An Overview of Music NFTs

An Overview of Music NFTs

Introduction

NFT or a non-fungible token is a unique digital asset on the blockchain that can be bought or sold. The
NFT movement has spread to various forms of entertainment, including art, videos, souvenirs, in-game
items, and music. Visual art has been the major medium that has witnessed billions of dollars in volume,
with ongoing expansion in both size and players. Profile photos (PFPs), collectibles etc. have all
generated buzz in the art of NFTs. Music NFTs, however, are more nuanced and multifaceted, providing
additional opportunities for producers and listeners.


Music NFTs add a visual and a musical component to NFTs. Music NFT, simply put, is an NFT linked to
music. This music can be a song, an album, a video or a generative piece of music. Unlike static images,
audio content is dynamic and takes multiple iterations of sound, story and production value to realize
its full potential. However, the influence of NFTs on music looks to be something that both artists and
developers are attempting to determine, as NFTs present musicians with the increased possibility to
access additional channels of revenue and opportunity, including the addition of fans. The market is
rapidly building a consensus that NFTs will restructure the music industry by transforming how music is
generated and consumed.


As the popularity of music streaming has expanded, so have music NFTs. Music streaming on platforms
like Spotify, iTunes etc., has reduced musicians’ earnings. If you simply buy a piece of music from iTunes,
you own the right to listen to that music, but with music NFTs, this music gets converted to an asset that,
once owned as an NFT, confers multiple rights to the holder.
Music NFTs hold the power to transform the artist’s career and growth. They open new avenues of
income and growth for the artists, who are now not dependent on specific deals. And not just the artist,
they offer a system where the fans get rewarded too. The fans can play a role in the musician’s success
through their contribution and investment in the early stage of an artist’s career.


How will Music NFTs change the dynamic of the Industry?

Music NFT is linked to the music it represents and gives access to music concerts, album covers, and
much more.

NFT Music Ecosystem

Music NFT Projects

AudiusAn Overview of Music NFTs - Global Coin Research* Music-sharing and streaming platform built on the Solana blockchain.
* Aims to connect artists with their fans and ensure that most of the revenue goes to the artist rather than an agency in the middle, as in the web2 world.
* Audius also runs a DAO that gives audio grants to artists.
* Token is called $AUDIO and offers features like governance rights, APR from staking, artist interaction etc.
* The FDV of the token stands at ~ $230mn and has seen a substantial correction of over 50% in the last year. The number of users has also been depleting or stagnant in the last 1 year. The reduced interest could be attributed to the $6mn hack faced by the platform in July this year.
FanTigerFanTiger - An Overview of Music NFTs - Global Coin Research* A decentralized music label that powers the artist-fan community using NFTs.
* Calls itself India’s largest music NFT marketplace.
* Music artists can sell their music NFTs to fans and use the funds generated for their growth purposes -marketing, promotions, branding, building community etc.
* For the fans and holders of these NFTs, they get a number of exclusive benefits & also earn from royalties.
* Artists can raise capital for the production of their songs and, in return, provide exclusive rights & revenue share to their community.
RoyalRoyal - An Overview of Music NFTs - Global Coin Research* Royal is an on-chain NFT music platform that allows fans to purchase music rights in the form of NFTs.
* Enables fans to be a part of the artist’s journey by selling song rights as NFTs, allowing anyone to own
a piece of their favorite musicians’ songs and earn royalties with the artist
* Assists artists in creating royalty-bearing NFTs known as Limited Digital Assets or LDAs. LDAs allow fans
who own NFTs to share revenue from streaming royalties.
* Each Royal token represents a percentage of streaming service royalties. The specific percentage also depends on the tier of the token purchased by the collector. The greater the tier, the greater the royalty payment.
* Artists can customize their music NFTs with fan experiences, special tracks, digital art, and more. The streaming royalties can then be purchased directly from artists by fans as tokens.
* Founded by DJ Justin Blau (popularly known as 3LAU) and Opendoor co-founder JD Ross in May ’21. Royal also did a funding round of $55mn in 2020 from investors like a16z, Coinbase ventures, Paradigm etc.
The Great Wave
The Great Wave - An Overview of Music NFTs
* Music NFT project that aims to bring together artists, fans, developers and investors.
* The Great Wave (TGW) is structured as a DAO, which helps artists have a say in business decisions, music releases etc., along with a higher earning potential from their music.
* The token is called $WAV but comes with limited utility as the usage is for DAO voting, liquidity provisioning and staking.
* The project is still working on onboarding more users. The FDV stands at ~ $340mn.
* The Great Wave conducted their first major concert “Charlie Lim & The Great Wave” in Sept’22. The attendees of the show were given a chance to purchase Great Wave’s governance NFT. Apart from that, top stakers were given a chance to VVIP box access for the concert along with meet and greet.
Gala Music
Gala Music - An Overview of Music NFTs - Global Coin Research
* A music-focused NFT and streaming service by Gala Games.
* By becoming a Gala Music Node, users can become a streaming service. Node owners are required to host NFT music purchased from the marketplace on. The node owners are thus able to earn from streams when someone plays the song in that node.
* Gala’s streaming app allows music fans to listen to music. When a user plays a song, the network searches for nodes that have the track. After that, the software will select the node with the lowest latency and stream it to the user.
* The system mints $0.1 Gala Music Tokens for each track played. The newly minted tokens are distributed as follows:
45% is split evenly among all the owners of the NFT track
10% to all Music Nodes that are online
5% goes to the specific node that streamed the song
50% goes to the artist
* Gala Music had Snoop Dogg releasing his first NFT album on Gala Music, called Back On Death Row (B.O.D.R)

Not just these specific projects, but there is a lot more work being done in growing the music NFT space
along with ancillary services.


If we look at some top artists launching their music NFTs, these would include names like Grimes, 3LAU,
Steve Aoki, Deadmau5 and Kings of Leon.


There are several marketplaces as well that house these NFTs – a major one being Catalog, the primary
marketplace for single-edition music NFTs on the Zora protocol. A few other names include sound.xyz,
which is different from the others as it gives an option to mint editions of music NFT; Foundation, Arpeggi
and FormFunction are a few other names. Some platforms are also split based on the type of music
NFTs, like Groovetime has dance music NFTs, Beat Foundry is for minting generative music NFTs etc.
Another interesting feature linked to music NFTs is Music NFT DAOs, which are also starting to gain
traction as these DAOs give grants to artists. For example, MusicFund membership is distributed via
NFTs, and holders vote each month to donate ETH to three musicians via the community fund.


Challenges

Although this is a new idea and a new way to make money, a few problems make it less than ideal for
working with music NFTs. If an artist decided only to sell their music through NFTs, they would be unable
to make a lucrative deal out of it and might struggle to gain popularity. Some of the apparent
challenges are as follows:


Discoverability – As we are in the very nascent stages of the web3 era, music discovery for artists will
continue to depend on mainstream channels, with additional tactics that have been popularized, like
Tiktok, Instagram, Spotify, etc. For native NFT artists, discovery is limited as there just aren’t many users
on these platforms compared to the incumbent services.


Insignificant play for established artists – At this point, there could be collectors who may continue to be
NFT whales but might not be actual fans, making it difficult to gauge whether the reading on the
appetite for music NFTs is precise and significant enough. Also, big artists with the star power to garner
significant mass to buy their NFTs do not spend time cultivating community or utility around their NFT
drops. These artists and their teams pay more attention to their existing fans because they can make
more money.


Music Rights – In the traditional music industry, music rights issues are complicated and hard to
understand. Record labels on the master track or album rights are not very easily figured out, and artists
have very few rights. With Music NFTs, these rights will be divided and given to Investment DAOs and
early investors. It would take more work to determine who owns the music and make decisions. Even
though it would help and allow artists to own their rights, which is not the case right now, many layers
still need to be cleared up before it can be solved.


To add to these, there are more generic challenges of acceptability of NFTs among the general masses,
a clear understanding & knowledge of utility and value and the very thrust to be involved in the artist’s
success.


Final Word on Music NFTs

Even though moving something to the blockchain has its own problems, it is interesting to explore
tokenized solutions for the music industry. Artists and major record labels are already trying new things
on different chains and platforms. More than 50 music NFT projects are actively trying to sell NFTs or
bring artists on board. It is also clear that people want music NFTs more and more, no matter what form
they take. Additionally, artists are also trying new methods to monetize, and fans have the ability to
become true investors. Regardless of the music NFT impact, artists who have signed to record labels are
missing out on revenue taken up by the label and even lose rights to their IP in the process. In the new,
improved music industry, we’ll see artists regain the power to control their art and revenue streams and
share it with their consumers, and their fans.


References:


This article was written by : Curated X// In collaboration with: Global Coin Research

Leave a Reply

Your email address will not be published. Required fields are marked *

More from GCR

mysten labs gcr

Uncategorized

Why GCR Invested in Mysten ...

Introduction As the Crypto and Web3 industry continues to gain momentum, there is a growing need for platforms that can make it easy for people ...

kevin rose hack

GCR Exclusive Insights NFT

How Kevin Rose is Updating ...

Kevin Rose, CEO and co-founder of non-fungible token (NFT) collective Proof, recently suffered a hack in his personal NFT wallet. In response, he has devised ...

Global Coin Research 2023 Market Outlook

Featured GCR Announcement GCR Exclusive Premium

GCR’s 2023 Outlook

We go over our 2022 portfolio health, and then share each GCR Deal Leads’ outlook for 2023. Quick 2022 Overview In 2022, GCR invested in ...