Music NFT: How NFTs Can Transform the Music Industry
When speaking about NFTs, digital art images and collectibles are often what first come to mind. Yet, many other NFT trends have since evolved, from gaming NFTs to NFT TV shows. And with the revelation of Snoop Dogg incorporating NFT into Death Row Records, the music NFT seems set to be the next big NFT trend.
But what exactly is the buzz around it? How is buying a music NFT different from purchasing music from the iTunes library or Amazon? When you buy from the usual online platforms, you’re only purchasing the right to listen to the music. If you buy a music NFT, you actually own it.
There’s so much more that the music NFT can do than simply transferring ownership to the people. Its potential for changing the music industry is boundless. Read on to better understand how NFTs can revolutionize the music industry and shape our future.
What Is a Music NFT?
NFTs, or non-fungible tokens, are built on blockchains. Each NFT is unique, as there’s only one token for each asset. This is unlike fungible tokens, which can be further divided into smaller units. NFTs can be used in various industries, of which the music industry is just one.
Music NFTs are a new way to collect, sell and share music. A music NFT is a unique, one-of-a-kind token that can be sold on the blockchain as a song, a music video, or even a whole NFT album.
These tokens can be used as currency for concert tickets, merchandise, etc. Unlike typical cryptocurrencies, NFTs are indivisible, thus allowing artists to create and sell unique art pieces in exchange for cryptocurrency.
They are also a way for musicians to monetize their work by creating unique digital assets, which can be traded on NFT marketplaces. On some music NFT platforms like Royal, the artists can even earn royalties each time the NFT is sold, as the previous ownership right has been recorded in the blockchain.
By purchasing and owning music NFTs, music lovers can show their love and support for an artist — while also getting some financial benefit from their ownership. When you buy a music NFT, you're not just buying a digital file — you’re buying something unique to you, which no one else has. You can also trade your music NFT with other fans or resell it.
How Do Music NFTs Work?
Let’s look at how music NFTs work. First, an artist creates a unique piece of music. Then, they transform that music into an asset by attaching it to a blockchain (such as Ethereum, which uses smart contracts to manage data transactions between users and other parties without relying on a central authority.
Music NFTs can then be purchased online, and used however the buyer wishes. Thus, the music becomes part of the blockchain — making it secure and immutable, so no one can ever copy or steal it from the owner.
Each NFT token is unique, and is linked to one song or other composition from an artist's catalog. This allows users who own the token to access the piece that it represents.
As a music NFT creator, you can also decide the number of copies that will exist of your song, and sell those copies through an exchange. Once people buy those copies from you, they can trade them on any crypto exchange that supports NFT trading.
For instance, if someone owns a token representing Grime's song "Death of the Old," with the highest bid amounting to almost $400K, they can listen to that specific version of "Death of the Old" whenever they want.
As more people buy copies of a song, copies available for sale reduce, thereby increasing the value of the NFT.
How Can Music NFTs Change the Music Industry?
Since a music NFT is a distinctive type of musical art that cannot be replicated or interchanged, music NFTs can transform the music sector in several ways.
For one, they can help artists better monetize their work. Unlike traditional music streaming services, which typically pay artists a very small percentage of the total revenue generated, music NFTs enable musicians to directly sell their music to fans and retain a greater revenue share. Audio NFTs can furnish a much-needed boost to the incomes of many struggling musicians.
Additionally, music NFTs can help reduce piracy. Since each NFT is unique and cannot be replicated, it would be difficult for people to illegally copy and distribute album art. This advantage is crucial for the music industry, which has been struggling to combat piracy for many years.
Finally, music NFTs help to create a more direct connection between artists and token holders. Instead of going through an intermediary, like a record label or streaming service, fans are able to directly promote the artists they love by purchasing their music NFTs. This creates an intimate, direct relationship between artists and their fans, leading to a vibrant and supportive music community.
Overall, music NFTs have the potential to positively transform the music industry for both creators and listeners, boosting artist incomes, reducing piracy, and creating a direct and supportive relationship between musicians and fans.
Music NFT Marketplaces
The largest NFT marketplace, OpenSea, has its own dedicated collection of music NFTs. Other popular NFT marketplaces to consider are Rarible and Nifty Gateway. LimeWire and Catalog provide a niche service for those wishing to invest purely in music NFTs.
Music creators might be interested in marketplaces that focus support on the artists. The leading platforms for NFT royalties are Royal and Opulous.
On Royal, creators co-own their music with their fans. This allows both artists and fans to earn royalties every time a work is sold. On Opulus, creators can earn royalties from their work by staking it on the platform and earning a share of the platform's transaction fees. Both Royal and Opulous provide artists with a new way to earn royalties on their work.
Music NFT DAOs
Decentralized autonomous organizations (DAOs) are also reshaping the way music is produced. Instead of a music label being in charge of an artist’s music direction, DAOs provide a platform for everyone to cooperate in a less hierarchical manner.
Music DAOs operate similarly to music fandoms. The fans not only support the music by buying it, but they also further support the musician’s creative process. Placing all their different strengths together, the contributors can work together to build up their favorite artist’s image — and amass even greater success together.
There are different types of music DAOs. Some, like NoiseDAO, invest directly in the artists, while others such as MusicFund offer grants. And while not a DAO, Audius — a decentralized music and streaming platform — also has a special grants program for music artists.
How to Invest in Music NFTs
As an artist, you can create NFTs and sell them to fans and investors. As an investor, you can purchase NFTs from artists and resell them for a profit, or use your digital assets as a consumer. NFTs offer a unique and innovative way to invest in music.
However, one should be mindful when investing in music NFTs. First, it's important to do your research about the technology involved in the working of digital assets. Second, be sure to diversify your investments, and don't put all your eggs in one basket. Lastly, don't be afraid to experiment. The world of NFTs is still new, and there are numerous unexplored opportunities for those ready to take a risk.
How to Create and Sell Music NFTs
To create an NFT, you'll first need to create a digital file for the music. This can be done using virtual audio editing software. Once you have the digital file, you'll need to upload it to a blockchain platform that supports NFTs. There are several different platforms to choose from, with the most popular one being Ethereum. Other blockchains on which can create music NFTs are Fantom and Polygon.
Once your music is uploaded to a blockchain platform, you'll need to create a smart contract. This contract will specify the terms of your sale, including the price of the music and how it will be delivered to the buyer. Once the contract is created, you'll need to mint your NFT. This is the process of creating a unique token that represents your music file.
Once the NFT is minted, you can start selling it to fans. You can do this directly, or list it on an NFT marketplace. If you're a musician, you may be wondering how you can create a music NFT album — like the Kings of Leon did. Here's how to get started:
First, you'll need to create your music NFT(s) by connecting your crypto wallet to your chosen blockchain app. Once you've created your NFT, list it for sale on a marketplace like OpenSea. Be sure to check on the gas fees and marketplace fees required for minting your NFT to ensure that you’re well compensated.
When someone buys one of your music NFTs, they'll receive a token that gives them access to your music. They can then play, share or resell your music as they please.
So, if you’d like to cash in on the NFT craze, creating and selling music NFTs is an ideal place to begin. Your music NFTs could potentially become collectors' items one day!
The Future of NFTs and Music
The music sector is in a constant state of evolution. As the digitalization of music has progressed, the music industry has reached sensational heights. NFTs can radically transform both the music industry, and the way exclusive content is consumed and distributed.
One no longer has to relinquish their ownership and music direction to major labels, distributors or streaming companies. Musicians and fans can build an even more intimate relationship through music NFT DAOs. All of this means unlimited potential for creativity in the music industry.