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What Does NFT Music Mean: NFT in the Music Industry

What Does NFT Music Mean: NFT in the Music Industry

GamesPad: What Does NFT Music Mean: NFT in the Music Industry 1

The music industry has undergone significant changes in recent years. The total market revenue, covering recording, live performances, and publishing, is estimated at $20 billion.

As of 2022, streaming has become the dominant medium for music consumption, making up 84% of U.S. music industry revenues. The industry continues to evolve as digital media expands to include non-fungible tokens (NFTs).

Whether you love them or hate them, music NFT projects are redefining the industry by offering new approaches to ownership, monetization, and fan engagement.

How Do Music NFTs Work?

Future of music

Sorce: Freepik

NFTs are collectible digital assets verified through blockchain technology. Music NFTs work based on the same principle. Unlike the MP3 files you might have downloaded in the past, which could be copied and shared endlessly, or vinyl records and cassette tapes of which multiple copies could be made, a music unique token of a music NFT collection has a verifiable owner and cannot be replicated in the same way.

Music NFTs hit the right note in the industry when many artists and tech enthusiasts started exploring the potential of blockchain technology for music distribution. The concept was simple yet revolutionary: it allowed entertainers to sell their music in the form of a unique asset directly to fans, ensuring authenticity and value along with financial return.

Early adopters released limited-edition tracks, album art, and even virtual experiences using the new technology. These were more than just sales; they were events where invite-only could have access, exclusive content shared only with selected ones, and other special perks generating buzz and redefining the artist-fan relationship.

Music NFTs have now entered the mainstream, with major industry names jumping on the bandwagon. From exclusive NFT album releases to virtual concert tickets to see the favorite artists, NFTs are transforming our perception of music ownership and value.

Why Artists are Turning to Music NFTs

Non-fungible tokens as a way for an artist to communicate with fans

Source: Freepik

Music thrives on connection, and a key reason artists are embracing NFTs is the more direct relationship they create with their fans. By bypassing traditional platforms and intermediaries, artists can keep more of their sales revenue and foster deeper connections with their audience.

Music NFTs are reshaping the music space by emphasizing trust, transparency, and authenticity. They also offer the allure of rarity, allowing entertainers to release limited-edition tracks, exclusive behind-the-scenes content, free tickets, and virtual experiences. NFT owners covet these offerings, adding a layer of exclusivity that’s hard to replicate in the traditional music landscape.

NFTs offer artists a newfound autonomy over their creative works, transcending mere financial rewards. They empower artists to dictate the terms of sale to raise money, pricing, and distribution channels, effectively reclaiming control over their artistic output.

Moreover, NFTs revolutionize the industry by allowing artists to embed royalties into their creations, ensuring they receive a percentage of proceeds from secondary sales of their songs in the form of a non-fungible token – a game-changing feature in an industry where creators have historically been deprived of resale profits.

The Disruptive Force of Music NFTs: Opportunities and Obstacles

NFTs as an expression of art

Source: Freepik

The music industry has undergone a seismic shift with the advent of non-fungible tokens. Several artists have embraced this groundbreaking technology, unlocking new avenues for creative expression and fan engagement.

However, as with any disruptive innovation, the music NFT space presents its own set of challenges. Artists, particularly those without a strong technological background, often grapple with the complexities of minting NFTs, listing them on music NFT marketplaces, handling non-fungible digital assets in a digital wallet, and selling NFTs.

Navigating the intricacies of choosing the right platform, understanding associated fees, and ensuring digital asset security can be a daunting task. High-profile NFT drops have overwhelmed popular marketplaces, leading to outages that frustrate both artists and fans alike.

Legal ambiguities further complicate the NFT landscape, with copyright concerns and taxation issues posing potential legal and financial quagmires for artists.

Environmental concerns and challenges in ensuring artist royalties have also cast a shadow over the music NFT industry.

To achieve sustainable growth, the NFT industry must address these obstacles head-on. Simplifying the minting and selling processes, ensuring robust legal frameworks, and mitigating environmental impacts are crucial steps towards unlocking the full potential of this disruptive technology in the music industry.

Unraveling the Different Types of Music NFTs

Different types of tokens in the NFT sector

Source: Freepik

Music NFTs come in various forms, each with its own level of exclusivity and unique advantages.

  1. 1/1 NFT (One-of-One): A 1/1 NFT, or one-of-one, is a truly unique and exclusive item. Similar to a real-life painting, only one iteration of this NFT exists, making it incredibly rare and valuable. Consequently, 1/1 NFTs often command a higher price tag than other NFT editions due to their scarcity.
  2. Open Edition: An open edition NFT allows for an unlimited number of editions to be minted. However, it’s important not to confuse “open” with “unlimited.” Many open editions are only available for minting during a set period, and once that time window closes, no new NFTs can be created.
  3. Limited Edition: As the name suggests, a limited edition NFT is restricted to a predefined number of editions. In other words, a finite number of NFTs are available for minting. Many such collections consist of 10,000 editions.

Each type of NFT release comes with its own set of benefits and drawbacks. A 1/1 NFT increases scarcity, potentially driving up its value. Editions, on the other hand, have less scarcity but are generally better suited for community building and fostering fan loyalty. For instance, if an artist wishes to offer NFT holders exclusive benefits, such as ticket presales or subsequent drops, an edition NFT may be the more appropriate option.

Music NFTs versus Streaming Services: A Paradigm Shift

Buy music NFTs or subscribe to a streaming service?

Source: Freepik

While streaming platforms have ushered in a golden age for fans, granting them easy access to a vast musical library, the same cannot be said for artists, especially those in the independent scene. The current business models within the music industry seem to disproportionately benefit major labels and platforms, often at the expense of the very creators who are the lifeblood of the industry.

The harsh reality is that artists typically earn only $0.003 to $0.005 per stream. On Spotify, a $43 billion company, a mere 7,500 artists earn $100,000 or more per year. These figures highlight the imbalance, where streaming primarily benefits consumers and providers, leaving artists with meager earnings.

The NFT market, however, has introduced a new economic model, opening up avenues for creators to profit from their intellectual property without relying on third-party intermediaries. Moreover, thanks to the blockchain’s inherent mechanisms, NFTs allow creators to earn royalties from secondary sales of their digital tokens. These features empower musicians, enabling them to take ownership of their work and mitigate the problems associated with earning excessively low rates from centralized streaming services.

What Musicians Are Doing NFTs?

Live music crews or NFT artists?

Source: Freepik

One thing is certain: music NFTs will continue to transform the way musicians and fans collaborate to build community and art. Several unique NFT music collaborations have already launched and achieved great success. Here are some of the most popular ones:

Kings of Leon

Profits: Over $2.5 million.

The band’s initiative, NFT Yourself, offered the band’s current album, When You See Yourself, as an NFT, along with digital art and a collectible vinyl record. Other works of art based on the album’s concept were also sold, some of which came with additional advantages like lifetime front-row tickets to Kings of Leon concerts.


Profits: Over $7 million.

WarNymphs, Grimes’ 2021 NFT release, was more than simply music NFT; it was also a compilation of digitally made art and film matched to the music. On the NFT marketplace Nifty Gateway, a single unique item titled Death of the Old was auctioned for about $389,000.


Profits: Over $11.6 million.

Despite a small fan base and the auctioning of only 33 NFT-linked vinyl records, 3LAU made history in the music and blockchain industries by releasing the first blockchain-based album, Ultraviolet, in early 2021. The success of 3LAU demonstrates the value of knowing supply and demand, which brings us to our final issue.

Spottie WIFI

Profits: Over $192,000.

After purchasing CryptoPunk #5528 in 2021, Mig Mora (aka Spottie WIFI), became the world’s first and only CryptoPunk rapper. Mora then issued a seven-song EP in August 2021, limited to 2,000 copies. Each copy came with a surprise mint NFT, which allowed the buyer to have sync rights to the NFT’s master recording.

Whitney Houston

Profits: $999,999.

The music NFT marketplace OneOf placed an auction for Whitney Houston NFT. The asset included an unpublished demo tape of Houston when she was 17 and a digital video of Diana Sinclair, a 17-year-old critically regarded artist. The Whitney E. Houston Foundation received the proceeds from the collection’s sales.


While Coachella isn’t an artist, the music-centered event with worldwide popularity surely set some rules when it comes to revolutions in the music industry. Coachella announced plans for a multi-part NFT drop in collaboration with FTX crypto-exchange. Coachella Collectibles has a total of 11,010 NFTs spread across three collections, allowing fans to buy lifetime festival passes, unlock unique on-site experiences, physical collectibles, and more.

How to Make Music NFT and Capitalize on It?

Creating tokens for record deals

Source: Freepik

So, how is it possible to make music NFT? Here’s how a music NFT comes to life:

1. Setting goals

The musicians make all the decisions about their music NFTs. The first decision to make is about how much money they want to raise to understand how much of their royalties will need to be offered for their music NFTs and for how long.

Other goals, such as if they want to sell only one song or an entire catalog, are also essential to get the project started.

2. Submitting your catalog

An up-and-coming artist further needs to create an account to submit their catalog.

3. Reviewing instant offers

As soon as you’ve connected your accounts, one of the available investors may make you an immediate offer. These are speculative bids made by investors in the hopes that a forthcoming catalog will fulfill their conditions. If there’s a match, you’ll get an offer that you may accept right away and get paid within a few days.

You may either accept it or reject it and make a listing.

4. Listings

If you go for listing, your portfolio will be presented to the largest community of music investors, who will compete to offer you the greatest bargain.

5. Collecting the proceeds

The platform will take care of the paperwork and deposit the funds into your account.

Investments in Music NFT

Maybe you are an investor or a musician thinking about the wonder of the music NFTs business. Either way, the truth is that this is a new and thrilling trend that can end up in good profits, but sometimes it doesn’t.

If you’re considering putting some NFTs out in the market, you must keep in mind that the costs of launching a blockchain project can be expensive, and the same may be said about purchasing a music NFT. Marketplace costs, blockchain gas fees, and any royalties withheld by the artist when secondary transactions take place may diminish the resale earnings for an investor.

To enhance the chances of a profitable investment in music NFTs, the buyer should analyze successful NFT sales and observe how the supply of these tokens directly relates to the project’s eventual worth, aside from fan demand. In short, supply and demand are crucial factors to consider when purchasing music NFTs.

As musicians begin to experiment with NFTs and communicate with their fan base in a new way, the music business looks to be a new area for the crypto industry to disrupt. While artists can now consider the benefits of pursuing their own project versus more traditional methods of music distribution, investors can use this opportunity to expand their portfolio with this infant-stage new venture.

Where to Sell Music NFTs: NFT Marketplaces for Music

In recent years, NFTs or non-fungible tokens have gained in popularity as a way to represent unique digital assets, including music. As a result, NFT marketplaces for music have emerged as a burgeoning new industry, allowing musicians and rights holders to monetize and distribute their works in new and potentially lucrative ways.

One of the primary benefits of NFT marketplaces for music NFTs is that they allow creators and rights holders to sell and license their works directly to fans without the need for intermediaries such as record labels or streaming platforms. This gives musicians and artists greater control over their financial destiny and opens up new revenue streams beyond traditional music sales or streaming royalties.

Music NFT marketplaces for music also offer the opportunity for creators to experiment with new business models for distributing and monetizing their work. For example, they may choose to sell limited-edition music NFTs representing exclusive access to a live performance or a behind-the-scenes look at the creation of a new album or other exclusive events.

However, there are also challenges associated with marketplaces for music NFTs. One of the primary challenges is the need for a robust and secure platform that can ensure the authenticity of the digital assets being sold as music NFTs. This may require new technologies and standards to be developed to ensure the proper verification of ownership and rights.

Another challenge is the need for a legal and regulatory framework that can effectively handle the complex intellectual property issues associated with music NFTs. This may require collaboration between creators, music industry stakeholders, and lawmakers to ensure that NFTs are properly licensed and that intellectual property rights are respected.

Overall, NFT marketplaces for music present exciting new opportunities for creators and rights holders to monetize and distribute their works in innovative new ways. However, they also require careful consideration and planning to address the many legal and regulatory issues that come with the territory. With that in mind, we hope you’ve learned about what an NFT in music is.

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Disclaimer. This material should not be construed as a basis for making investment decisions or as a recommendation to participate in investment transactions. Trading digital assets may involve significant risks and can result in the loss of invested capital. Therefore, you must ensure that you fully understand the risk involved, consider your level of experience, investment objectives, and seek independent financial advice if necessary.