The excitement about NFTs in the art world and how they are beginning to alter the business is hard to miss unless you’ve been living under a rock. As a result of the modest NFT’s influence, artists, art admirers, and investors are now asking themselves how (and what) gives art its worth and how it should be experienced.
Though some in the creative world have applauded this, others have voiced worries about a lack of oversight and quality assurance. One cannot deny the many advantages that NFTs present to artists, such as the possibility of profit, the feeling of ownership, the rarity of the work, and the accessibility to a global market.
Do NFTs, then, have a role in the recording industry? Can they seriously compete with established music industries like record companies and streaming services, or are they just another passing fad? Let’s dig a little deeper.
What is Music NFTs?
If you are just getting started in this field, you should read our primer on NFTs to learn the basics of what they are and how they function. The definition of a non-fungible token (NFT) is a unique digital token used to represent a digital (or sometimes physical) asset that is stored in a blockchain. Once an NFT has been formed, it can’t be modified or copied (this is what gives them their inherent value).
So, music NFTs are just songs that have been stored on the blockchain as their own personal, non-transferable tokens. Music NFTs, in contrast to mp3s downloaded to a smartphone, can be traded on the secondary market, generating royalties for the artists (more on this later).
How NFTs work in the Music Industry
NFTs in music can take several forms. Music NFTs can be audio or video files, album artwork, concert tickets, or official goods. An NFT can contain any music industry digital content.
Music NFTs follow the same rules as other NFTs. Before selecting a blockchain to mint their NFT, a musician or band will decide what to sell. Ethereum is by far the most popular blockchain for music NFTs, followed by Polygon. After choosing a blockchain and minting the NFT, the artist will tell their followers and sell them at their own price. A fixed price or auction can be used.
Music NFTs cannot be copied or counterfeited, thus artists can auction an audio file to the highest bidder. They could also sell a limited number of NFTs of the same audio clip on an NFT marketplace. Thus, fans who buy the artist’s NFT own it exclusively. The NFT owner can then store them on their crypto wallets or sell them to a higher bidder.
Examples of Music NFTs in action
While the digital art business’s exorbitant NFT sales have overtaken the music industry, there are still cases of musicians making a comfortable living off of music NFTs. Here are a few of the most notable:
- Grimes made $5.8 million with her WarNymph Collection, Vol. 1
- 3LAU raised $11.7 million from his Ultraviolet NFT album auction
- Steve Aoki dropped his inaugural NFT collection, Dream Catcher, for $4.25 million
- An unreleased demo recording of a 17-year-old Whitney Houston sold for $1 million at auction.
Five ways Music NFTs could empower Artists
Let’s have a look now at some of the most important advantages that musicians and artists can anticipate receiving from music NFTs, in comparison to the more conventional methods of music publication.
You don’t have to give up ownership of Your Music
As a condition of working in the conventional music industry, artists typically have to give up some control over their creations to recording facilities, record companies, and sometimes even digital distribution platforms. By using NFTs and NFT music sites like Catalog, this may become obsolete.
Cutting out the middleman
Middlemen have ruined bands and musicians’ lives innumerable times. These intermediaries hurt musicians by restricting their creativity or seizing money. Thankfully, NFTs give musicians direct access to their fans, restoring full control over their work. They own their work and can make more money.
NFT royalties are coined into NFT metadata. The musician will receive a share of future digital asset sales under NFT royalties. NFT royalties average 5-10%. This gives musicians another possibility to make more money, and it’s fully autonomous.
The chance to make unique Content and Experiences
NFTs open the globe. Make one single or 10,000 of the same track. For more tailored fan experiences, you could sell albums, discographies, or album artwork as NFTs. On-chain items and concert tickets can also be brought.
Directly build an active Fan Base (and monetize it)
Musical NFTs make it possible for musicians to cultivate a following by providing a location where fans may access the particular NFTs that are associated with the artist’s body of work. For instance, events that involve NFT drops make it possible for musicians to reach audiences that were previously unreachable (and monetize them).
Potential downsides of music NFTs for artists
Even while there is a great deal of promise for NFTs in the music industry, it is essential to recognize that there are also some drawbacks that need to be taken into consideration.
Demand is hard to pin down
Record companies may help promote artists and create a fan base, which are two crucial aspects of the music industry. So, if an artist decides to bypass traditional record labels in favor of NFTs, it will be up to that artist to engage with fans and spread the word about their new releases. While this can be a boon for established artists with a large fan base, it can be a scary proposition for newcomers.
No physical distribution
Even though streaming and digital downloads are the main ways people get music these days, a big part of music sales around the world are still done physically. Many people who like to listen to music would rather get digital products than CDs, cassettes, or vinyl. So, by selling your creations as NFTs, you might be missing out on this market.
Music copyright may fill a book. If a musician sells NFTs, middlemen, managers, and record labels still control music distribution and consumption, which may cause issues. While NFTs may provide artists more flexibility, there are no clear rules about who owns the intellectual property of a music issued as an NFT.
In summary, HitPiece illegally advertised NFTs of songs and albums from John Lennon, Taylor Swift, Bob Dylan, and other independent artists for live sale. Creatives in the space worried that others were benefitting from their art without permission.
NFTs unquestionably provide musicians unprecedented freedom. NFTs appear to be the ideal platform for creators to gain control over their work and establish themselves as their own platform, thanks to their verifiable ownership, scarcity, and immutability.
However, it is worth noting that the NFT field is still in its infancy, and it is unknown how labels, music industry techs, and enterprises will respond to NFTs as they grow in popularity. They show a great deal of promise at the moment.