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How NFTs Impact the Music Industry in 2022 and in Future

Music NFT is one of the fast-growing trends in the music industry, even though many musicians and listeners still lack a clear understanding of the term. As the industry’s always been the early adopter of new technologies – starting from Vinyl and CD to today’s digital streaming services – the NFT transformation was anticipated to occur sooner or later. 

But what does it mean for music? That’s the question we’ll be answering today. 

In this article, we will be talking about what NFTs are in music and how they’re changing the music industry for the better. We’ve also included a guide on selling music NFTs which will help you get started with the process. And in the end, we’ll be discussing the top three NFT marketplaces for buying and selling NFTs.

What NFT Generally Means

NFT stands for Non-Fungible Token, the unique token of a digital asset stored on the Blockchain. Whether it’s a digital artwork, an ebook, or a song, it can be turned into an NFT and kept on the blockchain. 

However, that doesn’t mean that the original file, which can be in mp3 format, turns into some “NFT” format. When you create an NFT for a digital asset you own, a digital certificate proves your asset ownership is stored on the Blockchain. 

NFTs can’t be recreated or deleted. Because, even though you can duplicate the digital asset or delete it, NFTs are secured by the Blockchain, so you can never duplicate or forge the ownership status of the asset. If you have an NFT, no one can steal or take it from you unless you decide to sell or give it away. 

Let’s assume you want to buy a Leonardo da Vinci painting to hang in your living room. You can go to the local art store and get yourself a cheap printed copy for a few dollars, or you can try to buy one of the original paintings. 

Now, that would be much more expensive because you would own the original artwork, not some duplicated version. Simply put, that’s exactly the reason why people buy NFTs, as it’s the digital equivalent of owning the original version of artworks. 

After all, you can always take a screenshot of a digital painting and save it as your wallpaper. But that won’t be the same as actually owning the artwork.

What is NFT of Music?

To cut a long story short, music NFTs are soundtracks stored on the Blockchain in the form of tokens. 

The tokens serve as proof that those soundtracks belong exclusively to their owners. The owner can sell or transfer the NFT to another party, in which case the new owner receives the certificate of ownership. 

However, in the music industry, the term “music NFT” is used to refer to all kinds of tokens – whether fungible (multiple copies may exist and be owned by more than one person) or non-fungible (there can be only one copy and one owner). 

It might not even mean soundtracks, but other things associated with music such as album art, music videos, or official digital merchandise distributed by the artist. A noteworthy use case would be allowing fans to buy equity in their favorite artist’s NFT project, as we’re going to read about soon.

How Music NFTS Are Revolutionizing the Music Industry

In the music industry, only independent artists (popularly known as indie artists) get to interact with their fanbases directly as they are not signed with any commercial record labels. The rest of the artists have to rely on their record labels for everything – from how and when they can interact with their fans to sometimes even the kind of music they can make. 

The worst part is that when it comes to sharing revenue with artists, record labels and distribution platforms (like Spotify and Apple Music) always take the biggest slice of the pie. Artists don’t see a dime until all the third parties and go-betweens have taken their cut, after which there isn’t much left of it. 

But Blockchain can change it all. 

It can prevent record labels from distributing the profits to third-party platforms ensuring the revenue and royalties go directly to the artists. Since transparency and accountability are two of the main pillars of Blockchain, the artists will finally be in control of how their music is distributed. 

Last but not least, they will be able to even cut off the record labels and distributing platforms completely with the help of blockchain technology. The only reason why artists sign with record labels is that they take care of the headache that comes with distributing music and collecting revenues from various sources like merchandise sales – allowing artists to focus on their art. 

However, since music NFTs are essentially an ultra-sophisticated way to distribute music that doesn’t require any human intervention, artists won’t be needing record labels for music distribution and sales anymore. 

NFTS Can Take Artist-To-Fan Relationships to a Whole New Level

Generally, merchandise like autographed collectibles is sold through online shops or physical stores operated by the record label behind the artist, whether solely or in collaboration with another brand. Due to the heavily commercialized approach, the appeal of the artist’s official merchandise or even autographs get somewhat reduced that way. 

However, music NFTs don’t necessarily have to come from a record label, distribution platform, or any such commercial entity. The artists can distribute those to fans themselves, without involving any middlemen or third parties at all. 

It’s really special for fans because they get to receive souvenirs in the form of NFTs directly from their favorite artist, which can be compared to an artist handing an autographed t-shirt to their fan in person.

So, that’s how NFT can make the artist-to-fan relationship much more intimate and stronger than ever by making it a personalized experience for the fans. On top of that, it’s financially a more rewarding way for artists to distribute their souvenirs as well. 

Fans Will Be Able to Invest in the Bands and Artists They Believe In 

If you’re familiar with Kickstarter, you might already know what crowdfunding means. 

It’s basically a way for someone to raise funds for a project where like-minded people who resonate with the cause can invest through the crowdfunding platform. The platform makes sure the funds actually go to the project and takes a cut from it in return. 

Now, picture this, your favorite artist has tweeted that they’re going to crowdfund their next album, and every patron would get a percentage of the revenues in return. 

So, if you partake in the crowdfunding campaign, you will not only be supporting the making of the album but also get financially rewarded for it. It’s like how equity crowdfunding works for startups where investors receive a stake in the business in exchange for their investment.

This kind of fan-fueled crowdfunding can make music investment accessible for everyone and truly bring democratization to the music industry. It’ll especially be effective for the top artists with huge fanbases, where they can raise millions in funding with just an announcement on social media. 

Since artists’ works were previously financed by the record labels they were signed with, sharing profits with fans was never an option. But with the rise of NFT-fueled crowdfunding campaigns, music NFT projects can be a positive-sum game for everyone involved.

Opulous is one of the companies working on bringing this kind of decentralized finance to the entertainment industry.

Some Success Stories of NFTS in Music

3LAU

Justin David Blau, who goes by the stage name 3LAU, is a DJ and an EDM producer. To celebrate the third anniversary of his Ultraviolet album, he put up 33 music NFTs for sale. Among them, the most expensive ones were unreleased music, a custom song, a custom visual artwork based on his music, and new versions of 11 original songs that were in the album. 

Much to his surprise, his fans bought the NFTs at astounding prices. In total, Blau made $11.7 million from the auction, where the most expensive token was sold at $3.6 million. The only other NFT that was ever sold for more in an initial offering was a $6.6 million artwork by Beeple, a renowned digital artist in the NFT space. 

While this is very impressive and 3LAU’s huge success with NFT would surely pave the way for other musicians – it might have something to do with the fact that Blau makes, for lack of a better word, modern music whose audience is young and familiar with the crypto and NFT world. The concept of NFTs isn’t that hard to grasp for them, so music NFTs are not ahead of time for EDM fans. 

However, the learning curve might come across as steeper for people from older generations, as we will see in the next example. e

Kings of Leon

The alternative rock giant generated approximately $1.45-2 million in revenue through their NFT album sales, which was done in partnership with a crypto startup called Yellowheart. NFTs of the project were sold on OpenSea, currently the world’s largest NFT marketplace. 

The NFT collection was named “NFT Yourself” and contained the newest LP of the Kings of Leon, “When You See Yourself.” It was the band’s first album after a long break, so fans were very excited to buy the NFT album. To drive up the scarcity and hype the NFT up, even more, the American rock band had announced that unsold editions of the token would be destroyed after the auction.  

The priciest NFT of the collection was the Golden Ticket: Bandit #2 Wave, which included audio excerpts of the album and the lead single, “The Bandit.” It was sold for 89 ETH or $268,539 as of the time of writing. 

While the auction ultimately went great in the end, it did start off with a hitch. The band had to extend the auction for an additional 24 hours to allow more fans to partake in the offering since there weren’t enough bidders at the beginning. 

As the Kings of Leon wrote: “Many fans are first-time NFT buyers and are experiencing a learning curve.” 

Fans of Kings of Leon were still very new to NFTs, whereas 3LAU’s fans were already well-versed – which may explain the difference in the haul.

It’s Not All Rainbows and Butterflies: The Dark Sides of Music NFTS

Nika Roza Danilova, professionally known as Zola Jesus, has been making pop music for many years. After concert tours were put on hold for the unforeseeable future, she started experimenting with a new kind of NFTs – digital visuals with original music. 

Her first two NFTs weren’t financially very successful. Still, Danilova realized that the widely popular music tokens selling for millions of dollars were generally bought by wealthy people – who cared more about the monetary value of the NFTs than their artistic value. 

Or, in other words, fans who genuinely cared about the artist and their work were outbid by investors with deep pockets. 

As a musician who struggled a lot initially, the pop record producer knows how difficult it is for a musician to make money from their art with a small or non-existent fanbase. However, she’s not a big fan of having her fans as the investors of her work. 

When it comes to financially invest in something, no matter how emotionally attached the investor is to the project, things like expectations regarding Return Over Investment will always get involved.

Danilova is afraid that turning the fan-artist relationship into an investor-artist relationship might bring new pressure on the artists. 

The Creator’s Guide to Selling Music NFTS on OpenSea

We’ve picked OpenSea for this guide because it’s really popular in the NFT space and overall a good place to start for any beginner NFT creator.

That being said, the steps are more or less the same for other NFT marketplaces, so at the end of the day, it doesn’t really matter whether you use OpenSea or some other platform like AirNFTs.

Step 1 – Get Yourself a Metamask Wallet 

A Metamask wallet is free to set up and super convenient because you can use it in your Chrome browser by installing the Metamask browser extension. There’s a Metamask mobile app as well, available for both iOS and Android. 

Go to the official website <metamask.io/> and download the software on your desired device first (Chrome/iOS/Android). Then you’ll be prompted to create a new wallet or import an existing one. After that, enter the password and the secret recovery phrase, and you’re good to go! 

Deposit Some ETH Into It

Even if you don’t want to buy NFTs and only want to mint yours, you’ll need some cryptocurrency to get started initially. OpenSea charges a fee for creating every NFT collection, and there’s a gas fee you need to pay for minting your NFTs. 

Since gas fees tend to be pretty high, we strongly recommend having at least a few hundred dollars worth of cryptocurrency, which is ETH in this case, in your wallet before you start minting. 

You can use your credit card to add ETH to your Metamask wallet. Or, if you already have some ETH somewhere else (another wallet or a crypto exchange), you can transfer that to your Metamask wallet as well.

Create Your OpenSea Account

You have to set up an account and connect your Metamask wallet to it. You should have the Metamask wallet up and running before creating an OpenSea account because while it’s not required to create an account, you’ll need it to mint NFTs anyway. 

Mint Your Music NFTs

First, create a collection for your music NFTs where the minted NFTs would be added afterward. You can also create different collections for different NFT projects. If you want to publish two different albums as NFTs, it would be good to have them under different collections. Be noted that you’ll need to pay a one-time gas fee for each collection.

Then, go to the create page (hit the create button in the top menu), where you’ll be asked to upload the audio file and the cover art for the song along with the title. You can also add some other information like an external link to your website, a description, and technical details like genre or tempo. 

Select the collection(s) you created in the previous step for the NFT, so it will be live there after the minting is done. You also have to choose whether to mint on Ethereum or Polygon. While Ethereum has a high gas fee, it has far more users at the moment. On the other hand, Polygon has little to zero gas fees, but not many buyers are running on the Polygon blockchain. 

When you’re ready to mint the NFT, click the Create button at the end of the form. The gas fees, if any, will be deducted from your Metamask wallet automatically. 

List Your Music NFTs for Sale! 

After your music NFTs have been minted and added to your collection successfully, you can put them up for sale on OpenSea. 

It’s a pretty straightforward process. Click on your NFT, and you’ll find a Sell button in the upper right corner. Click on the button, and you’ll be asked to enter the quantity you want to sell and your preferred starting price (in ETH). Fill the form up, click sell and that’s all, your NFTs will be available for sale in the marketplace soon! 

Top 3 NFT Marketplaces for Buying and Selling Music NFTS

1. Nifty Gateway – The Exclusive One

Nifty Gateway started its journey in 2018 and was acquired by the Winklevoss twins (yes, the same brothers who sued Mark Zuckerberg in 2004 for stealing the idea of Facebook from them) in 2019. Shortly after the acquisition, the platform was revamped with the release of Nifty Gateway 2.0. 

It’s very popular among celebrities and musicians working on bringing their work to the NFT sphere. Some notable mentions would be Eminem, Beeple Justin Roiland, and Grimes.  

Due to the presence of these celebrities, Nifty Gateway is regarded as the go-to marketplace among collectors interested in music NFTs. While the platform boasts a wide range of music NFTs to choose from, they also offer other kinds of NFT artwork – making it a great choice for diversified collectors. 

Unfortunately, the NFT marketplace maintains an exclusive, invite-only status by requiring prospective artists to submit an application form and complete a short interview. The artists can only publish the artworks if they’re approved by the platform. 

Due to the condition that the minted NFT of an artist has to live up to the standards set by other prominent figures on Nifty Gateway, the entry bar is quite high there. That being said, the marketplace playing hard to get with artists only increases the value of the NFTs that made it past the vetting process. 

To wrap things up, Nifty Gateway is an awesome NFT marketplace for collectors who want to buy NFTs from the movers and shakers of the entertainment industry. However, if you’re a creator with a humble following, it might be a good idea for you to check out other marketplaces with a comparatively lower entry bar. 

OpenSea sits in the gray area between the high-profile platforms and the beginner-friendly platforms and also happens to be the largest NFT marketplace in the world. With over $10bn in total sales, there’s no doubt about its size and popularity among NFT enthusiasts. 

Initially, the platform was launched on the Ethereum blockchain network. But they currently support Polygon (formerly known as MATIC) too. If your NFT collection is MATIC-compatible, you can save a lot by avoiding the gas fees associated with Ethereum. 

As for the caliber of the collections, OpenSea has everything from the famous Board Ape Yacht Club to Neo Tokyo to even some NFT collection you’ve never heard of – since anyone can mint NFTs here without needing to meet any standards or whatsoever. 

Although that means anyone who wants to collect hidden gems has to comb through a lot of garbage NFTs, it also makes OpenSea the ideal NFT marketplace for budding NFT creators. 

The user interface is very easy-to-use. It supports most major crypto wallets, including MetaMask and Coinbase, further proving how newbie-friendly the marketplace is.

All in all, OpenSea is an excellent platform for both creators and collectors. While it specializes in Ethereum-based digital assets, you’ll find plenty of Polygon-based NFTs as well among the 80 million NFTs the platform offers.

3. AirNFTs – The Most Beginner-Friendly One

Being launched in 2019, AirNFT is way younger than OpenSea and Nifty Gateway. But interestingly, the NFT marketplace has already become a giant in the NFT sphere in such a short span of time. 

One of the reasons behind AirNFT’s popularity is its compatibility with two of the most popular blockchain networks for NFTs – Polygon (formerly known as MATIC) and BSC, which is operated by the largest crypto exchange in the world – Binance. 

Compared to Ethereum-based blockchain networks, the gas fees and transaction time are much lower in those networks. So, a music NFT that would’ve cost a little fortune in gas fees on OpenSea would be available for cheaper on AirNFT, making it the perfect NFT marketplace for those who don’t want to spend a lot in the beginning. 

It does come with a caveat, though. Due to the lack of the Ethereum-support, some of the most popular NFT collections like CryptoPunks are not available on AirNFT. The website has an intuitive user interface which is a breeze to use, and the entry bar is quite low as the only requirement for minting is that you have to have a crypto wallet. 

So, whether you’re a musician who wants to publish their first collection or a collector who’s looking for inexpensive NFT collections, AirNFT would be a great place to start. It is very beginner-friendly and boasts a great range of music NFT collections. 

The only real disadvantage for collectors is that it doesn’t have many popular NFT collections. If you’re not into hidden gems and rather buy a piece of the most popular NFT collections, OpenSea would be a better choice. 

Conclusion

Music NFTs are unleashing new possibilities for artists, allowing them to provide experiences for their fans that were never possible before. 

Additionally, with the rise of NFT and blockchain-based technologies like Smart Contracts and Decentralized Finance, it’s safe to say that the NFT movement will significantly contribute towards bringing democratization to the industry. On top of that, it’s also introducing new revenue models for musicians that solve one of the oldest problems in the book, artists never getting paid fairly.

Only time will tell how much of the buzz NFT projects are creating will turn to actual development. But music NFTs are here to stay – that’s something even the NFT speculators are certain about. 

Henry Hicks
Henry Hickshttps://nonfungibletalk.com
NFT and Crypto Enthusiast. Loves Travelling and Exploring the Metaverse!
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