The music industry has always been very complex with difficult-to-understand licensing and revenue models. Artists and publishers are constantly seeking new ways to connect with their audiences and monetize their work. It doesn’t come as a surprise that the NFT hype also influences the music industry.
In this article, we’ll explore how NFTs are changing the game for musicians and reshaping the way the industry thinks about the value of music, with a focus on how Audius, OneOf, and Spotify using NFTs and blockchain in their current business structure.
What are NFTs?
Before diving into how NFTs are impacting the music industry, here is a quick recap on what NFTs actually are: They are unique digital assets which are stored on a blockchain, a decentralized digital ledger that records transactions and ownership. When someone buys an NFT (imagine a song or an album), they are purchasing ownership of a specific piece of content, which can then be bought, sold, or traded just like any other asset.
Representing ownership of a unique piece of content is what makes NFTs valuable. This gives the owner a sense of exclusivity and scarcity, which can drive up the value of the asset. Additionally, because NFTs are stored on a blockchain, they are decentralized and can’t be easily duplicated or copied, which adds to their value.
You can read more about NFTs in Part 1 of our Beginners Guide to NFTs.
How are NFTs changing the music industry?
NFTs have impacted the music industry by providing an innovative and astute approach for artists to earn money, moving away from traditional revenue streams like album sales and streaming royalties. Through the sale of a specific element of their content, musicians can unlock a new stream of revenue that is directly tied to the value of their art.
Moreover, NFTs empower fans to invest in their beloved artists in a more direct and meaningful manner. Owning an NFT allows enthusiasts to possess a fragment of their favorite artist’s work and reap its rewards, thus creating a symbiotic relationship between the artist and their supporters.
Furthermore, NFTs stimulate experimentation and ingenuity within the music industry, as artists now have a new platform to showcase their creativity and engage with their audience. This includes the release of limited-edition remixes and interactive digital experiences, enabling artists to push the boundaries of what is achievable in music.
Lastly, exclusive NFTs bolster fan engagement and loyalty. Possessing an NFT provides supporters with a sense of exclusivity, as though they are part of a privileged community. This cultivates a stronger connection between the artist and their audience, leading to increased engagement and enthusiasm for the artist’s work.
Examples of NFT Music Platforms
There are already several examples of new and already established music platforms that are making waves in the industry, including:
- Audius: A decentralized streaming music service that supports NFTs as engagement and social tokens for unlocking goodies and extra capabilities for users. It also allows artists to upload their songs as NFTs, ensuring their immutability and security through a decentralized network of node operators. Audius plans to support meaningful creator tools that make their way to crypto.
- OneOf: A mass-consumer Web3 company that connects non-crypto-native fans to iconic brands, artists, and athletes. OneOf technology enables global brands and enterprises to reimagine commerce, loyalty and engagement by allowing consumers to seamlessly collect or trade digital assets with no prior crypto expertise. OneOf supports NFTs on multiple energy-efficient blockchains to create sustainable and user-friendly Web3 experiences.
- Spotify: The world’s largest music streaming platform, has plans to add NFTs along with blockchain technology to grow artists’ income through appending NFTs technology in streaming activities. Spotify is also testing a new feature where artists can display their NFTs on the platform. This option has only been made available to a “very small group of artists” and select Android users across the United States. Additionally, Spotify is testing playlists that could be unlocked by NFT holders of certain communities in select countries.
NFTs are an exciting new development in the music industry, offering musicians and creators a new way to connect with their audiences and monetize their work. While there are some potential drawbacks to consider, the benefits of NFTs are clear, and it’s likely that we will continue to see more musicians and creators experimenting with the technology in the coming years. With platforms like Audius, OneOf, and Spotify leading the charge, the future of music and NFTs is looking bright.