Sep 12, 2022
Everything You Need To Know About Music NFTs in 2023
Whether you are a crypto fan or just an old-school music lover, now is the chance to get your hands on some of the upcoming trends of NFTs in 2023 — Music NFTs. The Music industry is slowly crawling towards the NFTs market. The British rock band Amazon’s third LP, “How Will I Know If Heaven Will Find Me?” is planned to be released in limited NFTs only. The Music NFTs market is set to bloom in the future, are you ready to ride with the trend?
Some of you might have heard NFT but never know what it is. Let’s have a look before we begin.
What is NFT?
NFTs stand for Non-Fungible Tokens. They are exclusive digital assets developed under blockchain technology and have the following features: Every token is unique and cannot be replicated.
Because of these exclusive features, NFTs are widely applied in the artistic field to create artworks and created a trend in 2021.
When was the first NFT made? On May 3, 2014, digital artists Kevin McCoy and Anil Dash issued the first known NFT, The Quantum NFT, a brief video clip of McCoy’s wife, Jennifer. Since then, there have been numerous types of NFTs. Some examples include CyberPunks NFT, Bored Ape Yacht Club, and CryptoKitties.
The NFT market is valued with a global volume of about US$8 billion in Q2 2022 and is expected to continue to grow.
What is Music NFT?
Music NFT is the combination of Music and NFT. It is similar to other NFT digital art but in the form of soundtracks. Songs are tokenized as non-fungible items made available for purchase, usually in a limited edition; it could be in a unit of 100, 1000, or even the sole only one(also known as 1/1.)
Here is a list of features of Music NFTs:
- A new way to raise funding for artists.
- A new way to establish new connections between artists and fans.
- A new way to track the market revenue streams.
- A new form of tokenized digital assets that can be traded.
A new way to raise funding for artists. Traditionally, artists need to rely on Record Labels or Record companies’ funding to publish their work to the public. But Music NFTs allow fans to own music by buying tokenized soundtracks directly from artists, which allows independent artists to get crowdfunded for their artwork.
On the other side, fans can now become soundtrack investors on platforms like Royal.io. They can purchase Music NFT to own royalties to generate a passive income and enjoy “full ownership” of what they love.
A new way to establish new connections between artists and fans. Some NFTs provide exclusive perks to fans who hold the NFTs.
Exclusive admission to gigs, events, or artist meetups, as well as early access to pre-released music and feedback on artist concepts, can be the perks of a Music NFT holder, which is more or less a VIP status of a Fanclub. Artists can now interact directly with fans in ways we haven’t yet imagined.
Kings of Leon released the album NFTs in 2021, and holders of their NFTs gain access to exclusive benefits such as limited-edition vinyl and front-row tickets to future shows, which generated close to $1.45 million in sales on OpenSea.
A new way to track the market revenue streams. Blockchain technology allows tracking of market revenue, automatic payments, and transparency amongst all parties. It makes the accounting of royalties distribution much easier.
A new form of tokenized digital assets that can be traded. Music NFTs can be traded as other cryptocurrencies, creating a marketplace that attracts more investment funding to the music creative field.
Why Are Music NFTs Setting A New Tone?
In case you’re not fully aware, NFTs are a new way to invest, and the global NFT market was valued at $11.3 billion in 2021 and is estimated to continue growing at a compound annual growth rate of 33.7% over the next eight years.
The music industry is not falling behind the uprising scene. They are using NFTs to sell albums, merchandise, and more. More and more artists release NFT albums as a way of selling their music. For instance, 3LAU sold its NFT for $11.7 million in one night.
NFTs offer a creative and unprecedented way for artists to sell their music:
Sell music with redemptions of products. The concept is simple: when you buy an NFT, which represents some form of ownership of products. These include redemption of physical objects like vinyl records, exclusive souvenirs, digital access like songs or albums, or concert tickets.
Sell music with ownership rights. Some platforms like Opluous also allow the sale of ownership rights to generate income. Artists who sell NFTs get funding for promotions, while buyers of NFTs gain exclusive royalties from the soundtrack as investment returns.
Roadblocks Remain On Way
As a new technology, It will take time for tokenized music to become a norm in the community.
NFT is still an alien thing to many nowadays. Simplicity is needed for fans to join the big move of the NFT world. Eliminating the technological barrier, like using alternatives to purchase NFTs, can help fans to connect to Music NFT.
Music NFT markets like Catalog, Sound, and Async already offer musicians opportunities to create. Still, music artists will need to learn how to monetize and build engagement in this new space. Patience is required for growing the creative community.
Why Should You Invest In Music NFT?
The early stage of development of the market. The whole NFT market, let alone the music NFT, is still in its early stages. Many more opportunities for Music NFT to be explored, and the traditional music business has yet to be significantly involved in the trend. It is early to join the trend before it takes off.
Owning your favorite music. Once you own the NFT, you are granted ownership: you can use it, trade it, and generate income from it. It can be seen as a financial instrument for long-term investment.
Supporting artists without a 3rd party. Streaming services or Records Labels can exploit artists with little payment. For instance, Spotify typically pays between $.003 and $.005 per stream, which means music artists need around 250 streams to earn a dollar. If you purchase Music NFTs directly from artists, the sales will go to the artist without being extracted by the 3rd party.
How To Invest In Music NFT?
You invest in Music NFTs by buying an NFT or creating one of your own.
Purchase Music NFTs. Here is a list of the Best NFT marketplace focusing on Music NFT:
1. Async Music
2. One Of
3. PlayTreks
4. Catalog
5. Sound
6. Mint Songs
7. TuneGONFT
8. Royal
9. RCRDSHP
10. Audius
Create your own NFTs. If you are a musician, you should try making your first music NFTs. Here is a list of benefits of making Music NFT:
- You can use it as a promotion and give away free copies of your music through NFTs.
- You can produce Music NFT at a low cost.
- You can directly sell your music copyrights to your fans.
- You can keep 100% of all profits from sales without paying fees to Records Labels and Streaming Platforms.
- You can get crowdfunding by selling your music in advance of the completion of your work.
Featured Web3 projects
In the Web3 space, there are a lot of projects about cultivating music creations. Here are a few featured projects:
MusicFund provides awards to aspiring musicians. These funds are from a pool of donations made by platform users who vote for the artists they favor. The top three artists receive a share of the entire pool. This aids artists in developing their work and allows them to interact with potential fans.
Royal.io provides NFTs as Limited Digital Assets, or LDAs, which enable artists to split revenue from streaming royalties with fans who own connected NFTs. This concept gained traction after prominent American DJ, and producer 3Lau issued the LDA for his hit song “Worst Case,” which rewarded NFT holders with 50% of the song’s royalty streaming revenues.
If you are interested in knowing the Music NFT ecosystem, check out “Your Complete Guide to the NFT Music Ecosystem” by nftnow.com.
Final Thoughts
Music NFT is the next emerging trend that could take place within the next five years. The ecosystem is still at the early stage of development.
It alters the music industry by giving indie musicians more incredible opportunities to thrive independently. On the other side, fans may support their favorite artists by purchasing songs, joining a fandom community, getting NFTs for special access, and even owning production royalties.
Let’s hop on the NFT train and see where it will bring us!
Frequently Asked Questions:
Can music be sold as an NFT?
Yes, Music can also be sold as NFT by using NFT platforms like Opensea and Rariable.
Which artists have released Music NFTs?
Kings of Leon is the first band who released the world’s first NFT album in 2021, followed by various artists 3LAU, Tory Lanez, Steve Aoki, Dillon Francis, and Illmind.
What is the difference between buying a license from Streaming platforms and a Music NFT?
A streaming license grants you the right to listen to the music; however, a Music NFT grants you ownership of the creation, which might provide you with unique benefits and even the sharing of loyalties.
