What LimeWire got wrong with NFTs, and how they've learnt for round 2

Clovis McEvoy
June 2, 2023
“Our platform puts ownership back into the hands of the creators, which is where it belongs” — Paul Zehetmayr, co-CEO, Limewire.

After an initial relaunch that left fans and artists wanting more, LimeWire is changing course with a new subscription model. Clovis McEvoy speaks with co-CEOs Paul and Julian Zehetmayr about moving away from one-off drops, combining subscriptions with scarcity, and putting ownership back in the hands of creators.

When LimeWire relaunched in 2022 as a music NFT platform, it came alongside hype, hope, and a healthy dose of nostalgia. A legacy brand with high name recognition, empowered by a licensing deal with Universal Music Group, was reinventing itself by bringing music NFTs to the mainstream.

Of course, things rarely run as smoothly as we might hope. Over the past year, lacklustre fan engagement, artist frustrations, and volatility in the wider web3 market have left LimeWire’s larger ambitions unfulfilled. Co-CEOs, serial entrepreneurs, and brothers Paul and Julian Zehetmayr will be the first to admit that their initial foray into web3’s creator economy didn’t take off as planned. After spending months listening to community critique, the pair feel ready to steer the platform in a new direction. 

Central to LimeWire’s relaunch were one-off drops from high-profile artists like Aitch, Travis Barker, and Brandy. The major deals — Aitch became the first artist to launch a chart-eligible NFT album in the UK — earned the platform significant media attention. But Julian reflects that it was the wrong direction for the platform. “It’s quite unscalable,” he muses. “It involved a lot of hand holding from us, and would take two or three months working with the artist to get their drop live.”

Co-CEOs of Limewire, serial entrepreneurs, and brothers Paul (right) and Julian (left) Zehetmayr.

 “It’s not the fault of the artist,” Julian continues. “The mainstream artists that we tried to onboard had never done an NFT before; this was their first drop, and they really hadn’t spent time in the web3 space.”

The lack of web3-specific interest from artists, coupled with a model built on one-off collections rather than long-term engagement, presented a systemic problem for the platform. In web3’s music ecosystem, which places a high premium on community building, artist-fan interaction, and integrity, any perception that an artist is merely passing through for a quick pay-day can be toxic amongst fans.

“If an artist is coming on the platform without a lot of utility behind the NFT, without a long-term plan, I think that’s often perceived as a cash grab,” Julian notes. “It really isn’t well accepted.” And it wasn’t only fans who were unsatisfied with this strategy; Julian says artists were also eager to build ongoing engagement beyond a single release. “Artists are obviously looking for a platform where they can get recurring revenue,” he says. “They're looking for a place where they can foster a community and give back to their most loyal fans on the platform.” The problem was that the initial version of LimeWire’s platform had no infrastructure to help artists build that community.

Having previously co-founded a series of successful business productivity companies, the pair are relatively new to the creative industries, but are no strangers to changing direction when the moment demands it. For ‘LimeWire 2.0’, the pair are turning to paid subscriptions as a replacement for one-off purchases, an approach that younger brother Paul says “represents a significant shift in the way creators and fans can interact.”

For inspiration, Paul and Julian initially looked to the advantages and shortcomings of successful web2 subscription platforms such as Patreon and OnlyFans. “On those platforms, there's really no incentive for users to keep content scarce,” says Julian. “There's no incentive not to share content on other services — we think blockchain can really help with this.”

In LimeWire’s new model, if an emerging artist has ten paid subscribers and releases a new track, only those early supporters will receive this content as an NFT. As the artist gains popularity, and reaches a hundred or a thousand subscribers, the ten superfans who own those early NFT drops are now in possession of an increasingly scarce and meaningful piece of memorabilia.

“Our platform puts ownership back into the hands of the creators, which is where it belongs” — Paul Zehetmayr, co-CEO, Limewire.

“We think of it like an investment in the artist,” Julian says. “Let's say you were subscriber number five when the artist just started off — you will have their oldest posts with the lowest number of owners. If new fans want to own the earliest content then they’ll have to buy it from another user. So, we're combining an NFT marketplace approach with subscription.”

Another major shift can be seen in the type of content LimeWire is looking to bring to the platform. “In the beginning, we tried to target a specific niche,” Julian says of their initial focus on LimeWire’s traditional music arena. “However, it was always part of the plan to eventually open things up, and we believe the concept we have now can work for many types of creators. We’re talking with musicians, podcasters, film makers, and even influencers.”

While the team want to move away from the ‘hand holding’ that accompanied LimeWire’s initial relaunch, they also make clear this new influx of creators can expect a platform that has high levels of support baked in. “It’s designed to empower creators to succeed in today's economy,” says Paul. “We know that starting and growing a fan base can be incredibly challenging, and that's why we've built a suite of tools and resources to help all creators every step of the way.”

“We’re combining an NFT marketplace approach with subscription.”

— Julian Zehetmayr, co-CEO, Limewire

It’s a manifesto that Paul says will permeate everything from creator marketing to customer acquisition to finance and operations. “Our platform is here to make it easier for creators.” That overarching philosophy has fundamental implications for the platform that LimeWire wants to be. “If you look at who's trading on OpenSea, it’s a very close community. Our question was: do we want to reach those 10,000 super-traders or do we want to be a mainstream platform?,” Julian reflects. “It hasn't gotten much easier in the last 12 months to buy an NFT. I think if we do want to be mainstream, then we need to focus on making things as easy as on a web2 platform, and that means abstracting away things like crypto-wallets, and making payments very simple.”

While more web3-specific aspects of the platform might remain opaque to the average user, the team are still firmly embedding crypto in the LimeWire ecosystem behind the scenes. Last May saw the launch of the platform's native currency, $LMWR, which trades at a market capitalisation of just over $5m. The token will be used to incentivise longer-term engagement on the platform, and will give holders access to discounted subscriptions and ‘superfan’ statuses. “You can always pay by credit card,” Julian says, “but there will always be discounts for people paying with the LMWR token.”

Time will tell if this latest iteration of LimeWire can crack the code of mainstreaming music NFTs, but one thing’s for certain — version 2.0 puts longer-term engagement and community building centre stage, and this can only be a good thing. “By allowing creators to set their own terms and engage with their fans on a more regular basis,” Paul says, “we believe that we are empowering artists to create a more sustainable revenue stream. Our platform puts ownership back into the hands of the creators, which is where it belongs.”

“There’s no incentive not to share content on other services — we think blockchain can really help with this.”

— Julian Zehetmayr, co-CEO, Limewire

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Clovis McEvoy
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Clovis is a New Zealand born writer, journalist, and educator working at the meeting point between music and technological innovation. He is also an active composer and sound artist, and his virtual reality and live-electronic works have been shown in over fifteen countries around the world.