The music industry and technology go hand in hand. From vinyl records to online music apps, the industry has seen various developments over the years. The latest advancement is the introduction of NFTs into the music industry. Artists like Grimes have sold tokenized versions of their music and made millions of dollars.
But what is NFT? What do the crypto market and blockchain have to do with music? How can you buy these non-fungible tokens from artists? Who owns the rights?
We know you have many questions. So we’ve decided to answer them in detail in this article. With crypto entering the digital art and music world to revolutionize them, it’s time to understand what the future holds.
What Is Music NFT?
Before we talk about music NFTs, let’s understand what an NFT is.
A Quick Overview of an NFT
NFTs are non-fungible tokens, digital assets built, shared, and sold on the blockchain. In simple terms, an NFT is a digital file. It could be art, music, document, trading file, or anything that you can store on a blockchain as a collectible item. The advantage of NFT is that it cannot be copied, deleted, or stolen.
Of course, that brings us to the question of screenshots, images, recordings, etc. Sure. You can take a screenshot/picture of digital artworks or record the song and play it again. But that would not be considered an NFT. Only the original is valid, and the others are pirated versions. It’s easy to identify copies as no two NFTs are alike. Each one is unique, unlike the Bitcoin or Ethereum files, which are identical.
Buying music NFT is like buying the first edition hard-bound copy of a classic. It is rare and valuable. Moreover, NFTs are created in a limited number. Once someone sells them, you’ll have to wait for one of the buyers to sell them to you.
All You Need to Know About Music NFTs
Music NFTs have bridged the gap between musicians and fans. Artists and bands no longer have to wait for the music companies to sell their tracks, record labels, and distribute the royalties. There will be no breaking of royalties, where musicians, especially emerging artists, hardly get any money while the music house earns millions.
The money fans spend on buying albums, tracks, and record labels or listening to the songs on streaming services didn’t directly reach musicians until they began to sell their work directly as NFTs. For example, Canadian musician Grimes earned $5.8 million in just twenty minutes by selling music NFTs.
If he used the same old traditional method of selling through music studios and concerts, he would have had to wait for weeks and months to earn the same amount.
How Do Music NFTs Work?
It’s fascinating to see artists take back control of their work and earn what they deserve. No wonder musicians are planning their future album releases solely on the blockchain and as NFTs. When they can sell their songs directly to fans and safeguard their intellectual property, why sign contracts and wait for royalties?
According to the standard revenue distribution in the industry, the artist gets 50% while the rest of it goes to agents, distributors, etc. The ratio may vary based on the popularity of musicians (emerging talents tend to get lesser royalty due to the lack of a proper fan base and exposure). The payments are even worse on streaming platforms.
NFTs, on the other hand, have proved themselves to be on the artists’ side. The early figures speak for themselves and have set the pattern.
How the Music NFT Actually Works
But how does the music NFT actually work? What goes on behind the scenes? Let’s find out.
Music NFT can be in different forms. One can sell the song/track as an audio file, video, a concert ticket, album cover, or even merchandise (signed by the artist). The process behind producing and selling music NFTs is similar to how one sells other non-fungible tokens. Blockchain technology is used for minting NFTs.
Musicians can decide which blockchain to use. The music industry currently has four major blockchain networks, OpenSea, Nifty Gateway, NFT TONE, Opulous, and a few more. Musicians will then announce the release of their upcoming album as NFT drop, and fans will gear up to buy tokens as and when available.
Here, artists have two ways to sell their creations. The first method is to go for a one-off sale and auction the audio file. The highest bidder will get the file, but the musician will still own the copyrights.
The second method is to create a limited number of smaller files, say 500 or 1000, and sell them individually as NFTs on the blockchain. Fans who buy these NFTs now own the files. They store them in their crypto wallets.
Fans can either keep the music NFT with them or sell it to others for a higher price. The advantage of reselling music NFTs is that artists will still get a portion of the sale amount.
How to Get Music NFT?
People who are already used to the crypto space will find it easy to buy music NFTs. However, it’s not compulsory to trade in cryptocurrency to build your music or digital art NFT collection.
All You Need Is a Computer or Smartphone
You need a computer or smartphone (with an internet connection) to access music NFTs. The first step is to find out platforms where people will sell these tokens. Check out the three platforms we mentioned in the previous section.
Opulous goes one step further by allowing artists to include real-world percentages on future royalties. Fans can earn money even by simply owning NFTs. Yep, music tokens are just a collection but also a money-making method.
You Also Need a Crypto Wallet to Store NFTs
You need to buy a crypto wallet to store NFTs. Here, you can buy a hot wallet or a cold wallet. In a crypto wallet, you store the private keys of your cryptocurrency and NFTs. A hot wallet is always connected to the internet, while a cold wallet is not. You have to enter private keys manually. Moreover, a cold wallet is a physical device. Just make sure you remember keys and note them down in a safe place (don’t share with anyone, though).
You have to convert fiat currency into crypto to buy digital assets in the NFT industry. This is relatively easy, as many platforms convert fiat (dollars, pounds, rubbles, etc.) to crypto of your choice. However, NFTs are purchased using Ethereum. It’s best to use popular and authentic platforms like Binance or Coinbase to buy ETH (Ethereum).
Finally, you go back to the NFT blockchain and buy tokens for the digital copy of the music/art you want to own. Follow the instructions provided, and that’s it.
Can NFTs Revolutionize the Music Industry?
In short, yes. The NFT industry doesn’t just bring immediate income for musicians. It changes the entire music industry and its perspective on taking art to the public. Artists, performers, agents, audience, and everyone directly or indirectly involved with art will notice the change.
The biggest benefit of music NFTs is that you can use them in various forms. The following are a few ways in which NFTs revolutionize the music industry:
Independent singers and bands can release new music albums as NFTs. Listeners can buy the full version of the album/song on the blockchain.
Beats and tracks can be sold and resold as music NFTs. This brings royalties to artists each time their tracks resell. Moreover, using beats/tracks to make music becomes easier.
On-Chain Merch Sales
Merch is short for merchandise, which you can now buy on-chain. It doesn’t matter if the merchandise is physical or virtual.
Sell Exclusive Content
Did you record any new music tracks or videos? Musicians can sell them exclusively as tokens in a limited number. The only way to buy would be through the music NFT platforms.
New artists often find it overwhelming to compete with famous artists. The rise of NFT will help emerging artists build their fan base and attract listeners through NFT platforms. They can market their talent and earn from it without giving music houses a significant chunk of royalty.
Artists like Snoop Dogg and Post Malone are using NFTs to bridge the gap between them and their fans. While Snoop Dogg had a Sandbox Hangout Session, Malone sold NFTs to those who wanted to play beer ping pong with him.
Revenue for Fans/Owners
Fans who purchased NFTs get a portion of revenue when the song/music is used on streaming platforms, radio stations, merch sales, and other partnerships. They also get special privileges and access to concerts, free concert tickets, etc. They have ownership rights.
Which Are the Top Music NFTs Currently?
Quite a few artists sold music NFTs in 2021, and many of them generated a lot of interest in the market. Let’s look at the top five:
The famous visual artist and musician created NFT for WarNymphs, a collection of digital art, visuals, and music. The Death of the Old (a single) got auctioned for $389,000 on Nifty Gateway. The entire project earned him close to $7 million. Two other titles, Earth and Mars, had bulk sales, with each piece being sold for $7500.
Kings of Leon
This rock band created an NFT project titled When You See Yourself. The collection was a limited edition in a combination of digital art and vinyl record (on-chain sales). It was one of the first bands to enter the NFT industry and earned more than $2 million.
The sale included front-row concert tickets, with a Golden Ticket auction for every show the band would perform during the headline tour. King of Leon donated a handsome amount of $5000,000 to Live Nation’s Crew Fund.
This American DJ and music producer worked with Antoni Tudisco, a popular visual artist, to create NFTs titled Dream Catcher. He earned around $4.25 million from the sales, which took place on Nifty Gateway. Steve also happens to be one of the early artists who understood the potential of NFTs and dove headlong into the market. Needless to say that he is excited by the success of the project.
Justin Blau, the musician, and producer of 3LAU, sold his NFT collection for a whopping $11.6 million through auction. The fanbase of 3LAU is smaller compared to many others, but the auction was a super success. He sold just 33 NFT-linked vinyl records and made money in three days. The auction lasted from 25th to 28th Feb in 2021.
Music NFTs are changing the way we look at music. While fans and artists are excited, investors need to be a little careful when bidding on NFT collectibles to earn more money in the future. Since the market is new and has to deal with governmental regulations for cryptocurrency, artists should carefully weigh their options and make the best decision.
Nevertheless, we see many changes revamping the music world. It would be interesting to observe how the industry will adapt.