We believe in music NFTs. There’s a lot to be excited about: a new take on community interaction, discovery and most importantly, a way for artists who aren’t selling out arenas to create, share and monetize premium content. New, interesting use cases are popping up each day, an area we touched in our tutorial on building your own token-gated music NFT app.
Labels and musicians are helping music NFTs break through with platforms like Serenade and Gala Music, but is the future of music really on the blockchain? And if this is truly going to change how artists create and distribute music, what needs to happen for widespread adoption?
The Music Industry is Letting Artists Down
“If we got paid a meaningful income from streaming, that could be a weekly grocery shop; it could contribute to your rent or your mortgage when you need it the most.” - Nadine Shah
Music NFTs and other ways to help artists make money are severely needed. Chart toppers like Harry Styles and The Weeknd are doing fine. But most artists, even with dedicated fan bases, are barely getting by. According to Ditto Music, Spotify pays artists between $0.003 to $0.005 per stream on average. That means that in order to get $5,000 in royalties, an artist would need to have at least 1,000,000 streams. And this does not take into account the other players involved, such as agents or recording labels.
In 2020, there were only 13,400 artists that generated more than $50,000 (the median wage for United States workers) of yearly revenue on Spotify. You can imagine how many more “full-time musicians” are forced to find other ways to make a living, just to continue doing what they love.
But that’s not to say musicians aren’t putting up a fight. Some of England’s top artists have written letters to their government, urging better earnings for streamers. But a massive change that involves government (slow) and huge corporations (stubborn) could take years. A new way for artists to own and monetize their work wouldn’t just be nice, it might be necessary to keep the industry alive.
How Could Music NFTs Save Artists?
In a word, control. Music NFTs allow artists to control who has access to their music. By using a tool like Submarine, allowing users to unlock premium content (in this case, exclusive singles, albums, or behind-the-scenes content) via NFT access, Retweets, or even geolocation, artists have a more effective and direct way to monetize in comparison to streaming.
By selling NFTs that can be used as a sort of ‘unlock token’ directly to fans, smaller artists can avoid the middlemen (streaming services, labels) and keep more of the revenue for themselves. In theory, this decreases the power gatekeepers have over artists. And so far, it’s kinda working.
Musician Daniel Allan spent months building a relationship with the NFT community and raised 50 ETH to fund his new album, Overstimulated. Companies like Audius and artists like Vérité's, who raised $90,000 in an NFT launch, are at the forefront of exploring new ways to get paid. Avenged Sevenfold launched an NFT collection called "Deathbats Club" with 10,000 items that grants holders access to benefits such as meet and greets at shows, lifetime free tickets, limited edition merchandise, and more.
“Everyone is obsessed with making money and seeking alpha, which does a disservice to what [NFTs] can actually do. We have been instructing many bands that NFTs are a ticket for access to an exclusive club.” - M. Shadows, Avenged Sevenfold’s lead singer.
There's a lot of progress happening. Right now, artists and their fans are still pretty locked in to the current system. Taking the extra step of obtaining a token before accessing an artists’ music is still unnatural, especially with the ease and convenience of Spotify. So what will it take to achieve widespread adoption for music NFTs and unlockable premium content?
Enabling Widespread Adoption for Music NFTs
The first thing the music industry needs is more exposure. For artists, listeners and yeah, the labels. Even with the use cases mentioned above, the majority of the music industry still sees NFTs as a novelty rather than a legitimate way to run a business. We see a future where the experience is built and monetized on the blockchain, with labels taking part of the experience, as well.
Second, there needs to be a big jump in user experience. Listeners know what to expect with Spotify and Apple Music: a smooth, intuitive experience that lets them listen to Lil Nas X with just a few clicks. Web3 platforms aren’t quite there. Music NFTs and related premium content require extra steps that most people don’t yet have an appetite for.
Artists must be creative on how they can create new business models in order to maintain their music accessible and reach as many people as possible while, at the same time, being able to monetize their attention in a better way rather than relying solely on big platforms like Spotify and YouTube.
Innovation will be key. Take iMozart, a digital music composer who has created a music NFT that lets artists compose and share their original sounds with an interactive composer that you can buy on Opensea.
At Pinata, we’re hoping to move that forward with Submarine, the new way to share premium content. An artist can easily upload their music and offer exclusive access to some or all of their songs to fans who own a specific NFT. If you’ve got a bit of coding ability, you can use Submarine to build your own NFT music app, giving people who own your NFT participation access to a legal music sharing service.
It’s still early days for music NFTs. The possibilities are endless and we are just starting to see how this technology can be used. We’re looking to a future where artists can have a clearer picture of their fanbase to drive sales, engagement, and ultimately build a more sustainable career.
So, do we believe the future of music is on the blockchain? Yes. But it’s gonna take a push. And if we want artists to continue making music—to be able to survive doing what they love—then we all need to step up and make this push a reality.