What is an NFT in Music and Why Do They Matter?
NFTs have been one of the top trending topics for the past two years, but what are they, and how can an NFT for music shape the industry’s future?
Non-fungible tokens (NFTs) are often associated with digital images sold as blockchain-based assets, but there are many other uses for NFTs. Music NFTs are one of the fastest-growing ecosystems in the NFT business.
If you look at it from the outside, music NFTs appear to be a blockchain-based substitute for purchasing tunes from a music platform. However, when you are buying a track, you are just purchasing the right to listen to the song, essentially giving the privilege of accessing the content you’ve purchased. Music NFTs, on the other hand, allow anybody to listen to a song, but they also grant ownership of the file through an NFT.
Markets, or individuals, find value in ownership of provably unique and original goods. Music NFTs can appear counterintuitive: Why buy the music you can already listen to? The answer is the same as purchasing JPEGs that anyone may right-click and save.
This NFT’s investment may gain more value if the musician becomes well-known. Having a more personal connection with an artist may provide that value for certain people. Others may be interested in gaining financial access to an artist they hope will succeed.
Trying to understand cryptocurrencies and NFTs might be puzzling, but it’s helpful to recognize the amount of cash created and spent in this new digital space. To help you grasp this relatively developing economy, we’re covering what is an NFT in music and how it’s impacting the industry.
Music NFTs: What They Are
It’s no surprise that NFTs are disrupting a wide range of businesses, and going by current trends, the future of music will be shaped by NFTs in very significant ways.
NFT means ‘non-fungible token’. Fungible items like dollar bills may be swapped, making them interchangeable. Instead, non-fungible tokens (NFTs) are digital assets that you cannot trade for another NFT or any other digital asset. As a result, each NFT is truly “one-of-a-kind.” Blockchain technology moves NFTs from one owner to another, providing a digital trail to verify the transaction from the seller to the buyer. The buyer’s exclusive ownership rights are encoded for the new owner.
The use of blockchain technology to produce digital certificates of ownership for distinct physical assets is becoming more widespread, although this is not yet the norm.
For example, a certificate of ownership for a work of art would serve as a physical representation of a collectible object in the real world. Certificates of ownership will be obsolete because of the NFT’s use of blockchain technology.
Online marketplaces are used to sell and distribute NFTs. As a result, most musicians prefer to offer their products on music-specific platforms rather than on the largest NFT marketplace, OpenSea.
Single-edition music NFTs, often known as 1/1s in the NFT community, find their principal market in catalogs. One of its competitors, the Zora marketplace, is likewise powered by the same protocol. Before making a purchase, investors can peruse a list of available assets. To purchase a digital asset on the NFT marketplace and link an account to a cryptocurrency wallet where the coins are stored, you’ll need to have cryptocurrency on hand.
Ethereum ERC-20 tokens are most often used for blockchain NFTs. The Ethereum blockchain employs the ERC-20 token to launch a smart contract.
NFTs have given artists, businesses, and celebrities a new avenue for making money off of their work. To reach a new generation of investors and collectors, artists can build a library of digital assets. Celebrities use their influence to create investments that benefit from their brand identity, potentially selling for millions.
Regarding NFTs and music, they might include songs, albums, music, lyrics, and soundbites. Even JPG and GIF formats can blend music with digital art to produce unique works of art.
Music NFTs
As far as what is an NFT in music, it can be displayed in various ways depending on how they are accessed, thanks to smart NFTs that can handle many formats. For example, an audio NFT may include a PDF file containing the lyrics to a song or a message from an artist, which would be shown when accessed in a text-based format.
NFTs appear well-positioned to shape the future of music when you dig into what they can do.
For instance, NFTs can ensure that musicians get paid more equitably for their artistry. Currently, creators typically give up control of platforms when signing a contract, making it impossible to identify where their work is ultimately distributed.
NFTs, on the other hand, allow musicians and other artists to retain ownership of their work from the outset. While individuals can give up the rights of a song or album when they mint an NFT, they can keep it if they bake the NFT instead of minting it. As a result, musicians receive a direct and more equitable payment when music is sold. Music NFT owners who choose to resell the NFT will automatically earn royalties from the original author each time the NFT is sold, and this process can continue. All of this is possible because the metadata of the NFT contains a record of ownership.
Innovative NFT music has already made waves in the industry:
Jacques Greene Auctions Song Rights
The record company LuckyMe, situated in the United Kingdom, made a momentous statement in February 2021 that catapulted the music art sector (and NFTs) to new heights. Pioneering electronic phenomenon Jacques Greene announced that he would be auctioning off the publication rights to his new track “in perpetuity.” “Promise” was the appropriate title for the single.
Before the auction, he gave fans a six-second preview of the song via the digital art marketplace Foundation. The buyer paid thirteen ETH (about $23,000 at the time) for the track.
Artist Begin Auctioning Albums
Electronic DJ and producer and Save The Music supporter, Steve Aoki released his first NFT album, “Dream Catcher,” which fetched $4.25 million at auction. Acclaimed visual artist Antoni Tudisco helped produce Dream Catcher’s 11 distinct pieces. They also offered original audio and visually stunning animation.
Headliners like The Weeknd and Eminem have achieved seven-figure sales on the platform thanks to these sales, which helped pave the path for future seven-figure NFT sales on the site.
3LAU Generates $11.7m
NFT for musicians was likely first used by Justin Blau, best known by his stage name 3LAU. He reportedly made $11.7 million off selling his Ultraviolet collection of 33 distinct NFTs by the end of February 2021.
Furthermore, he raised all of that cash in just a three-day auction.
BAYC Paves the Way for Band NFT Kingship
One of the hottest NFT ventures, Bored Ape Yacht Club (BAYC) has sold hundreds of millions of dollars. Gargamel, Gordon Goner, Emperor Tomato Ketchup, and No Sass are four pseudonymous developers who worked together on this collection of NFTs. Each of the 10,000 individual cartoon primates was purchased for roughly $190 in ETH. The introduction of the Bored Ape Yacht Club NFT in late April of 2021 made the NFT world a bit more fascinating.
Album NFTs
Last year, Kings of Leon issued an NFT album, the first band to take this step. This NFT album comes with all tracks, plus four front-row seats and a VIP experience at any Kings Leon show for the token holder’s lifetime.
“When You See Yourself” has produced almost $2 million (£1.4 million) in non-fungible token sales for Kings of Leon. Some of which came from six ‘Golden Ticket’ auctions
As one of the first big releases to include a collection of digital NFTs – each unique token contains original album artwork and limited edition ‘Golden Eye’ vinyl.
This includes a donation of approximately $500,000 from Kings of Leon to Live Nation’s Crew Nation fund to help live music crews during the coronavirus outbreak.
Album Art and NFTs
The idea that the metaverse is a more level playing field than the actual world has thrilled the public with the potential for metaverse NFTs. It is a connection, a network, and a space for cooperation that offers up prospects for musicians to partner up with digital artists to complete the audiovisual cycle.
One collaboration of note was when British artist provocateur Damien Hirst, who created Drake’s “Certified Lover Boy” album cover art, made a splash in both the Hip-Hop industry and the crypto sphere by converting the artwork into 10,000 Ethereum NFTs.
NFTs were “airdropped” to individuals who already own Hirst’s “The Currency” collection. These NFT collectibles, titled Great Expectations, were not for sale to the general public.
How Will NFTs Impact the Music Industry?
What do NFTs and metaverse music indicate for the future of the music industry? NFTs can transform the relationship between artists and their audiences. No label, distributor, streaming site, or social media platform is needed for a direct transaction between the individuals who create music and those who listen to it.
Let’s go a little further into what it entails:
Fans Can Invest in You Directly
As an artist, you have limited possibilities to learn about your fans. Even if you look at the number of individuals listening to Spotify and other primary data, you have no idea who is behind those figures.
Your most ardent supporter may now demonstrate their devotion to your work by making a financial contribution through various platforms such as a NFT music streaming site.
Your followers can tell you how much they believe in your future success if you’re an up-and-coming artist. NFT can be bought today with the expectation of increasing in value if you go out of business in the future.
In addition, if someone buys an NFT from a lesser-known artist, they will likely do everything they can to promote the artist and aid their development to raise the value of the NFTs. For the artist, this is obviously a win-win situation, and it can also help bring in more NFT purchasers in the future.
You may utilize NFTs to raise money for your next project as a last option. As with a Kickstarter campaign, you may generate money for an album release by selling non-financial rewards (NFTs).
You can Offer Fan-only Benefits
Purchasing an intangible for a large sum of money is risky for many individuals since NFTs are still a relatively new idea. For this reason, artists produce NFTs that comprise their digital goods and an exclusive benefit or experience that the purchasers can redeem in real life.
For example, token holders of 3LAU’s NFTs can collaborate with the band on a new song and contribute creative input.
Artists Can Capitalize on Their Work
As everyone knows, ordinary musicians cannot support themselves only from the revenue generated by their music being streamed online. Artists in the music industry only get to keep about 12% of the money they make from their work.
There are numerous factors to consider concerning your NFT, such as the value, popularity, and demand. NFTs allow artists to conduct business with their fans directly and keep nearly all their revenue. Still, Spotify’s $0.0032 per stream is likely to be less lucrative in any event.
Assume you have 500 devoted followers willing to support your career by purchasing 10 of your highly sought-after NFTs. Additionally, you may establish a fixed price for your NFTs, or you can have an auction. In a bidding war, the cost of each NFT may rise dramatically.
Finally, you may choose to get royalties each time your music NFT is sold to a new token holder.
Now that you know more about what is an NFT in music, there’s still one thing that will be fundamental to the industry: young artists being major music influencers and contributors. Save The Music is dedicated to providing the tools and resources for students to create music in school. If you are interested in finding out how you can contribute to bringing about positive change in a child’s life through music, get in touch with the Save Tthe Music Foundation. We are a non profit organization for music education that partners with those in charge of educating young musicians. We work with public schools to supply new musical instruments, technology, equipment, and resources. With this program, schools can begin and keep their music programs running. Contact us today to find out how you can save the music.