LÜM’s Journey to Blockchain and Creating a New Economic Pie
When we started LÜM over two years ago, we were the next evolution of the platforms that had come before us. We built a platform that paired social media, music streaming, micro-tipping and project management features to provide artists with a one-stop shop to share music, engage with fans, monetize their content, and collaborate with other artists. And they took notice.
We attracted and served an incredible community of over 200,000 artists who uploaded over 600,000 tracks to the platform. As one of the largest completely user-uploaded music platforms in the United States, artists made money directly from their fans instead of intermediaries. The “LÜM Fam” was an evolution from the attention economy to the passion economy.
But we learned that building in the current music industry is complex. Music has become overly commoditized with the prevalence of streaming services and the ‘all you can eat’ subscription model — a global catalog of music for the price of a few cups of coffee a month. Leaving artists, gatekeepers and middlemen all fighting over the same slice of the pie.
The biggest issue in music today is that the pie simply isn’t big enough — it isn’t as big as it should be. Global recorded music reached $21.6 billion in 2020. Meanwhile, the global gaming industry has grown to exceed $300 billion. This happened by unlocking value that always existed but was never actualized. Technology had suddenly provided the fans of streamers more value for their time and money. Innovation was (and is) not a zero-sum game for gamers, brands, and businesses.
Music has now been given the gift of innovation. How the music industry decides to use blockchain technology will ultimately determine if we fight over the same slice of pie again or whether we are forward-thinking enough to bake ourselves a new one.
In the next few months, LÜM will be completely relaunching using blockchain technology. The biggest difference in our platform will be that fans can now “own their fandom.” It will be a model in which fans can feel a sense of ownership in the artists they support and are financially incentivized to contribute to their success.
Our “aha” moment happened when Twitch and others allowed fans to decide the value of their most coveted e-sports gamers based on their fandom for the streamer, not on the value of purchasing the content they produced. We saw the potential to create a new model that unlocked new opportunities for the industry. It is a model that doesn’t require artists to sell their masters, give up equity in themselves or spend excess time creating exclusive content to monetize their largest supporters. It is a model that is less focused on the value of content and more focused on the value of an artist — decided by their community of fans.
In our first act, LÜM will be launching the Access Pass for the music industry. The model will allow an artist’s biggest supporters to own their fandom in a way that only blockchain technology can enable.
These Access Passes are the foundation of LÜM’s ecosystem in which fans will be able to collect, trade and sell Access Passes from their favorite artists and invest in their careers. Fans who hold these Access Passes will receive priority access to future limited edition NFT drops from an artist to commemorate career milestones, memorialize industry achievements, participate in new music releases, reward fan engagement and much more.
Collecting Access Passes and these future digital collectibles will allow fans to participate in LÜM’s larger game, which will reward fans for participating in the success of their favorite artists. In the future, Access Pass holders will also unlock artist-specific digital and real-world utility, for example, exclusive content, closer access and live entertainment experiences.
We have watched closely as more projects in music try to solve the problem of value creation. Here are the lessons we have learned:
- Collective Value: We must create collective value by unifying artists and fans in a community so that artists can move beyond just trying to monetize their current fan base alone.
- Trust is Paramount: Fans must believe that there is a future beyond a single NFT drop that will allow them to participate in the future success of an artist.
- Artists Need a Long-term Solution: The technology will continue to advance; therefore, it will be critical to build the proper foundation to allow artists to create value beyond any initial project.
LÜM wants to introduce blockchain technology and NFTs to an entire generation of artists and fans. Our first goal is to launch NFT Access Passes with over 10,000 artists and provide an easy on-ramp for the music industry to participate in blockchain, the metaverse, and unique IRL experiences.
By putting the value of an artist back into the hands of fans, we will unlock value that has been sitting dormant for far too long. A new pie is here — it’s time for dessert.