With the onset of the digital universe over the last decades, music has been steadily devalued with a race to the bottom pricing to give subscribers access to massive databases of music.
Pandemic social shutdowns were another blow to musicians, who now couldn’t even generate revenue from live performances. In recent months, the emergence of NFTs, or non-fungible tokens, are breathing life into the industry as musicians are getting creative with ways to generate revenue and better connect with fans.
An NFT is, in essence, a collectible digital asset, which holds value as a form of cryptocurrency and as a form of art or culture, and offers artists the ability to monetize their art or music. Music DeFi pioneer BAND Royalty is taking NFTs to the next level by structuring them with the opportunity to access royalties from its constantly growing library of soundtracks.
Sales of NFTs soared to more than $2 billion in Q1 2021, up from $93 million in Q4 2020.
Still Not Clear on NFTs?
NFTs, one-of-a-kind assets stored and verified on immutable blockchain technology exploded on the scene in 2021, headlined by Christie’s auctioning a collection of Beeple’s digital artwork for $69.3 million in March. During the first quarter of 2021, NFT sales exceeded $2 billion, up more than 20-fold from $93 million in Q4 2020. The $2-plus billion wasn’t inflated by the Beeple auction, according to nonfungible.com. Also excluded were sales of NBA Top Shots, video highlights converted into NFTs. NBA Top Shot trade on the Flow platform reached $472 million during Q1 2021.
Like Bitcoin and other cryptocurrencies, NFTs can be held, sold or traded. Working as part of the complex encryption network of the Ethereum blockchain, NFTs are protected from counterfeiting as all transactions are on the blockchain, open to the public for tracing and authentication.
To date, the collectible space has been the primary attention draw, but the breadth of the market is starting to push through, including the music industry joining the mix. On March 12, Music Business Worldwide reported that NFTs grossed $35 million for the music industry in the past month, including Linkin Park’s Mike Shinoda making more than $30,000 with his new single “Happy Endings” and Kings of Leon becoming the first brand name band to release a new album as an NFT on the blockchain platform YellowHeart. YouTuber and musician PelleK in February claimed to be the first ever to release an NFT music album, which sold out in less than two hours when presales opened, generating $160,000. BAND Royalty did a limited private sale of its music NFTs, selling its three top NFTs for more than $200,000and resulting in combined NFT presales of more than $700,000.