Copyright issues, exploitation, no royalties. These are but a few challenges that musicians all over the world face when it comes to the production and distribution of their music. With the emergence of music non-fungible tokens (NFTs), there is the potential that the music industry can be changed for the better.
Read on to find out what Music NFTs are, how they work, and how they can empower musicians globally.
What are music NFTs?
2021 was arguably the year of non-fungible tokens, with multiple use cases popping up beyond crypto art and collectibles. Music NFTs is one of them.
An NFT is a unique cryptographic token recorded on a blockchain that represents a digital or physical asset. Once an NFT is created, it cannot be changed or duplicated. What’s more, NFTs can be coded in a way that allows for royalty payments to the creator, which makes them a highly interesting technology for musicians.
Music NFTs are music tracks recorded on a blockchain in the form of unique non-fungible tokens that belong exclusively to the owner of the NFT. However, unlike mp3s you download onto your smartphone, music NFTs can also be sold on and allow musicians to earn royalties for every secondary market sale.
How do music NFTs work?
When it comes to the music industry, there are various forms in which music NFTs can appear. It can be a song represented by an audio file or video, an album cover, a concert ticket, and signed merchandise, among others.
In the production or sale of a music NFT, the principle remains the same as in other NFTs. A musician or band will decide what they want to sell to their fans, be it an audio file, concert tickets, or merchandise. They will then identify on which blockchain they will mint their NFT, or which Music NFT platform to utilize. Some of the currently available Music NFT platforms are NFT TONE, Opulous, OpenSea, and more.
After identifying their platform of choice, they will inform their fans of the release of their NFT drop, and put them up for sale at whatever value they would like to sell their works.
Since music NFTs (and all other NFTs) cannot be replicated, they might decide to either have a one-off sale on an audio file, where the highest bidder owns the original audio file (but not the copyright). Alternatively, they might decide to create a limited number of NFTs of the same audio file, let’s say 10,000, and then put them up for sale on a music NFT marketplace.
Every fan who buys the music NFT becomes an owner of their favorite musician’s work. They are then able to store the music NFTs in their crypto wallets, and if they are interested, may sell off the NFT to a higher bidder in the future. Despite being the owner of the unique NFT and being able to sell it, the musician who created the NFT can earn from the re-sales of their work, which is one of the most powerful ways music NFTs can empower musicians.
Several musicians and bands have already benefited from Music NFTs. For example, Dj 3LAU had an NFT drop called the Ultraviolet Collection, which had a world record sale of over USD 11.6m. This was from a single auction of 33 unique tokens. Additionally, Canadian musician Grimes sold digital artworks in a collection called WarNymph, which made around USD 6m in early 2021.
How NFTs can empower musicians
Other than earning an income from immediate music NFT sales, let’s look at more ways in which NFTs can empower musicians.
Earning of royalties
Musicians who create NFTs and sell them will earn from the subsequent sales of their NFTs. This will help to reduce the issue of musicians not earning from the sale of their work, or only earning low amounts from centralized streaming services.
Cutting out middlemen
One of the main challenges that musicians face is that they are often under a contract with a record label. Alternatively, the way most independent musicians earn their money is through streaming platforms. Either way, use of music NFTs allows musicians to earn from the sale of their music or merchandise by directly selling to their fans.
Building an active fanbase
Music NFTs allow a musician to build a fanbase by creating a space in which their fans can access unique NFTs related to the artist’s works. For example, events such as NFT airdrops enable musicians to reach audiences they would not have had access to before.
Also, musicians can capitalize on unique fan experiences, such as having the opportunity for their fans to hang out with them virtually or in person. This has previously been accomplished by musicians such as Snoop Dogg in his SandBox hangout session, as well as Post Malone, who sold NFTs for people to play beer pong with him.
Providing opportunities to new artists
The low barriers to entry into the music NFT scene are a great opportunity for new musicians because no one holds them back from releasing new music or expects them to fit in a certain ‘box’ to score a record deal. With music NFTs, all a musician needs to do is to mint their music on their platform of choice and market their work to their fanbase.
Currently, there are only a handful of musicians who are exploring the viability of music NFTs. However, with increased knowledge and adoption by fans, the opportunities for artists to benefit from the sale of music NFTs are growing substantially.