The trading market for Music NFT is not very active these days. Why is that? This article won't take you on a journey to find out, but it will give you some personal opinions.

Why should I buy Music NFT?

It's almost March and I've been in contact with Music NFT for just about a year. My main factor in liking Music NFT was the love of music, but unknowingly I was attracted by the price in the secondary market. Now I have time to really enjoy music again, music that you can listen to for free on Web3 music players like Spinamp, Future Tape, Ooh La La, and even on Spotify you can hear. So why should I buy it?

People often say that buying Music NFT is supporting their favorite artists, and this view is correct. The traditional model for supporting artists can probably be divided into buying tickets to shows, buying musicians' records and buying other peripheral merchandise from artists. Obviously, buying Music NFT is now the most fashionable approach. However, there is a difference between Music NFT and the traditional support model, and that difference is the "marginal cost". What is "marginal cost"? In economic terms, marginal cost is the incremental cost of each new unit of product produced (or purchased). In layman's terms, "marginal cost" refers to the amount of money, time, etc. that it takes to produce something. This is an inaccurate term, but it's a good way to put it.

The traditional model of supporting artists

Artists have to pay a lot of money to prepare for their shows, perform on stage, travel, accommodation and venue fees, etc. Fans pay for the tickets. Artists who release records need to apply for copyright numbers, find factories to produce them, and even tour the country with a box of records to sell. Artists selling peripheral merchandise need to find factories to produce and bring boxes of clothes to sell nationwide, and fans pay for the peripheral merchandise. If you pick the time after producing the music and design until the merchandise is sold, then the marginal cost paid by the musician must be greater than zero. And the "marginal cost" decreases only after a certain amount of production. So in the traditional model, the consumer is paying for the cost and service.

Music NFT supports the artist model

Unlike Music NFTs, where the "marginal cost" is almost zero, the cost for Artists to produce Music NFTs is theoretically only the Gas Fee when interacting with contracts on the Ethereum network, so in my opinion, the purpose of buying Music NFTs is collectability, communication with the artist and other rewards, besides the goodness of the music itself. The ability to prove that Music NFTs are limited and who they belong to is one of the things I like most about Music NFTs on the Ethereum network. Other rewards include records, peripherals, and other rewards that the artist can give to collectors, all based on blockchain traceability, proving that you are indeed a fan.

Music NFT needs to be reformed?

Based on the condition that marginal cost is 0, there are theoretically infinite music in the Music NFT market. People are used to paying for physical goods because they subconsciously know the labor of production (mostly reflected in empathy for the factors of labor production). And Music NFT does not make collectors feel the hard work of the production process. So the Music NFT market is now at a stage where the demand side can't keep up with the supply side. At this time, the solution usually comes in two directions - demand-side reform and supply-side reform.

Demand-side reform

I think Sound's recently launched referral reward mechanism is one of them. After purchasing through a link shared by a sharer, the sharer can get 5% of the price paid. This will encourage people who are now within the market to promote Music NFT and thus create more demand.

If you choose to look at the time period when Music NFT was hot, the way to create demand then was simple - there was money to be made. Music NFT was very active for about a few cycles during this year time, when it attracted a lot of speculators who didn't love music, and even robots. But when, the tide went out, most of those who remained were loyal fans of Music NFT.

What to do to create demand?

First of all, in the present, the simple Music NFT is not so attractive anymore. So it needs some tricks to give different collectors different fun rewards. This will attract some people who are interested in the rewards proposed by the artist to join. These tricks obviously depend on the artist's imagination and execution.

Second, integration with other tracks. In today's Web3 space, all sorts of new things are popping up all the time. What do you think music NFT+GameFi can do? Musicians can collaborate with some GameFi communities to come up with theme songs, thus bridging the needs of different tracks. What should Music NFT+PFP do and do PFP projects need a community song? Something like this, linking different groups, in some form, together is what will create more demand.

Also, I know it's hard to add in the needs of non-Web3 users. But is it possible to do something common to make more non-Web3 users understand Web3 to understand music NFT? Show tickets NFT might be one way, but it's not the whole story, and I believe every artist who is in Web3 uses his or her imagination to create more demand.

Supply-side reform

The easiest reform at the moment is, to adjust the price and the number of tickets on sale. I think the supply-side reform has been tried a long time ago. And of course that includes making quality music, not crude music.

Most obviously, when any artist adjusts the on-sale price to 0, the music NFT always sells out. You might think I'm funny, why bring this up? Because there are too many Free Mint in the ethereum network, but not many of them manage to have people buy them. Because Free Mint is also required to pay Gas Fee. So it's good news that there are people buying Free Mint in the Music NFT market right now. But I've noticed that there are fewer Free Mint lately. As far as I can remember, the last time the Music NFT market was active was precisely the time when the mood was mobilized by many musicians raiding Free Mint releases.

In terms of the number of tweaks, we've recently seen the emergence of Open Editions, which have the benefit of not being up for grabs, buying as many as you want, and being unlimited for a limited time. But as you can see, there are still a lot of musicians who have Open Editions that no one is buying.

What can be done to improve the supply side?

First, improve the quality of music in Music NFT. For music lovers, good songs depend on different people. Here I don't take whether it is good or not as the music standard to judge the quality of music, I think music with heart is the standard to judge the quality of music. A heartfelt song can resonate, if the future hair music NFT while making music, this obviously deviates from the original intention, and will not become high-quality music.

Second, try Free Mint. through Free Mint to re-engage the market sentiment, so that more people understand the music NFT, and even understand the music. Use Free Mint as a promotional tool, but remember moderation; excessive Free Mint will deplete the value of Music NFT's collection.

Also, limited quantities. Go back to a limited release and set an appropriate price. Ensure the collectability of Music NFT.

Supply and demand integration development

Artist-community co-creation is a viable solution for the creator economy that can really grow with Web3. Artists create their own community and communicate fully with their fans, and finally co-create with the community to gain revenue together. So this is a great test of the artist's creativity, imagination, organization and execution. We hope that artists who are capable and with willing to try will think about how to mobilize community resources to create more interesting and meaningful things. The music NFT market lacks such cases of co-creation, so let's wait and see!

Finally

Hamburglar Genesis Edition has the last 5 days of sales left, and anyone with a copy of Hamburglar Genesis Edition will get a future Podcast NFT airdrop with just my own voice! Here are the Hamburglar fan credentials, so if you like me, you can purchase one. If you hate me, you can also buy one and in the future you can short my Podcast NFT releases.

My Podcast show is called Web3 Burger Music, and episode 0 will go live on the Chinese podcast platform on March 1st CST, along with the release of Podcast NFT.