18 February 2023 10:41, UTC
Reading time: ~7 m
NFTs are mostly known in the field of fine art where they ushered in the so-called crypto art movement, but non-fungible tokens can also be used in the music industry.
What are NFTs and why do they have high potential in crypto art
NFT stands for Non-Fungible Token, that is, something unique that cannot be replaced by another token because no two are the same.
In other words, an NFT is digital content that represents real-world objects such as artwork, music, games, and collections of any kind.
Those who buy a non-fungible token are not only buying the work itself, but more importantly, the ability to prove a right to the work: in fact, the NFT performs the function of being a certificate of authenticity and ownership of an artwork or otherwise a digital file.
The characteristics of NFTs related to the world of music, not just crypto art
Although there are still plenty of people who associate non-fungible tokens exclusively with digital images, there are many other categories applicable to this rapidly growing field. One of these is undoubtedly the music industry.
Since these are non-fungible tokens, in order to invest and buy these assets it is recommended to own a crypto wallet, which can be opened for free, in a few simple steps, such as Binance, Bitkeep or MetaMask.
Even in the music world we have begun to observe a gradual approach by musicians, producers and famous DJs to this new technological frontier.
Just as with art, it works the same way for music as far as NFTs are concerned. That is, the registration on the blockchain of each individual NFT goes through two main stages.
At the time of creation and initial registration on the blockchain, the creator of the NFT is included in the distributed ledger, and from that moment on, his or her ownership as the creator of that particular NFT will be incontrovertible.
At a later date, the distributed blockchain ledger will contain all the ownership transitions of that NFT work subsumed by the various trades. In this way, this secure technology, as it is distributed and encrypted, finds perfect application in music.
The best NFT platforms in music
Among the best platforms for music NFTs, we find Crypto.com. Specifically, this is a unique platform for cryptocurrencies and NFTs, featuring the lowest fees on the web and numerous NFT auctions.
Then, we have Huobi Global and Bitget, which contain many categories of NFTs.
Huobi, in particular, is a rapidly expanding platform, while Bitget recently has been listing many NFT projects.
There is also Coinbase, with very user-friendly design, a P2P marketplace, and high growth potential.
Last but not least is OpenSea, the pioneer of NFTs with very high popularity and ideal for collectors and enthusiasts.
Expert opinion on music NFTs and the royalty discussion
The music market and industry have always been particularly sensitive to technological innovations, think of mediums such as cassette tapes, later transformed into CD-ROMs and then finally leaving the physical aspect behind and becoming a fully digital good.
The discussion regarding “royalties” received by artists also arises as a pillar of this decentralized revolution. Even though, to date, music NFTs do not involve the distribution of royalties, there are platforms that are already moving in this direction.
We can confirm that the perspective taken by the music industry is strongly attracted to NFTs and blockchain technology, and we might expect that in a few months we will start to talk more and more about “MusicFi” as has happened in other areas such as crypto art and GameFi.
Major musicians and bands that have launched music NFTs
Two idols of the crypto community, Snoop Dogg and Eminem, have been avid fans of NFTs for years. Proud owners of several Bored Ape Yacht Clubs and Mutant Ape Yacht Clubs, the two rappers saw NFT music as a way to improve the recording industry and overhaul the relationship between fan and artist.
Thus, the two rap legends released a new music video in collaboration with Yuga Labs, where they impersonate their Ape.
Snoop Dogg also has several NFT music projects under his belt, and has put 25 thousand albums on sale in the form of non-fungible tokens for $5 thousand.
These NFTs, called Stash Box, contain his new album B.O.D.R. with 3 bonus tracks for fans.
Shawn Mendes, the pop singer who became famous with his hit Stitches, has also jumped into the crypto world with Genies, an NFT platform that creates 3D characters that can be used in various metaverses. He released on OpenSea a collection of NFTs inspired by his best-selling album, Wonder, and also some digital wearables to show off on their virtual avatars.
Mike Shinoda, vocalist for Linkin Park, has also joined the trend of musical NFTs. The lead singer of the legendary band held an NFT auction of a music clip from his single Zora. He also sold NFTs with exclusive artwork from another of his singles, Happy Endings.
On the Italian scene, Marco Castoldi, aka Morgan, obtained $21,000 for the song “Premessa della premessa,” which was put up for sale on the OpenSea platform. Muse, one of the most beloved bands of all time, also experimented with their first album in the NFT format, in collaboration with CryptoKitties.
Finally, there are Kings of Leon, whose tokenized album and related NFTs generated sales of at least $1.45 million in the first five days.
However, a representative for the band estimates revenues to be more than $2 million: of that amount, $600,000 will go to the Crew Nation Fund to support live music bands affected by the pandemic.
How NFTs could change the music world
In the age of streaming, several self-distribution services such as Spotify and YouTube allow anyone to distribute their music independently. Labels have lost their production and distribution monopolies, but they continue to be experts in marketing and financing music.
As this is the case, there are still many artists who choose to sign contracts with companies and give up large sums of money. But how can NFTs and Web3 change the music industry and solve its problems?
In the traditional music industry, record companies control the ability to determine the success of artists and the distribution of royalties, but as Web3 infrastructure and technologies improve, power could shift from intermediaries to musicians and fans.
Compared to traditional digital music distribution, NFTs offer unlimited possibilities. Music streaming sites only give users the right to listen to acquired recordings, but do not offer ownership.
Unlike music streaming services, NFTs grant buyers exclusive or shared ownership of the reserved NFT file. By definition, NFT music is exclusive and irreplaceable and is rapidly becoming a highly sought-after collector’s item.
NFT files can be auctioned off by musicians or sold directly to fans who pay with Bitcoin, Ethereum and other cryptocurrencies. This gives a lot of power back to artists, who now have another method to market their art or other digital retail without relying on middlemen or third parties.
Moreover, with the advent of the metaverse era, concerns are also coming to the music business. Indeed, artists, music labels, managers, and event organizers are all trying to find new ways to connect with fans and adapt to the new environment and technologies.
Specifically, key consumer-driven industries such as gaming, retail, music, and entertainment are on the verge of explosive growth and change.
One of the first virtual concerts on Roblox saw Lil Nas X play for 33 million people over the course of two days and four shows. The Fortnite Rift Tour, led by Ariana Grande, on the other hand, was enjoyed by 27.7 million people.