This article will take you through the world of music NFTs, how they plan on disrupting the music industry, how they’ve been performing so far, as well as potential risks.

Article Outline

• The History of Music NFTs

• How Music NFTs are Disrupting the Music Industry

• How Have Music NFTs Performed So Far?

• Potential Risks for Music NFTs

• What Are Some Popular Music NFT Collections?

• Closing Remarks

The History of Music NFTs

Being one of the oldest industries in the entertainment world, music has seen several technological advancements that have facilitated its wider adoption throughout time. The digitization of music allowed musicians to reach a bigger, more global audience, and gave individuals unlimited access to music from around the globe.

One of the first integrations of music in the NFT space was in February 2021, when Jacques Greene auctioned the publishing and music rights of his latest single “Promise” through Foundation. The track sold for 13 ETH (around $22,000 USD at the time).

Promise by Jacques Green, Foundation

“As we explore the possibilities of art on the chain and the promise of web3, we can maybe begin to let go of old systems.

This platform is a promise. You can buy the copyright here. In purchase you will own the publishing to the song, but I reserve the right to approval. That’s the promise.” - Jacques Greene

February 2021 also saw another major event in the Web3 music space, when 3LAU managed to raise $11.6 million USD through the auction of his 33 different NFTs called “Ultraviolet.”

This, at the time, had set new records in the NFT space for overall sales for a single NFT collection, as well as for the highest price paid for a single NFT (~$3.6 million USD).

March 2021 was also an interesting month for music NFTs with Catalog’s launch,  the first marketplace for music NFTs aiming at empowering independent artists by providing them with direct access to their audience and giving them 100% of their sales revenue.

The Web3 music space also saw some of its biggest events take place that same month with Gemini’s NFT marketplace, Nifty Gateway helping mainstream artists make the leap to Web3. Under their marketplace, Nifty Gateway helped Grimes (the WarNymph Collection, Vol. 1), Steve Aoki (Dream Catcher), The Weeknd (Remnant), and Eminem (SHADYCON) all launch NFT collections that would go on to sell out in minutes.

Kings of Leon would go on to become the first band to release an LP as an NFT that same month with their When You See Yourself album on YellowHeart, a Web3 ticketing platform. The collection would include exclusive versions of the album, unique digital artwork, as well as lifetime concert passes.

A wide range of innovation would follow in later months as music NFTs started taking the limelight. Don Diablo would go on to sell his first full-length concert film, called Destination Hexagonia, in the form of an NFT in April 2021. Vérité would become the first artist to auction 2.3% of her master recording rights in perpetuity that same month through her “by now” NFT.

In May 2021, Verdigris Ensemble would sell the first piece of classical music, titled “Betty’s Notebook” on the blockchain. BT released the first 24-hour song as an NFT on SuperRare, called genesis.json. Audius became the first Web3 streaming service to partner with TikTok in August 2021. TikTok would also join the NFT space with their own collection in September 2021, titled “Moments” and featuring Curtis Roach.

Bored Ape Yacht Club would throw its first Apefest during NFT NYC in October 2021 featuring artists such as The Strokes, Chris Rock, Questlove, Lil Baby, and Beck. Never-heard before tracks of 17 year old Whitney Houston would sell as NFTs in December 2021. Snoop Dogg would go on to release his first Death Row NFT mixtape, titled “Dogg on it: Death Row Mixtape Vol. 1” on OpenSea in February 2022. The collection offered full rights to their owners. Snoop would also release the second volume of his collection in April 2022. April 2022 also saw NFTs take over the Grammys with a free NFT collection launch as part of a 3 year plan to integrate NFTs into the Grammy experience.

Blue chip project, Doodles, announced they were onboarding Pharrell Williams as their Chief Brand Officer during NFT NYC 2022. The event also saw Eminem and Snoop Dogg premier an NFT-themed music video together, titled “From The D 2 The LBC” using their Bored Ape NFTs in the video.

How Music NFTs are Disrupting the Music Industry

Music NFTs can disrupt the music industry in a number of ways given their distinctive nature  and unique form of musical output, one that cannot be replicated or interchanged.

1/ Better Monetization for Artists

Although the emergence of streaming services has catapulted music’s adoption to the masses, giving music lovers easy access to almost any song they desire to listen to, it hasn't been very favorable to musicians. Current business models in the music industry tend to mostly reward labels and streaming services, often at the expense of musicians.

This is where music NFTs start by disrupting old business models. Music NFTs allow musicians to sell their music directly to consumers and keep a larger revenue share, in contrast to standard music streaming services that often pay artists a very small proportion of the overall money earned. Many struggling musicians might benefit from a financial increase through audio NFTs.

According to nftnow, the average revenue for artists is estimated at around $0.003 to $0.005 per stream. This means that while streaming services like Spotify become a $43 billion USD company, just about 7,500 of the platform's artists make $100,000 USD or more a year.

NFTs give rise to a new economic model that no longer benefits the middle man, but favors the creator instead. NFTs also enable creators to receive royalties from subsequent sales on secondary markets. NFTs, thus, help artists take back ownership of their work and combat the centralization of streaming services.

2/ Royalties for Fans & Artists

Typically, NFTs only certify the on-chain ownership of a token associated with a piece of  artwork, be it an image, video, or music. However, a handful of music platforms are trying to change that.

Royal, a popular music-related NFT marketplace, ​​allows fans to purchase royalty-bearing NFTs, called Limited Digital Assets (“LDA”). LDAs allow fans who hold the artist’s NFTs to earn a fixed percentage of revenue from all royalties made by the song (although there is potential risk of revenue sharing models being considered a security).

“Through collective ownership, artists have the opportunity to power their career, maintain control of their work, and connect with their biggest supporters.” - Royal

Another music-related NFT marketplace, Opulous, allows creators to earn royalties by staking their work on the platform and earning a share of their marketplace’s transaction fees. Opulous also allows artists to take out DeFi loans against the value of royalties they generate, enabling them to increase their returns - although DeFi risks remain.

3/ From Audience to Community

Music NFTs help facilitate the building of a closer and deeper connection between artists and fans. Instead of having to pay via a middleman (i.e. record labels or streaming services - both of which take a big cut off of every purchase/stream), fans can support their favorite artists directly by purchasing their music NFTs. This fosters a closer, more direct interaction between artists and their listeners, resulting in a thriving and supportive music community.

This enables artists to build a community of supporters, shifting the one-way relationships of fanbases to two-way communication streams between artist and audience. Given that many NFTs also tend to grant a list of perks to its holders, fans, in turn, have a bigger incentive to support the artists and music they enjoy.

Kevin Kelly, founder of Wired magazine, proposes the “1,000 True Fans Theory”, which states that instead of having to reach national or global levels of fame and status to be successful, artists are able to thrive with only 1,000 true fans. Web3 provides the tools needed for artists to foster a fanbase of 1,000 true fans.

4/ Music NFT DAOs

Additionally, decentralized autonomous organizations (“DAOs”) are changing the way music is created by taking over the role of the music label. Instead of being confined to music labels, artists can now seek the financial support of a music NFT DAO. NoiseDAO, for example, invests directly in artists, while MusicFund offers artists grants to produce their music. Audius, although not a DAO, also offers special grant programs to artists.

5/ Reducing Piracy

Furthermore, music NFTs can help combat piracy. Given the nature of NFTs - being non-fungible and stored on the public blockchain - it would be impossible for someone to unlawfully copy and distribute artists’ music. This is critical for the music business, as it is infamously known for its history of piracy.

LimeWire, a website that was once used to bypass royalty payments and pirate music online, nearly killing the music industry, has now come full circle and become one of the first open music and entertainment NFT marketplace for creators and collectors, where users can create, explore and trade unique digital collectibles with ease.

The music NFT landscape is wide and ever-expanding, allowing artists to truly explore their options and find the best suitable routes forward for themselves. Below is an extensive list of all the different sub-niches that currently exist for music on Web3.

How Have Music NFTs Performed So Far?

Despite the promising opportunities Web3 provides for the music industry, it has relatively yet to find the success that many other sub-niches in the space have found.

According to NFTGo, the NFT market currently has a total market value of $45 billion USD, while music NFTs only take up $97 million USD of this share (0.21% of the total market cap).

Music NFTs also see relatively low secondary volume when compared to other niches in the NFT space. While the wider NFT market has seen $1.4 billion USD of volume in the past 3 months, music NFTs have only seen $4.4 million USD, that is 0.31% of the entire NFT market volume. This might point towards a general lack of interest in music NFTs by consumers.

When reviewing the floor price of music NFT collections (with the highest volumes in the past 30 days) a pattern starts to emerge. Most of these collections have seen a downtrend in prices over the past month.

However, this does not apply to all music-related NFTs. In fact, some have seen a surge in volume and price over the past 30 days.

Interestingly,  the collections that have been gaining attention in the space are not collections launched by major record labels and/or studios (i.e. Probably A Label, launched by Probably Nothing and Warner Records), or access tokens for music enjoyers granting holders access to a form of utility (i.e. KINGSHIP and SAN Origin).

Instead, those gaining momentum in the music NFT space have all been collections launched by independent artists like Violetta Zironi, Sammy Arriaga, and Mija.

This further fortifies the suggestion that music NFTs can work as a great tool for independent artists that want to connect with their fans and expand their audience through the powers of Web3.

Potential Risks for Music NFTs

Despite the ever growing promise of Web3 being the place where independent artists can thrive, it is still a space considered in its infancy with many moving and changing parts and multiple risks.

For example, the royalty debate has been surfacing in the NFT space with many marketplaces choosing to move away from paying artists and creators royalties in favor of gaining market share.

Centralized record labels are not likely to allow NFTs to take off as they constitute a big threat to their business models - similar to how centralized gaming studios, like Steam, banned NFTs from their marketplace.

There is also the question of whether or not NFTs will rise to mainstream adoption and whether already successful mainstream artists will embrace the new technology or get burnt by it.

Lastly, unlike the way Reddit introduced a seamless transition for its users to Web3 technology (i.e. crypto wallets, payments methods, etc.), resulting in a surge of mainstream adoption, music NFTs are yet to accomplish that. Specialized music marketplaces will need to facilitate the adoption of normies via an easy to use and navigate UX.

What Are Some Popular Music NFT Collections?

1/ KINGSHIP

KINGSHIP is a collection of 5,000 key cards that unlock access to the world of KINGSHIP, a supergroup consisting of Bored Apes and a Mutant Ape named Captain (vocals, bass), KING (lead vocals), Arnell (beats, drums, producer), and Hud (guitar, keys, vocals).

The project was founded by 10:22 PM and is supported by a team of seven times Grammy Award-winning record producers, songwriters, artists, a celebrity animator, and well-respected founders.

Membership comes in the form of four varying Key Cards, all providing access to music, exclusive content, and token-gates experiences. The collection has seen a total volume of 1,700 ETH on secondary markets (~$2 million USD) and currently sits at a floor price of 0.0644 ETH (~$77 USD).

2/ Moonshot by Violetta Zironi

Founded by Violetta Zironi, an Italian singer and part-time actress,  Moonshot is a collection of 2,500 unique NFTs with traits hand-drawn by her father, Giuseppe Zironi, a renowned Disney illustrator.

NFT holders of Moonshot receive a free mint from the next music NFT collection from Violetta as well as a list of perks depending on how many of Violetta’s NFTs are held. Holders of all 5 of Violetta’s songs receive lifetime access to free tickets to any of her concerts, as well as free vinyls, signed posters, and IRL experiences.

The collection has seen a total of 187 ETH in trading volume on secondary (~$225,000 USD) and sits at a price of 0.21 ETH (~$250 USD).

3/ PIXELATED by Sammy Arriaga

PIXELATED is a collection of 4,000 PFP/Music NFTs founded by Web3 singer and songwriter Sammy Arriaga.

“PIXELATED” contains a variety of 12 unique songs composed by Sammy Arriaga about the concept of digital affection and loving someone, pixel for pixel. Holders of the NFT receive a commercial license for both the artwork of their NFT as well as the music attached to it.

The collection has seen a total of 48 ETH in secondary volume (~$57,600 USD) and currently sits at a floor price of 0.069 ETH (~$80 USD).

4/ Probably A Label

Founded by Probably Nothing and Warner Records, Probably A Label is a collection of 5,555 NFTs that give its holders access to an intellectual property (“IP”) incubation studio, drops and more.

“We believe music best comes alive when there’s context people can connect to emotionally.

We see ourselves as creators that help artists rewrite those stories using the power of digital collectibles.

Web3 allows artists to create with more freedom and connect with fans on a much deeper level - our mission is to live at the intersection of that culture.” - Probably A Label

The collection has seen a total of 720 ETH in secondary trading volume (~$860,000 USD) with a current floor price of 0.026 ETH (~$30 USD).

5/ WVRPS by WarpSound (Official)

WVRPS are a collection of 9,999 hybrids between AI-composed music and generative profile picture (“PFP”) NFTs. The collection is based on WarpSound virtual artists Nayomi, Gnar Heart, and DJ Dragoon, with art drawn by Emmy Award-winning illustrator, Andy Poon.

Each WVRP has its own AI-composed original musical fingerprint determined by a combination of its base character and its trait / rarity configurations, creating a unique sound and style for every WVRPS.

“WVRPS are the opening note of WarpSound’s larger vision for interactive, social music experience, helping ignite the future of generative music creativity + synthetic artistry.” - WarpSound

The collection has seen a total of 6,150 ETH in trading volume (~$7.4 million USD) and sits at a floor of 0.06 ETH (~$70 USD).

Closing Remarks

TL;DR

Here are the summarized points made throughout this article:

• One of the first integrations of music in the NFT space was in February 2021, when Jacques Greene auctioned the publishing and music rights of his latest single “Promise” through Foundation. The space later saw a series of advancements in music NFTs with 3LAU, Catalog, Nifty Gateway, and Kings of Leon.

• Music NFTs provide many advantages for artists and fans: it allows for better monetization for artists by cutting out the middleman; it allows fans the ability to directly connect and invest in their favorite artists; it allows artists to create stronger, better connected communities; it provides opportunities for independent artists through Music NFT DAOs; it helps reduce piracy of artists’ songs and works.

• Despite the promising opportunities Web3 provides for the music industry, it has relatively yet to find the success that many other sub-niches in the space have found. The music NFT genre only constitutes 0.21% of wider NFT market’s market value, as well as 0.31% of its total volume in the past 3 months.

• Despite a lot of music NFT collections having lost much of their value in the market, collections that are artist-centered have been gaining attention and increasing in value, further further fortifying the belief that music NFTs can work as a great tool for independent artists that want to connect with their fans and expand their audience through the powers of Web3.

• KINGSHIP, Moonshot by Violetta Zironi, PIXELATED by Sammy Arriaga, Probably A Label, and WVRPS by WarpSound (Official) are all interesting collections that stand in the center of the music NFT space.

At OriginsNFT we leverage data-driven decision making, educational resources, and proprietary analytics to remain ahead of the curve with respect to blockchain tech and specifically NFTs. To find out more, please visit our website or Twitter.

To purchase a pass, please visit our OpenSea page.