actions, social connections, and spending patterns. While virtual worlds and metaverses are far from attractive to other generations, our research shows that Gen Z shares an indicative set of behaviours and interactions that signal what to expect in the future. 

With 35% of Gen Z (compared to 26% of millennials) identifying as introverts, the metaverse provides them with a safe space for self-exploration and expression. Gen Z is the first generation to feel more like “themselves” in digital environments than in real life, and 36% feel more able to express their most authentic selves here. 

Gen Z now spends twice as much free time with friends in online games as in real life. This is no surprise given the abundance of touchpoints and accessibility of online environments, especially considering that 65% of Gen Z agree that their online relationships are as meaningful as real-life ones.

Online worlds are, in large part, an extension of the real world. This implies that social aspects are moving online, and the importance and value of assets are also shifting to digital. Two in five Gen Z’s value their virtual possessions as much as their real-life possessions, and currently, 15% of Gen Z’s “fun budget” is spent on metaverse transactions. Based on a study by Shopify and Ipsos, three-quarters of business leaders worldwide anticipate that engaging with customers in the metaverse will eventually become a standard practice.

Established brands and businesses like Nike, Gucci, Coca-Cola, Apple, and Disney are putting massive efforts into understanding future generations. They are actively embracing the idea that Gen Z will shape the future. Their commitment to understanding this generation is already paying off. It may not be surprising that 75% of Gen Z prioritise digital wearables from a reputable brand for their avatars. Yet, what’s remarkable is that 84% would consider wearing the same brand in the physical world, with 50% expressing a strong inclination to do so. 

According to a Business of Fashion & McKinsey survey, Nike claims the spot as Gen Z’s favourite fashion brand, with Gucci in second place. This is no coincidence; engagement with Gen Z in the metaverse is translating into the real world. 

Other industries are proving that the metaverse plays a vital role in understanding digital culture and are preparing for the future. The music industry must do the same. For younger generations growing up today, the metaverse stands to play an essential role in their interaction with music. Many of Gen Z’s first kinds of concerts, festivals, or other musical experiences will inevitably be through metaverse platforms. By targeting environments that attract younger generations early on, artists and labels meet their future audience, where they spend most of their time.
Established artists with well-resourced teams have already begun to tap into this market. In 2020, Travis Scott amassed over 12 million concurrent viewers for an immersive concert in Fortnite. As a result of the success, Epic Games, the creator of Fortnite, initiated a concert series within the game featuring artists like Ariana Grande, Lil Nas X, The Weeknd, and Anderson Paak. Every instalment of this Fortnite Soundwave Series highlights distinct interactive experiences complemented by customised digital merchandise and various virtual activities. As series like these and other events such as Facebook’s Quest concerts gain traction, the music industry should commit to understanding, embracing, and creating strategies to connect with Gen Z within the metaverse. If artists and labels want to target the next generation of music enthusiasts, they must interact and engage with them in their natural habitat, the metaverse.

This chapter is based on a report by Vice A View From Inside The Metaverse

The Increasing Importance of Digital Identities

Digital identities are not only of growing importance in the metaverse and gaming environments, but they are also increasingly relevant across the entire Internet. We have seen this trend with social media and its impact on how people portray themselves online. In many cases, social media content is misrepresentative of reality. However, digital identities tell a different story. Most Gen Z agree with older generations that they represent their most authentic selves in front of their close friends. Still, a split is beginning to emerge across younger generations. Approximately 1 in 3 Gen Z respondents asserted that their online identity represents their most authentic self, surpassing the proportions reported by Millennials (1 in 5) and Gen X respondents (1 in 10).

Our digital identities become integral to self-expression and representation as we immerse ourselves online.  
One way to represent or self-express online is through avatars. These avatars or online personas allow individuals to magnify their overall identity. A Vice study reports that 56% of Gen Z say their digital avatars represent their real identity. More than half of Gen Z respondents in a Roblox study say that styling their avatar is more important than styling themselves in the physical world, compared to 42% answering a similar question last year. This sentiment is particularly pronounced among older Gen Z individuals (ages 22-26), where 64% indicated that if they had to choose, dressing up their avatar would take precedence for them at present. The most astonishing statistic is that the vast majority (88%) believe that expressing themselves in immersive spaces has likely assisted them in comfortably expressing themselves in the physical world, facilitating authentic self-expression and fostering connections with others. This has boosted confidence and improved mental health in various aspects.

Fashion is a critical way for people to express and explore their identity, but sometimes it can be difficult in the physical world because of various barriers, stigma and stereotypes. Not that the digital world is completely free of any challenges, but it often provides a space for users and wearers to play with their identities, a place where they feel safer to be the most authentic versions of who they are. Similarly, fashion designers aren’t as restricted here by conventions of the physical realm and can experiment and play more with form, design, etc.”

–  Ben Barry Ph.D. Dean & Associate Prof. of Equity & Inclusion, School of Fashion at Parsons School of Design

Individuals use avatars and online personas to extend their personality and identity through pseudonyms. By separating physical and digital personas under the veil of pseudonyms, anonymity can provide a sense of freedom, allowing people to express aspects of their personalities that they are hesitant to reveal in the physical world. The online space acts as a canvas where individuals can experiment with different aspects of their identity. 

For many, online identities under the veil of avatars, pseudonyms, or online aliases are a way to express their most authentic selves, free from societal norms, prejudices, or preconceived notions. For others, they represent ways to extend their real-life identity to a much broader online network. In either case, our digital identities become integral to self-expression and representation.  

Music has consistently exerted a deep influence on forming our identities. Music can establish and express our identity, whether the music we embrace in our formative years or the anthems representing our life experiences. It is visible across the industry, from marginalised punk and emo communities to K-pop and hip-hop fanatics. The contemporary digital landscape provides new opportunities for self-expression and identity formulation in music. Using avatars, pseudonyms, or online aliases, anyone can freely listen to a genre without prejudice, join fan clubs without shame, or release music without worry of judgment.
Monstercat, a prominent electronic music label, has ventured into multiple community collaborations on Roblox. Being the first label to license its electronic music catalogue for incorporation into community-generated experiences on Roblox, the brand has received positive feedback and support from all around, especially from fans who are highly engaged in voting on the initiatives aiding Monstercat in building their community. In September 2023, with help from community feedback and support, Monstercat unveiled various digital items — a concept and design crafted in partnership with community creator ‘WhoseTrade’. The entire collection was sold out within minutes, with the highest sale for 1,000,001 Robux – approximately $10.000.

Beyond Influence – The Creator Economy’s Triumph

The ‘creator economy’ – a sector comprising online creatives and content-makers – has transformed into a worldwide industry encompassing over 50 million creators and serving hundreds of millions of consumers. Modern consumers increasingly gravitate towards platforms like Twitch or YouTube for “amateur” content over professionally produced TV. Live streaming platform Twitch’s peak concurrent viewership surpassed that of major cable networks like CNN as early as 2018. In September 2023, Twitch Streamer Ibai Llanos set a record with 3.44 million simultaneous viewers. Social media like X is often used as a primary news source over traditional formats like radio and TV. 

Surveys indicate a cultural shift, with more youngsters aspiring to be YouTube stars or influencers than professional athletes and astronauts. More specifically, around 33% of children in the United States aspire to be YouTubers or vloggers one day. Since YouTube boasts 2.70 billion monthly active users, accounting for 51% of all internet users, it is unsurprising that it significantly impacts the current youth generation. 

According to Goldman Sachs, the creator economy is valued at approximately $250 billion in 2023 and is expected to approach half a trillion dollars by 2027. This is, in part, due to the rise of influencers. An industry that did not exist two decades ago now commands a value of approximately $14 billion. This has given rise to a new breed of creator – the micro-influencer. These individuals boast smaller followings but constitute the bulk of influencers across popular platforms like Instagram – approximately 66% of Instagram users have between 5,000 and 15,000 followers. Many of these influencers express aspirations to transition into full-time creators.

The music industry has naturally evolved alongside the creator economy. Being an independent artist has always been challenging, but today, creators are empowered by many excellent online tools and platforms. From Splice for production, TuneCore for distribution, Soundcloud for streaming and Chartmetric for analytics, these platforms aid artists along every step of the music value chain. AI, the metaverse, and new music creation tools will further drive new dynamics for artists and fans alike. The surge in music creator tools, exemplified by companies like Native Instruments and LANDR, has garnered significant interest and investment in the past years, paving the way for innovative models and tools for casual music creators in the future. As a result, the music creator economy is evolving and gradually shifting to a more consumer-creator ecosystem. 

In line with Gen Z’s participatory culture, the music creator economy will enable fans to participate in increasingly diverse ways and create music together instead of only consuming it. This will drive creation to become the entertainment itself. 

New Participatory Culture and Engagement in a Digital World

Younger generations are taking a more participatory role in the world around them to enact change. Gen Z’s participatory nature stems from their digital nativeness, social consciousness, inclusive mindset, and desire to make meaningful contributions to society. They are adept at leveraging technology and social media to connect, organise, and effect change in new ways that previous generations could not. This participatory role has led to the growth of ‘participatory culture’. This culture starkly contrasts consumer culture as individuals function as consumers and as active and engaged contributors.

Changes in the media environment are altering our understanding of literacy and requiring new habits of mind, new ways of processing culture and interacting with the world around us. We are just beginning to identify and assess these emerging sets of social skills and cultural competencies. A participatory culture lowers the barriers to artistic and civic engagement, encouraging every voice to contribute, share, and learn from one another”
Henry Jenkins

Consumers strive to transition from mere observers to engaged participants in today’s digital environment. Brands, businesses, and artists must give consumers a voice, offer a tangible role in the process, and learn from their involvement. 

Younger generations today demand more from the brands around them—both from the ones they adore and the ones they despise. They seek more personal involvement and an extended role in the products or services they consume beyond mere transactions.

In the Sociology of Business, Ana Andjelic writes:

We don’t want to work with the Yeezys of the world, we want to work with the community and bring out the next-generation Yeezys of the world”.

Nike’s emphasis on participatory brand models tailored for the digital era underscores the brand’s ongoing evolution. In the age of social media, the significance of communities for brands is continuously increasing. Over the past two decades, Nike has pioneered leveraging the Internet, social platforms, and emerging technologies to strengthen its bond with consumers. Embracing digital ownership and participatory frameworks has provided a means to co-create and enhance the collaborative process with consumers, rendering it more personalised and captivating while rewarding the community’s engagement. 

In late 2022, Nike introduced .SWOOSH, a Web3-powered platform described by Nike as a space “dedicated to athletes and the future of sports, fostering an inclusive digital community and providing a platform for Nike’s virtual innovations.” Since its creation, Nike has actively participated in community curation events and participatory competitions and has even pioneered new types of ‘co-creation’ agreements for community members. These agreements offer them a portion of the profits for their valuable contributions. Their platform also strongly emphasises virtual items that can be used in metaverse worlds but are linked with real-world utility.

Source: https://www.dematerialzd.xyz/p/just-do-it-how-nikes-industry-leading

Assessing Nike’s efforts to boost engagement and collaborate with their community, it is safe to say they have succeeded. In the past two years, Nike’s leading three Web3 initiatives garnered roughly 1.45 billion social engagements, nearly matching the level of engagement with the Nike brand itself. These initiatives received around 800,000 social mentions, approximately 6.5 times higher than Nike’s total mentions during the same timeframe.

The Swoosh participatory model and platform are not merely competing in a sales contest against Adidas and other apparel giants. Instead, it is vying for cultural significance alongside esports brands and upcoming digital fashion houses, many of which are gaining traction within Gen Z and gaming communities. Unlike conventional brands viewing Web3 solely as a technological advancement, Nike recognises that technology is just one element of a broader phenomenon: a new cultural shift.

Gen Z’s desire for inclusivity, collaboration and meaningful contributions makes cultivating genuine two-way engagement more relevant than ever. Music is no different. Like what happens with brands, younger generations increasingly appreciate a deeper connection with the artists they love. Traditional fan engagement is passive, with fans acting merely as observers, listeners, or consumers, contributing little to no input. On the other hand, active engagement elevates fans to a more participatory and intimate role in the creative process, enabling more profound connections between artist and fan. 

Daniel Allan and Reo Cragun are artists pioneering interactive and immersive experiences to engage their fans. In 2022, they introduced a limited digital release of their 8-track project, “Criteria,” through a virtual live experience. This event, which blended dynamic audio and visual elements within a VR environment, eventually resulted in their biggest sale.

As the world shifts towards more active engagement, artists and labels that focus their community on shape and quality above size and quantity are more prepared to embrace the next wave of culture-defining music enthusiasts.

Thriving Online Communities – A Migration from Traditional Social Media

Humans need community. And that need is, more than ever, being fulfilled by thriving online communities. Historically restricted by geography, people now find more groups of peers with similar interests and hobbies online than in real life. Social media was a significant first step, but contemporary, thriving online communities go beyond social media. Social media often fosters a one-way relationship and does not provide the right environment for genuine community building. This is amplified through social media’s volume game – likes and shares are the metrics of ‘engagement’. A creator often broadcasts to an audience rather than building a community. This is like speaking on stage to a crowd; we all communicate in a more controlled, censored, and scripted manner. Communication flows more openly and authentically within trusted community groups without other motives. Interest is resurgent in smaller, more intimate spaces where communities can cultivate genuine interaction and connection.

“Smaller communities will begin to have access to things that previously only larger communities have had. A good example is rich data. As we see community tools rapidly emerging/improving, leaders of small communities will be able to operate in increasingly sophisticated ways.”
​​Todd Nilson – Community and Digital Workplace Strategist – Clocktower Advisors

The modern cultural landscape is characterised by a proliferation of communities and fandom that unite people in a way reminiscent of traditional subcultures, uniting people through niche interests and experiences. However, the Internet has propelled fandom into hyperdrive. What used to be niche interests have now become influential economic forces that everyone wants to tap into. This has led to an increased focus on the opportunity of superfandom.

While the Internet once prioritised the quantity and size of communities, it’s now shifting towards valuing the quality and strength of relationships within them. “Fandoms no longer entail screaming teenage girls obsessed with an idol; now, fandoms are so much more diverse, richer and more meaningful to those involved” (Vice). We’re seeing fandom shifting to the niche. From real life to digital spaces, a flourishing community is tailored to every taste, style, or obsession, whether cosplay, fitness, Latino trap, or memes. Communities are becoming increasingly niche, diverse, and meaningful. 

It is no secret the music industry has recently started adopting the superfan narrative. Under Lucian Grainge’s leadership, Universal Music Group emphasises “superfan experiences and products,” while Goldman Sachs has pointed out $4.2 billion worth of incentives for nurturing superfandom.

The power of online communities:

  • 77% say the most important group they are part of now operates online;
  • 98% of people who belong to an online group say they feel a sense of belonging to that group;
  • 33% of people whose community operates primarily online said they were more comfortable sharing their feelings and perspectives with the group than with friends and family, and
  • 71% of youth say aspects of community are essential to “being healthy”.

Currently regarded as the world’s most influential fan community, the Swifties stand out for their exceptional dedication and engagement. Taylor Swift has changed the way artists interact with their followers, fostering a closeness—or at least the impression of it—with her rapidly expanding base of supporters through active online fan engagement. Her strategy of sharing aspects of her personal life, interacting with fans directly, and embedding secret messages in her music and videos has nurtured a connection that transcends the usual fan-to-celebrity dynamic. The scale of the Swiftie phenomenon has even been recognised in financial circles, dubbed ‘Swiftonomics’. This term encapsulates the massive effect of the entire community on partnering brands, sponsors, or economies as a whole. For instance, Swift’s trip to Tokyo was anticipated to inject $228 million into the Japanese economy, with $162.7 million benefiting the host city directly. According to Apex Marketing, Swift’s community has added an impressive $331.5 million brand value for the Chiefs and the NFL. The power of fan communities has arguably never been as powerful as this.

The strength of communities today is evident, but the potential has yet to be reached. More and more online communities are emerging on new generations of platforms like Discord, prompting brands, organisations, and artists to recognise the importance of establishing a presence there. Online communities tap into our shared need for connections and have powerful business potential. An online community creates a space of shared vision and creates a “trust network.” A trust network means that a shared social network creates trust and allows people to do business in that network or community because they feel safe and trust each other. 

A survey among community managers and marketers overseeing various communities highlighted that the primary motivation for cultivating such communities is to establish a digital competitive edge for their businesses or careers. When asked about the advantages gained, 57% emphasised the significance of enhancing customer retention. Additionally, 48% cited fostering customer intimacy as crucial. Moreover, respondents frequently mentioned other benefits such as increased innovation (40%), heightened market awareness (40%), and boosted sales (37%) as key advantages.

“Many of the most successful online communities are running on legacy platforms that originally weren’t built for private, brand or corporate communities. The trend that I’m hoping to see is that new communities are established and grow on specialist community platforms, and even that well-established communities migrate to better platforms.”
Rich Leigh – CEO –  Radioactive

Community managers and marketers understand that new community-based tools and platforms are arising that offer a unique opportunity to engage with their audience on a deeper and more meaningful level than traditional social media platforms. Discord is an excellent example of what the future of digital community building will look like. When combined with communication tools like Discord and Web3 ecosystem frameworks, online communities will thrive to new levels. Artists like Fred Again have showcased the success of cultivating online communities beyond mere audiences. 

Fred Again celebrated the release of his newest album, “Actual Life 3,” with a unique approach, entrusting his community members to host and set up events in his name. To organise these gatherings, Fred again contacted his most dedicated Discord community members, asking them to host events. Fans from cities across the globe enthusiastically responded, taking on the role of event hosts. They invited fellow fans from the Discord server and coordinated with Fred Again and his record label to arrange the music setup at chosen venues. Fred Again then participated in virtual listening parties organised by his fans, held at real-world locations in 18 cities worldwide within just 24 hours. 

“Was at the release party in SF, the energy was amazing. More hyped crowd there without a DJ than I’ve seen for some [live] headliners.” – Bayer beats bungalow, Reddit user 2024

These events preceded the official album launch, allowing fans to gather in person and enjoy the album together before its public release. Community members also organised a live community launch party that allowed server members to interact with him. During this event, he engaged in a Discord Q&A session. This creative listening party strategy resulted in attendees not only enjoying this experience with like-minded fans and community members but also in attendees sharing their experiences and content from the events across their social media platforms, generating increased momentum and virality for the “Actual Life 3” album launch.

The Exponential Rise of AI

Ever since the introduction of ChatGPT, artificial intelligence has taken the world by storm. AI is rapidly reshaping our world in real time, from facial recognition to autonomous vehicles and voice replication.

** According to OpenAI, Chat GPT surpassed 1 million users in mere five days after its launch in November 2022. By January 2023, ChatGPT hit 100 million active users, making it the fastest-growing application in history. **

** 77% of businesses have already adopted AI or have an adoption plan (IBM) **

** Around 4 in 5 companies deem AI to be a top priority in their business strategy (Forbes) **

Despite AI’s advancements and potential, its concerns have garnered the same amount of global attention, from hyper-real images and videos that are indistinguishable from what’s real to the potential of AI to operate beyond human control.

** The majority of consumers are cautious of the growing use of AI tools in various businesses, says Forbes Advisor survey – 76% of consumers are concerned with misinformation from AI tools and 44% believe there is a stark difference between human-based generated content and the one generated by chatbots. **

  • ** According to research by the job site ‘Book An Artist’ reported that 89.2% of artists believe that current copyright laws are inadequate in the age of generative AI. **

For many, it has already surpassed its status as merely a tool; it has become intricately woven into everyday life. This shifts how we access and relate to knowledge and influences how we think, feel, and interact.

This shift is particularly evident in younger generations. As a result, there is an increasing tendency for those to collaborate with AI. According to Salesforce, 70% of Gen Z already use AI, and 52% trust it to help them make decisions. Vice research further indicates that 70% believe they will be using generative AI constantly in the future.

As AI continues to be intertwined with our daily lives, its impact on culture has quickly been felt in the music industry. It is changing every step in the industry’s value chain. For artists, AI use ranges from text-to-music generators to automated mixing processes and vocal synthesis. AI offers various consumer applications, making it easier to discover and explore new music, interact and engage, and even experiment with music creation.

In a study conducted for two major European collecting societies, GEMA/SACEM, 63% of respondents believe AI will primarily be used in composition, lyric writing, and other creative processes. Following that, 58% believe AI will play a significant role in recording, editing, mixing, and mastering, while 55% see its potential in creating promotional content. The study furthermore reported that 35% had used some form of AI technology in their music and creative work. The percentage even rose to 51% among participants under 35.

Even though many creators already use AI in music and other creative fields, the survey reveals widespread scepticism about AI’s role in these areas. Among those surveyed, 64% feel that the risks associated with using AI surpass its potential benefits. Conversely, only 11% think that the benefits of AI outweigh its risks. These risks necessitate an urgent industry commitment to establishing mechanisms that guarantee responsible and ethical utilisation for the opportunities to shine. These include clear regulations, proper education, and robust systems that protect intellectual property

Source: https://www.gema.de/documents/d/guest/gema-sacem-goldmedia-ai-and-music-pdf

While it is inevitable that AI will play a significant role in the music industry’s future, its impact on digital culture remains unpredictable, especially with AGI on the horizon. AI’s future evolution extends beyond tools and apps; it has the potential to change everything around it, from how we experience music to how we perceive its art form. Tech companies like Google are experimenting beyond the traditional AI music creation applications – they are now working on processing brain activity into generative AI models to reconstruct music. When you add in the dynamics of highly engaged digital communities, widespread user-generated AI content, and immersive virtual worlds, AI developments’ potential directions are limitless.

Looking Ahead: A Teaser into the Future

The digital landscape and culture are evolving at exponential speeds. Shaped by digitally native generations, increasingly prevalent participatory models, a growing creator economy, and thriving online communities – we anticipate a shift in modern digital business models and networks. Moving away from linear, top-down approaches to circular, bottom-up models – from corporate control to network control. Many industries will be confronted with a reengineering of their composition, value creation models and overall dynamics. Meanwhile, consumers and communities will gain more control, participation, and agency.

As we anticipate more in-depth explorations of each topic, this report first explores where we are headed. Understanding the digital landscape and culture will help shape the next generation and the future of music. 

Time has shown that the music industry’s foundations were not built for this digital era. Suppose we want to capture value from emerging technology and culture. In that case, we must start by reimagining the industry’s technology grid. This grid reflects evolvability for the future, designed not just to harness the current industry’s potential value but to enable it to grow beyond that.

Recent developments in the Internet’s infrastructure, mainly what Web3 offers, have achieved a maturity capable of fundamentally transforming the industry from the ground up. It enables new networks to emerge that stimulate future innovation while respecting principles such as digital ownership, privacy, scalability, and neutrality. In these networks, contributors become stakeholders, benefitting from the economic upside and governance traditionally reserved for a limited group of corporate affiliates, such as stockholders and employees.

Yet, despite Web3’s potential, constructing this new industry infrastructure requires the expertise and knowledge of those most familiar with it. As an ecosystem orchestrator, we strive to connect the leading experts from the Web3 and music industries to tackle our vision successfully. Additionally, this initiative demands thoughtful deliberation and should not only be controlled by industry giants. To serve the industry, it has to be collectively built and governed by all those who contribute to its success.

A foundational principle for creating industry-owned infrastructure is establishing a solid base of knowledgeable and engaged stakeholders. The most effective way to attract these stakeholders further is by showcasing the potential of Web3 through practical case studies. Following the case studies, we aim to attract a solid community to collectively build out the industry’s infrastructure for the future.

Adhering to our ethos of collaborative development, we want to develop these case studies with you, our pioneering members. These case studies serve as an initial demonstration of how a collaborative approach can initiate change, and we need you to lead the way. Participating in these case studies positions you as a change leader, placing you as a driver of innovation in the industry.

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