NFT stands for “Non-Fungible Token,” a type of digital certificate encoded into a blockchain network that guarantees ownership of a unique asset such as arts, virtual assets, collectibles and now music.
Yeah, Music can now be minted as NFT.
Despite the speculation and skepticism around NFTs’ seemingly volatile and unregulated nature, one thing is certain they are here to stay.
Welcome to another exciting episode of NPK Talk Series. On today’s episode, we will talking about Music and NFTs.
Just like every episode, the major highlights of this episode are:
- How Music NFT works
- The solution it is bringing to the industry
- How can it transform the Music Industry
- How can one invest in Music NFTs
How Music NFT works?
The NFT and crypto space is still very young, especially on the music front. But the possibility of more direct artist-to-fan interaction and new ways to monetize work without the need for traditional music publishers makes this a promising technological development.
“Music NFT is a certificate of ownership of a unique musical work that can be sold to another party. The owner has the exclusive right to determine how the composition is used.”
The term “NFT” is applied to all sorts of fungible tokens (meaning multiple copies exist and are owned by various parties) secured on a blockchain that grant the owner the right to music, album art or videos created to accompany music, or some other exclusive access to content.
Blockchain technology and Web3 are on their way to transform everything — particularly the world of art and music. Right now, the music industry is very much centralized, with Web2 streaming platforms (despite being extremely popular) often not getting the best deal for artists.
Blockchain solutions are working to solve this. Decentralized streaming platforms, like the NEAR-based Amplify. Art and Tamago, will give musicians more artistic control (and revenue). Music NFTs, already popular on NEAR, are also helping artists create a closer connection with fans.
The solutions NFTs are bringing to the industry;
- Faster, more efficient creative control
Cutting-edge protocols for NFTs, fractional ownership, smart contracts, and real-time on-chain settlement of royalties make blockchain and the music industry a natural pairing. A blockchain boom in the music industry is imminent thanks to NEAR Protocol’s robust feature set already in use and hugely successful in areas like, non-fungible tokens (NFTs), and decentralized autonomous organizations (DAOs).
- Making royalty splits transparent
Creating a better model to improve the distribution of music sales and royalties to artists. Everything is baked into smart contracts, and artists know exactly where funds will be allocated. Joining a music DAO can help artists participate in decentralized governance, request funds, and ultimately see every activity recorded on the blockchain. (Excerpts from NearBlog, the future of sound)
How NFTs could change the music industry?
- Music fans are a highly engaged audience. Selling music and related artwork via the blockchain is a way for an artist to forge a direct relationship with a fan base without the need for a record label or music-streaming service. If done right, it can equate to a bigger profit for the creator since there’s one less hand in the cookie jar. However, minting music NFTs isn’t free as requires gas fees (the cost to compute and record a transaction on the blockchain) and NFT marketplace fees for listing and selling work can still add up.
How to invest in music NFTs
Perhaps you make music and are mulling the prospect of entering the NFT fray. Or, maybe you’re a collector, investor, or speculator trying to decide if buying music NFTs is the right move. Either way, it’s a fresh and exciting movement, but there are no guarantees you’ll make money.
Remember that, if you are thinking about minting NFTs, you might be able to forge a more direct relationship with fans using blockchain technology, but it isn’t free. Fees to launch a project “on-chain” can really add up. The same goes for buying a music NFT. Your resale proceeds (if you decide to sell an NFT later on) will be reduced by marketplace fees, network gas fees, and any royalties the artist withholds when secondary transactions take place.
When deciding which music NFTs might present the best collection value (and how to go about starting your own music NFT project), bear in mind that historic works of art aren’t just valuable because of the creativity involved or the overall quality of the piece. There’s also value in the fact they’re unique.
The bottom line is that, if you’re making a music purchase (or launching a music NFT) for the possible collectors’ item value, supply and demand is an important consideration.
Thank you for reading.