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Music NFTs

What Happened to Music NFTs?

Posted on 3 September 2023
Music NFTs

It was only last year when Pitchfork published an article on how NFTs are shaping the way music sounds, and Rolling Stone pegged them as the ultimate way for artists at all levels to monetise their music, so what happened to music NFTs? How many NFT holders have as much buyer’s regret as Justin Bieber after he purchased a Bored Ape NFT for $1.3 million back in 2022, only for it to lose 95% of its value? And perhaps, most importantly, will they ever make a comeback?

In this article, we will answer all the above questions to give independent artists and music fans looking to support the careers of their favourite artists a no-bullshit account of where the NFT market currently stands. But first, we will give a brief introduction to music NFTs, which work a little differently from your standard NFT.

What is a Music NFT?

In short, music non-fungible tokens (NFTs) are distinct digital assets that are issued on a blockchain (a distributed ledger that contains a growing list of records, referred to as blocks), which are tied to a single, EP, album, entire discography, or video clip. NFTs can also represent everything from gig tickets to passes to money can’t buy virtual experiences to exclusive merc.

The hype around Music NFTs started to amass due to the unfairness of the distribution of wealth in the music industry. In 2023, the global revenue of the music industry is expected to surpass $65 billion, but the vast majority of those funds will pour into the pockets of major labels and platforms instead of the cups of songwriters and musicians.

The pipedream of an idea was that music fans could replace the oligarch record labels, and more direct connections could be created between independent artists and their fans. Unfortunately, as you can probably gather from the radio silence on the subject of music NFTs, the revolution was a lie.

Where Did Music NFTs Go Wrong?

With Music NFTs came the promise of an income revolution, and we have to admit to getting swept up in it originally. When Justin Blau and Justin Ross founded the music NFT marketplace, Royal, gave NFT owners’ rights to the songs sold on the platform and enabled artists to decide the percentage of royalties, we were stoked to anticipate the financial opportunities for independent artists and the profiteering middlemen cut out of the royalty equation. Here are just a few reasons why NFTs couldn’t help the average independent musician.

  1. Crypto Volatility

The value of the cryptocurrencies used to purchase NFTs is volatile. The most popular cryptocurrency used to purchase NFTs is Ethereum, while it isn’t completely impossible to buy NFTs with fiat currencies by using credit and debit cards, the vast majority of NFT marketplaces require you to hold cryptocurrencies. For example, at its peak in November 2021, 1 Ethereum token was valued at over £3k. By January 2022, its value almost halved and at the time of writing, 1 Ethereum token is worth £1297.57. Holding crypto is a great way to see your life savings wiped out overnight. Regardless of what the crypto bros say.

Ethereum Price Prediction 2023: When Will The Bear Market End? Watch This Key Pattern - Bitcoinsensus

  1. The Inaccessibility of the Web3 World

Unless you only go to see house DJs perform and buy tickets to grime gigs, you will have probably noticed that the average music fan tends to be in an older demographic. Many indie, rock, punk and metal fanbases are ageing populations, and can you really see the average Gen X or boomer music fan getting to grips with the Web3 world of cryptocurrencies and NFTs so they can support their favourite artists?

The ’50 Quid Bloke’ is used to heading down to their favourite record store or affixing themselves to eBay every Sunday evening to pick up tangible wares they can use in music-centric rituals. They are also the most likely to have a negative reaction to the introduction of new technology that they can’t quite wrap their heads around and break into a “back in my day diatribe”. In 2023, YouGov and Consensys discovered that only 34% of the people they surveyed had ever heard of an NFT. But apparently, Gen Z is dumb because they don’t know how we used to burn CDs on our PCs or how cassette tapes used to function.

WHEN MUSIC wasn't "In The Cloud" - Audiophile News & Music Review

  1. Only the Richer are Getting Richer

In 2022, a survey discovered that most NFT buyers invest in NFTs to make money. However, almost the same percentage lose money. Only 14.7% were interested in investing in a community, and even fewer respondents reported that they bought NFTs just to own a digital asset. So, the fans are operating at a loss, but what about independent musicians who are already scratching a living and stretching their resources thin to monetise their music? Yeah, they’re screwed too.

Grimes may have been able to make more money than she has ever made in her career via NFTs, but she has also spent years integrating herself into the type of communities that would be interested in NFTs. She’s digitalising everything, and if her latest single, I Wanna Be Software, is anything to go by, that is still not enough to sate her digital desires.

The Takeaway

Unless, as an independent artist, you have time to indoctrinate yourself into the Web3 world and you are already backed by a hardcore community of fans who are likely to engage in that world with you, it is unlikely that music NFTs are going to come along and save your career. The only musicians making millions are the musicians who were making millions (or near to that mark) before NFTs became a massive phenomenon.

With that being said, there is something to learn from the rise and fall of music NFTs; community and fan power are everything. There are other ways to enable your fans to back you. Take Kickstarter campaigns to fund new albums, and platforms such as Patreon as the perfect example. Learn more about how to harness the power of your fans here.

Article by Amelia Vandergast

Music NFTs in 2023: Hit or Miss?

Posted on 6 February 2023
Music NFTs

In 2021 and 2022, there was ample speculation about NFTs defining the future of the music industry. Following the Crypto crash in 2022, after many of the staple coins hit record highs, confidence in crypto plummeted further than its value. However, industry insiders remain adamant that crypto isn’t dead yet. Despite 72% of institutional traders giving crypto a wide berth in 2023.

For music NFTs to come back with a bang, the branding issues, amplified by the crash, that surround them need to be addressed before NFT technology can take off in any way. Let alone a big one.

Many still see NFTs as a Ponzi scheme. While others can’t move beyond the misconception that they are just over-priced, worthless, and replicable digital images. Furthermore, those who take an active interest in crypto and NFTS are instantly dismissed as crypto bros. Keeping the tradition of scepticism around emerging technology alive.

Despite the many benefits and innovations that the web3 world can bring about in the industry, there will always be uninformed music fans ridiculing the premise of it. It is so much easier to dismiss it with a salty laugh-react on Facebook rather than spend the time to get to grips with it before forming an informed opinion.

What is a Music NFT?

In the simplest terms, music NFTs are a way of tokenizing collectable music files on the open market.

Generally, music NFTs fall into two distinct categories:

  1. Ownership-based NFTs tied to intellectual property rights and royalties. Which allow owners of the NFTs to accrue revenue produced by Web2 streaming platforms, including Apple Music and Spotify.
  2. Patronage-based NFTs, which do not share ownership rights with holders, but can be held to support artists’ careers.

NFT Innovations Needed to Bring them Into the Mainstream

When Music NFTs and NFTs, in general, took off in 2021, they were exciting, but they were far from perfect, which mostly boils down to marketing, their utility, and the insane and inaccessible for many costs.

For example, NFTs became a promising way of providing access to events or exclusive perks, such as the entire back catalogue of an artist’s music and unreleased music. However, it was impractical for many to get involved with blockchain technology to purchase NFTS and gain benefits.

Confoundingly, many NFT peddlers attached four or five-figure price tags to the jpegs. That is without mentioning how the musicians willing to adopt them were torn asunder for attempting to market them on social media. Undoubtedly, many artists saw the sarcastic massacres and vowed to never put themselves in that position. We can’t blame them.

Going forward, NFT creators need to ensure the cost needs to be justified by the utility. For this to happen, the whole cost around the technology needs to be lowered before it becomes mass-adopted and part of daily life. High starting points have always been part of the course for all new technology. For example, in the two years following the introduction of DVD players in 1997, they dropped $200 in value from their original $500 price tag. Now, you can pick one up for peanuts.

Meet Spottie WiFi, the CryptoPunk Rapper Who Made $192,000 in 60 Seconds | Complex

How Music NFTs are Helping Independent Artists to Monetize Their Careers

The music industry would be almost utopic if royalties reflected the work put in and major record labels didn’t have a massive monopoly over it and sought to control every aspect of an artist’s career. Artists who are completely happy with the state of the industry in 2023 are practically unicorns. Something needs to change. And no matter how much people want to revert to the way things are, they need to take their rose-tinted glasses off and realise that the 70s – 90s weren’t so ideal for the majority of the artists. The independent artists trying to get a break in the industry were simply invisible to the mainstream population.

In the oversaturated creative space, building a dedicated fanbase while managing everything else, including writing, recording, touring, marketing, and merchandising, requires an almost Herculean amount of effort.

NFTs entered the industry as a refreshing way for fans to directly support artists while simultaneously adding brand-new sustainability to their income streams. For the artists willing to adopt the technology, it was a lifeline after the COVID-19 pandemic evaporated income via more traditional means. Prior to the 2020 lockdown, touring was up there as the number one revenue stream for many artists. Even in 2023, the appetite for live music lacks its bite after music fans readjusted without music and can’t seem to make it fit in the same way it used to. For many, heading out to live shows is an extra piece in a jigsaw that just doesn’t have a place.

NFT Music: How it works and why it will change music industry - NFTaxo

The Indian hip-hop artist, Jay Kila, was one of the many artists willing to take a shot on NFT technology after realising that an NFT sale worth $300 could take ten years to accrue on streaming royalties alone. In 2021, Spotify boasted how it paid $7 billion to artists. More cloak and dagger was the fact that most of that cash went into the pockets of record labels and never reached the artists.

In an era when even music venues are taking a cut from artists’ merch sales when they are out on tour, it is about time that artists were able to get paid their dues without someone else profiting off the back of them.

Kila claims that NFTs emerged as a last line of hope for independent artists looking for a way to directly generate income. Its ability to take money away from the corporate middlemen and disrupt the music industry, which has kept the cats fat and the artists starving, is another reason why the mainstream industry is determined to keep the technology within the minority. Record label execs used to be at the forefront of pioneering music technology. As blockchain technology won’t serve to keep them elitist rich, they are sitting on the sidelines for this one.

Despite the power of the major record labels, it has always been the music fans that fuel the careers of musicians. As NFTs can help to build and maintain those relationships, artists can’t continue to overlook the technology as a means to a more profitable end.

Article by Amelia Vandergast

The Crypto Crash Burst the Music NFT Bubble. Here’s What All Artists Can Learn from the Rise & Fall

Posted on 23 July 2022
Music NFTs

Web3 and music NFTs were primed to be one of the biggest trends in the music industry in 2022. Some of us dared to dream of a digital world where artists could operate free from the money-grabbing middlemen, exploitative platforms, and generally just the crushing weight of capitalism. That vision was shattered by a crash that showed us the true volatility of the market. The optimism was sweet while it lasted, but reality quickly soured it, and the tears of all the investors now at a loss salted it.

The foundations were laid for a more egalitarian music industry when sites such as Royal.io, SongVest and Royal Exchange launched. However, NFT holders keen to invest in their favourite artists weren’t immune from the cryptocurrency cash. In January 2022, NFT sales peaked at $12.6 billion before plummeting to just over $1 billion in June. For context, some of the big ticket NTFs, such as GIFs from the Bored Ape Yacht Club, dropped in value by 60% between May 2022 and June 2022.

The music NFT market was never perfect. The ecological impact from the NFT carbon footprints was enough to raise alarm bells. The volatility of the markets meant that people could only invest what they were prepared to lose. Many music fans were priced out by the tokens, and their utility certainly didn’t match their value.

So, no great loss, right? Not quite. There were several notable innovations and moves in the music industry that happened alongside the frivolous acquisitions of ridiculously expensive NFTS. The Whitney Houston NFT containing an unreleased demo which was recorded when she was 17 selling for $999,999 was never going to equate to adequate income for independent artists. But there are lessons to be learnt from the digital trends that echoed around NFTs.

A Retrospectively Realistic Review of Music NFTs for Independent Artist

Throughout the hype over music NFTs, it became evident that they were for the few, not the many. The few people with excessive money to burn and the few artists with the ability to make their fans fetishize everything they touch.

During the economic crisis that is shifting the comfortable into discomfort and evaporating the notion of disposable income, it’s a stretch to ask music fans to purchase a t-shirt, CD, or £5 gig ticket. Let alone make high-risk investments in their music careers via NFT.

At this stage in the game, it should go without saying, taking music NFTs off the table while promoting independent music and building your brand is a sensible move but don’t forget what initially triggered the love, fascination and novelty of music NFTs.

The true beauty of NFTs included their ability to act as collectable keys to digital archives curated by artists, they gave the thrill of exclusive content, and they became an incredible way of beating the ticket touts by acting as gig tickets.

The Legacy That NFTs Should Leave Behind

Before we get into it, for clarity, we’d like to emphasise that in the context of music, NFTs aren’t just a piece of digital art that can easily be copied and shared. The irreplicable digital asset, which exists on a blockchain, is ideal for storing and sharing music, videos, and artwork with NFT holders.

In one (not so simple) transaction for the average Web2 user, fans could own exclusive bonus tracks or entire discographies, collect keys to music communities, earn royalties from the music they invest in and receive perpetual perks courtesy of the gratified artist.  Even if you abstract crypto, NFTs and Web3 possibilities from the equation, the short stint of success of the music NFT market highlighted a few things for every independent artist to take away.

Scarcity Sells, Create It

Even though many like to believe that humans are the most advanced species on earth, when it comes to possessions, we’re no better than magpies looking for the shiniest objects to take back to our nests. The case for species superiority weakens even more when our obsession with hierarchies is called into question.

Just anthropomorphise a silverback mountain gorilla trying to gain dominance in the jungle based on what they own in the ether on their metaphorical iPhone to get the picture; that is where we are in 2022; chasing scarcity, out of want, instead of need. Because when you chase scarce necessity, that is desperation, but when you financially scurry after a marked-up luxury, that is a privilege that you can flash to the rest of society to prove you are worthy of following.

Like numbered limited edition vinyl records or rare first pressings, NFTs were briefly great at triggering a sense of scarcity amongst digital consumers. It isn’t the non-sentient NFTs’ fault that they beckoned people into status/dick swinging contests of people proving they have ludicrous money to burn. Independent artists can curse the sociologically warped marketplace, or they can learn the value of exclusive products and content.

For example, incentivise physical sales of your music by including bonus material that isn’t online on limited-edition releases or send exclusive previews to members of a mailing list. Maybe don’t go as far as Fyre Festival on creating FOMO, but don’t be afraid to use it to your advantage.

Music Will Always Be More Than Just a Transaction

A massive part of the appeal of music NFTs were the special privileges that came through NFT ownership, which could be everything from exclusive content to custom content to royalties to naming rights on songs. Around NFTs, artists got more inventive than ever before with how they could thank fans for their loyalty and increase engagement and excitement. There is little room to wonder why so many got caught up in the ill investment frenzy. Honestly, artists should be funding their NFT investors’ therapy at this point.

We’re not saying that all independent artists should be out of pocket to offer freebies to their fans. We are saying that for any remote shot of success in the contemporary industry, you will have to stop treating music as a commodity you throw out in the world and realise the power of building connections. Artist & fan connection was the key driver behind the multi-million-pound music NFT market. And time after time, we see the artists that truly care about their fans thrive with cult like followings. You don’t need to be the next Jim Jones, just don’t think you’re above thanking the people you rely on for success.

If Snoop Dogg has his way, the Web3 world will be back with an appealing vengeance. Until then, bring the perks of NFTs to your fans, without asking them to stump up insane cash for the privilege of recognising their loyalty.

Amelia Vandergast

The viral Australian singer-songwriter Jacob Lee has launched his community-driven NFT, The Familee Key

Posted on 21 January 2022
Jacob Lee

The independent singer-songwriter Jacob Lee’s career has been nothing but exemplary. A few hallmarks of his resounding success include garnering 255 million streams on YouTube and 195 million on Spotify with his three EPs, six studio albums and 140 music videos.

Though his viral success undoubtedly rests on his songwriting finesse and soundscapes that haunt you while simultaneously consoling you, his fans played a major role in allowing him to achieve such a coveted status on the airwaves. Now, he’s looking to give back to his fanbase through NFT projects and giving his fans creative licence on his up and coming album. After four successful NFT drops (Conscience Cards, Lowly’s Personal Parchments, Jacob Lee’s Music Archive, Lowly’s Library of Lyricism), he’s set to launch his most exciting NFT drop to date.

The Familee Key NFT is a community-driven NFT which is set to launch on January 21st, 2022. It offers exclusive access to Jacob Lee’s creative ecosystem. All holders of the Familee Key NFT will receive early access to all upcoming music, free entry to shows, pre-sale access to upcoming NFTs and a myriad of additional perks. This NFT will act as Jacob Lee’s official artist token – it is 100% free and accessible on the WAX Blockchain with YoshiDrops.com.

Another date for Jacob Lee’s fans’ diaries is January 24th, 2022. It will see the launch of the Demons Digital Vinyl & Music Video NFT. His single, Demons, has become a playlist staple for over 50 million people globally. The artfully emotional single which opens his 2019 album, Philosophy, brings nuance to the conversation around trauma, abuse and healing. Lyrical vindication for the psychologically scorned (and isn’t that us all?) doesn’t get much sweeter. The Vinyl and music video will be available for all Familee Key NFT holders.

Check out Jacob Lee’s Web 3 store here, or head over to his official merch store.

To find out more about developments in the fast-paced NFT music space, join our on:beat artist development platform.

Amelia Vandergast