Bankless: Will the music NFT track become the next big trend?
Original source: Bankless
Original source: Bankless
Original compilation: 0x4648, TechFlow Friends
In 2021, it feels like the world is overwhelming with art NFTs.
Creators realize they can connect directly with their most ardent fans, rather than relying on intermediaries who extract a lot of value from their hard work.
In the current evolution, this is what NFT stands for: a direct connection between creators and fans, thereby creating a closer relationship between creating value and capturing value.
But we only see the explosion of NFT in the art world. There are creators all over the world: writers, musicians, videographers, designers, artists, and more.
They will all benefit from digital ownership and NFTs.
We've seen some of these platforms take off, such as Mirror Protocol for writers, but much of their potential remains unrealized.
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Source: Logan Craig
A new field has emerged for NFT. An area with the greatest potential for mainstream acceptance.
Music NFTs are collectible audio files.
They gave fans the opportunity to collect their favorite songs, and now thanks to web3 comes digital scarcity.
Collecting music is not new, but collecting music online is.
Just like we collect vinyl records, burn CDs, or make playlists, music NFTs provide a new medium to curate your tastes through access to potential creative works and their creators. In the traditional world,Music collectibles represent a $5 billion market. In the digital world, the sky is the limit.
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A new monetization model
Music NFT is a new monetization model for artists.
Essentially, music NFTs are simple digital collectibles. They have no inherent ownership and exist only as an asset that can be bought and sold by collectors.
In a world largely dominated by streaming and touring, music NFTs give artists leverage by building a community of superfans eager to collect scarce digital goods.
Platforms like Royal are exploring licensed music NFTs, but in this article, we focus on music NFTs as collectibles.
Collectibles offer the most direct and easiest monetization mechanism, as there are no regulatory hurdles when the artist owns 100% of the rights.
For those lesser known, traditional streaming platforms like Spotify,Pay around $3,700 per million streams.
Music NFTs, by contrast, sell for thousands of dollars — a strong case for building a community in web3 over playing digital games on Spotify.
While sales of music NFTs are largely dependent on the macro state of the cryptocurrency, the benefits of having a pool of professional collectors with superfans are real in any market condition. This is a direct monetization model for digging out one hundred real fans of an artist.
You don’t need to be a big star to make a living — just have a few loyal fans, and music NFTs can maximize your earning potential. They are the cornerstone of the Creator DAO and the first step towards a music microeconomy.
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Overview of music NFT projects
Zoom in to see, there are currently several platforms leading the music NFT trend.
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Catalog
Catalogis a 1/1 music NFT marketplace.
Similar to SuperRare or Foundation, all NFTs are 1/1 creations - meaning no other copies of the song will ever be minted (in theory). Catalog, based on the Zora protocol, is the first marketplace designed specifically for collecting audio.
So far, Catalog sales have exceeded $2 million, with an average selling price of $3,707.
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Spotify earnings calculated at $0.0037 per stream, ETH at $2800
On average, top web3 artists earn 7.5x what they expect to earn in a year from Spotify streaming selling music NFTs.
This makes it clear: independent artists can make more with music NFTs than streaming. Just as importantly, this is totally extra — selling music NFTs doesn’t affect your streaming revenue.
Broadly speaking, the average catalog sale currently translates to about one million streams on Spotify. With no base platform fees, 100% of sales go back to creators.
And those sales are just getting started. Catalog is starting to experience hockey-style growth, with monthly sales in the six-figure range,Average selling price is on the riseimage description
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Sound
Soundis a music NFT marketplace that offers different versions instead of 1/1.
Each release has a listening party where collectors can collect NFTs after listening to the full track and be able to post comments on the track.
Favorites appear on the Audience tab - giving them the spotlight and the right to be featured early on. When the Sound NFT is sold on the secondary market, the rights to this comment box are also sold.
After 30 consecutive sales, the prices of all Sound NFTs are priced on the basis of 0.1 ETH. This means that each Sound NFT is equivalent to 75,000 Spotify streams, and each sold stream is worth more than 1.8 million standard 25-version streams combined.
It is worth mentioning that Daniel Allan released 100 versions of his EP "Overstimulated", all of which were sold out within one minute, bringing in 10 ETH in revenue. For reference, the newly released EP has only generated an estimated $444 on Spotify so far.
The lower price point leaves more room for secondary market action, offering the first glimpse of why the drop is a Schelling Point for new collectors.
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source:https://dune.xyz/0xnative/Sound-Music-NFTs
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A collectible music NFT fan is worth almost 100 times the value of Spotify's last month's listeners. averagely:
1 Catalog NFT = 1000000+ streams
1 Sound NFT = 2500000+ streams
This shows the leverage of music NFT as a monetization model for independent artists. It allows collectors to value their work today, rather than pinning their hopes on a hit song or waiting for streaming fees to roll in. If it's good music, collectors will buy it at a price they recognize.
The number of music NFT releases is increasing, the number of unique artists minting NFTs is increasing, and the number of unique collectors is increasing. But it's still tiny relative to the rest of the NFT market.
Music NFT will usher in a major breakthrough.
Looking at last month’s volume, the combined primary and secondary sales of Catalog and Sound accounted for less than $1 million, accounting for only 0.015% of OpenSea’s NFT volume.
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dual earning
For artists releasing music NFTs, you need to balance both.
While financial success can be expected for web3 artists, it is equally important to have a growing footprint in web2.
Web3 lets you focus on fan quality. Web2 lets you focus on the number of followers.
This relationship of converting a new web2 fan into a new web3 collector is the greatest opportunity an independent artist has today.
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what to pay attention to
For those keeping up with the music NFT landscape, here are the key platforms to watch in the coming weeks.
1) Royal sold their first drop with Nas.
2) Monstercat's new music NFT project - Relics - will be released on February 4th.
3) The mint price of Arpeggi in the first quarter is 0.6 ETH.
4) DoomsdayX partnered with Haleek Maul to release a music NFT producer pass worth 200 ETH.
5) Glass Protocol is working with artists to release music videos as collectible NFTs.
6) Omgkirby sold their Genesis NFT for the community-led LoFi project.
Keep an eye on Water & Music and NFTNow for trends and research on the new age of music.
future outlook
future outlook
Imagine being able to bet on your favorite artist early in their career.
With music NFT, this future is not far away.
While today we are exploring ways to collect music, this cycle will inevitably lead to a full-fledged DAO economy, where artists transfer a percentage of all sales to a community-led treasury.
If you haven't found out already, community treasuries usually generate tokens usually.
Taking Daniel Allan and his Overstimulated EP as an example, we should expect to see more artist DAOs in the near future.
Until then, let those music NFTs fly for a while and start collecting.
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