The emergence of non-fungible tokens (NFTs) has drastically shifted some of the attention from cryptocurrencies. Instead of trading Bitcoin or Ethereum, users can trade any unique content, such as avatars from their favorite games, digital collectibles, artwork, etc. This trend is rapidly developing in the music industry, which still relies heavily on royalties. Now, many artists are creating music NFTs to sell to the highest bidders on crypto trading platforms.
In this post, we’ll share everything you need to know about this unique blockchain-based asset, from what it is to how it works, the current marketplace, and our top picks of the best music NFT collections in the market.
What Are Music NFTs?
Most people associate NFTs with art, avatars, and digital content sold as blockchain assets. However, there are several other categories in this fast-growing ecosystem, with music being one of the latest ones to emerge.
On the surface, buying music NFTs is not too different from buying tracks on Spotify or iTunes. Apart from blockchain, the key differentiator between the two options is ownership. When you purchase music from iTunes, you simply buy the music’s rights.
In contrast, music NFT gives buyers an incontrovertible certificate of ownership for that particular audio file following the transaction. The token is then stored on a different ledger to avoid theft or counterfeit.
Benefits of Music NFTs
To many people, music NFTs might not sound too appealing. After all, why should anyone buy music they can easily stream for free? Then again, why do people spend thousands or even millions on JPEGs anyone can download with a few clicks?
The short answer is the value (in different forms).
For some, ownership could kick start a long-term relationship with the artist they like. For sellers, it could be the source of financial exposure needed to become successful in the future. Depending on the quality and exposure, you can make hundreds of thousands of dollars in music NFT sales. In contrast, earnings on Spotify are just $178 on average.
Plus, if an artist gets more popular, they can increase their selling price or even put up their music NFTs for auctioning. Many artists use NFTs to give part ownership rights to buyers in terms of royalties. Suppose a piece of music has a value of $200,000. If you purchase 10% of the rights, you’ll get $20,000 worth of shares.
This is potentially a smart investment strategy. If the music’s value increases to $400,000, you make a 100% profit on your initial investment – taking your total to $40,000.
How Could Music NFTs Revolutionize the Music Industry?
Music is perhaps the most popular form of entertainment. We listen to it more than we watch movies. It’s become an essential part of our daily lives. On the flip side, selling music on the blockchain allows artists to connect directly with their fans without any third-party involved.
With fewer hands in the cookie jar, sellers can make better profits. However, minting NFTs can be expensive due to the high cost of Ethereum computing. Nonetheless, in the internet age, music NFTs are an excellent revenue stream due to several high-profile artists adopting blockchain technology into their delivery mediums.
Since 2021, there’s been a massive trend on the internet suggesting the democratization of the entertainment industry is imminent. One of the biggest examples of this trend is fan-funding which aims to bring music investment to the masses worldwide.
Suppose you start a funding campaign for an emerging artist. However, instead of getting concert tickets, merchandise, or other prices, you get a cut of the revenue generated. Many popular artists with millions of fans use music NFTs to fund their music albums on social media.
For example, Danny Saucedo, a popular Swedish artist, recently released many singles on his own after he left Sony with the help of his fans. Within 48 hours of posting on social media, he got even more money than he would normally get from a major label.
For emerging stars, decentralized fan funding platforms could level the playing field and help talented artists get their big break, and create a stable demand for their product in return for a healthy return.
Music NFT Marketplace
Many cryptocurrency platforms have launched an NFT marketplace for music, including Coinbase and OpenSea. Moreover, payment gateways like Visa are facilitating the exchange, causing a significant rise in traction, not just in the music industry but in the overall market.
Today, there are hundreds of NFT marketplaces you can choose from, including those trading on the NASDAQ or NYSE syndicate. These publicly-traded organizations operate on cryptocurrencies (Ethereum) which makes NFT trading easier.
However, even though OpenSea is currently the world’s most popular NFT marketplace, many artists prefer debuting on music-specific platforms, such as Catalog, Foundation, FormFunction, and Arpeggi. This is an excellent platform for single-edition music NFTs or 1/1s (as they’re called).
Apart from cost and NFT types, artists choose platforms according to their genres. For example, Groovetime is regarded as the best platform for dance music NFTs. Similarly, Foundry is perfect for generative music. This unique genre is based on human-computer collaboration using software and specific instruments.
The Biggest Music NFT collections and Songs In the Market
Now that you’re up to speed with what music NFTs are and the current market conditions, let’s check out some of the best collections and singles in the market today:
- Grimes
Grimes (Claire Elise Boucher) is a Canadian musician, singer, and record producer. She is regarded as the most famous communist on TikTok and took the opportunity to sell a series comprising 10 pieces on Nifty Gateway in February 2021, making over $7 million.
Her work included original artworks and short videos set to music, with each copy selling for $7,500. Her video “Death of the Old” sold for nearly $400,000.
- Steve Aoki
Steve Aoki is an American record producer and currently the highest-grossing electronic music DJ in the world. Steve was one of the first artists to leverage the power of blockchain and created his debut NFT collection “Dream Catcher,” which sold for $4.25 million on Nifty Gateway – another popular NFT marketplace.
The superstar went on to create more NFTs with art, music, and collectibles due to the overwhelming response from the NFT community.
- Kings of Leon
Kings of Leon is an American rock band based in Nashville, Tennessee. In 2021, the band decided to sell their latest album (When You See Yourself) as a music NFT collection. Within weeks, it generated over $2 million in sales as the band also promised four front-row seats of every Kings of Leon show in the future.
The band donated $500,000 of their total earnings to support live music crews struggling during the initial phases of the COVID-19 pandemic.
- Eminem
Eminem, one of the greatest rappers and artists of all time, shared his first NFT collection titled “Shady Con” in 2021 on Nifty Gateway, earning $1.78 million in return. The collection featured digital action figures based on some of Slim Shady’s most popular characters from his humorous videos. Other items in the collection include the original instrumental beats for collection.
However, it was “Stan’s Revenge” that generated most of the sales. This was a one-of-a-kind video featuring the rare Eminem’s Carhartt Air Jordan Trainers.
- RAC
RAC might not be the most popular artist worldwide, but he has a Grammy Award to his name. Moreover, the Portuguese-American producer has made over $708,000 from selling a collection of NFTs related to his latest music records and albums from the previous decade.
- 3LAU
3LAU (Justin David Blau) is an American DJ and dance music producer specializing in progressive and electro house music. Despite not being overly popular, Blau wrote his name in the history books by launching the first blockchain-based album in 2021 and earned over $11 million from it. By using his knowledge of supply and demand, he found the gap in the market and took advantage of it.
- A$AP Rocky
A$AP Rocky is another American rapper who had himself a piece of NFT pie and made over $200,000 by selling digital collectibles. However, as a megastar with over 17 million followers, this return didn’t do justice to his potential, and his NFT brought in just under $0.01 per fan. This was mainly due to poor marketing and his rather unorthodox approach to his album’s release.
- Tory Lanez
Tory Lanez is a Canadian rapper who made the headlines in 2021 with the release of his music NFT titled “When It’s Dark.” He earned a whopping $1 million from $1 NFTs that offered users access to the album. Considering he has just around 16.5 million Spotify followers, this is quite a healthy return of $0.06 per fan.
- Balkan Bump
Balkan Bump is an emerging artist who became popular for his unique NFT offering called The Winner Is…. This offering allowed the winner to name his next song and started trending on the digital space. Although the auction only brought in $10,000. However, considering he only has around 70,000 fans on Spotify, this NFT release brought him a return of $0.14 per fan – showing you don’t need millions of fans to make good money.
- Snoop Dogg
Snoop Dogg has over 134 million followers across all his social media accounts and 21 million on Spotify. Yet when he released his first music NFT album called A Journey with the Dogg, it only made around $1.5 million ($0.07 per fan). Granted, this is a lot of money. However, for a superstar of his caliber, this was nowhere near what you would expect from a multi-platinum recording artist.
Future of Music NFTs
NFTs are rapidly changing the music industry and forcing artists to rethink creative expression through music. However, there’s more to investing in music NFTs than following the numbers. You need to consider everything from demand to societal ethics, culture, target audience, and the music trends, in general.
It could take time to find a trend, artist, or music that attracts you. So, be patient and take your time to explore the different marketplaces you have access to. More importantly, make sure you assess your risk tolerance before splashing out your cash on this investment strategy. Lastly, the music NFT niche is still growing, so keep following the latest developments to explore new music and opportunities.
