As we’re sure many have realized, a popular topic recently in the crypto space has been NFTs. These non-fungible tokens have captured the interest of crypto novices and experts alike and have transformed many from rags to riches. An exciting sector of NFTs has been Music NFTs.
What are Music NFTs
A music NFT (non-fungible token) is a unique digital asset that lives on the blockchain and can be bought and sold. What sets it apart from other NFTs is that it contains a music component alongside the visual component.
Music NFTs are different from just buying a track online. When one buys a track through Apple Music or Spotify, you are only buying the right to listen to that music. While with an NFT, the buyer now has ownership over that file and can decide how it gets used and distributed. It is a certificate of ownership over a unique musical work.
How to Invest in Music NFTs
Music NFTs can be bought and sold on a variety of platforms. Current websites include Opensea and Nifty Gateway, some of the most popular sites for NFTs. Websites such as Royal, Opulous, Catalog, and Sound XYZ are other newer websites. Artists will allow buyers to own a certain percentage of the music and encourage them to share and remix the NFT. NFTs can be purchased by connecting your digital wallet to an NFT marketplace and using purchased Ethereum to start investing.
Many artists have used NFT concepts in the past year and have created excitement among many fans. These are some notable projects:
DJ Justin Blau was the first to release a blockchain-based album titled Ultraviolet in 2021 and made $11.6 million, and sold 33 NFT vinyl records. 3LAU’s album proved that NFT could be successful and that there could be a vast market for it. Despite having a smaller fanbase, he was able to sell a large amount of NFTs and make a tremendous profit.
Kings of Leon
The Kings of Leon were one of the first major bands to release an album as an NFT in 2021, titled When You See Yourself. The band used incentives to encourage fans further to buy the NFTs on the platform Yellowheart. They offered front-row seats to their live shows for life, a special album package, and exclusive audiovisual art. They ended up gaining more than $2 million in investments. They also donated $500,000 to Live Nation’s Crew Nation to support live music crews during the pandemic.
In 2021, the visual artist Grimes dropped a digitally created collection of art and video set to music. It was entitled WarNymphs and made around $7 million. A single piece entitled Death of the Old was sold for almost $389,000 on the NFT marketplace Nifty Gateway.
Steve Aoki launched AOK1VERSE in 2022 and got fans to invest in an NFT passport that included free tickets to live shows, free merchandise, members-only events and performances, and more. It showed that NFTs could be used as a conversation between fans and the artist in which they were able to sell their product and fans would gain experiences.
Music NFT Uses and the Future of Music NFTs
There are a lot of uses for Music NFTs within the industry due to the high engagement fans have with the artist. Selling music via the blockchain gives artists a way to form a direct relationship with their fans without the need for a streaming service or record label and the opportunity for the artist to earn a more significant profit. Some high-profile artists have started to earn serious pay from NFTs in the past year, setting the foundation for yet another future transformation of the music industry.
By investing in Music NFTs, fans treat music like a commodity that can be bought and sold. It allows fans to invest in artists that they enjoy and believe in to gain a financial return. Investment in Music NFT may generate a closer relationship with the artist, which may interest many fans. They could potentially be used to grant access to discounted concert tickets, particular areas at concerts, or meet and greets with the artist. Overall, the use of the NFT depends on how the artist wants to use and structure it. Adding these special perks to investors who own the NFT further incentivizes fans to buy music NFTs.
By fans being the investors in music, it decreases the risk of the artists getting exploited. Fans are turned into shareholders and stand to gain value from the artists doing well. It allows the artist to have a more independent role in their music and attempt to grow from their fans rather than a record deal.
Many artists may start to experiment with NFTs as a way to interact with their fans in new ways that allow the fans to have more of a say in supporting the artists. It allows the musician-fan relationship to become more personal than it currently is within the streaming service era. Both artists and fans should be careful and make sure they fully understand what they are getting involved in creating music NFTs. However, with more research and interest, NFTs could provide a great way to invest in projects within the music industry.
Thanks for your time — Juanbug