NFT Labs: Application Scenarios of NFT(Music)-I

NFT Labs: Application Scenarios of NFT(Music)

The NFT marketplace promises to open up a world of virtual collectibles to music fans. In the K-pop realm, many fans have embraced the NFT collectible format—independently released albums are highly sought after. Musicians can create digital goods to sell and decide how many versions are made available in perpetuity before the work is released to the market. Not only can NFT platforms bring income to musicians, but they can also bring in better revenue than music platforms such as Spotify and iTunes.

Practical: Rocki, Rarible, Mintbase

The combination of NFT and music is a major trend at present. This article will detail how NFT empowers music artists, what advantages the combination of NFT and music has, and what changes it will bring to the music industry.

1. What is encrypted music？

In the world of NFTs (Non-Fungible Tokens), there is a growing community of visual artists who embody digital provenance in their art by minting NFTs using blockchain technology (such as the ERC-721 standard of the Ethereum network). At the same time, a much smaller community of music artists is experimenting with this, minting NFT collectibles often described as “audio NFTs” or “encrypted music.”

NFTs were originally static, but we have seen their gradual evolution from images to looping gifs and mp4s (audio NFTs). Except for the file format, audio NFT is technically no different from other NFTs. It mainly realizes multi-dimensional presentation by fusing audio clips with underlying images or videos.

For example, the first NFT music album, “Audiovisual” was released by Studio Nouveau in the summer of 2020, which consists of 10 multimedia music videos. Each video is an NFT minted on SuperRare. The first 9 videos combine visual effects (abstract digital sculptures placed in an artificial intelligence landscape), music, and video effects. The 10th video represents the album cover.

The work also contains the Ethereum transaction information for themselves in the album. It records the minting process of each NFT track. A common slogan in the NFT art world is: “Anyone can see it, but only one can have it.” This means that anyone can watch and listen, but only one person can have ownership of these audio NFTs. This uniqueness of NFTs holds great attractiveness for the music industry.

2. Background on the development of encrypted music

In the past, in addition to going to live shows, people needed to buy vinyl records, tapes, CDs, etc., to listen to their favorite music. This creates a controllable supply and demand dynamic that generates revenue for record labels and sound engineers. But as digital music downloads began to proliferate in 2000, they evolved into the streaming platform many people use today. But once music recordings are released on the Internet, it's nearly impossible for artists to earn income as they did in the early days of the music industry. Artists are struggling for a living more than ever.

Streaming, while the main source of income for artists during the pandemic, is barely profitable, with royalties on digital service providers (DSPs) like Spotify only a few thousand dollars per million plays. In fact, 80% of music revenue comes from touring, but that revenue stream was quickly put on hold due to the impact of the pandemic. Under the influence of various factors, musicians lack a reliable source of income, and the number of broadcasts will only create the illusion of a new influx of fans.

It's time to empower musicians. It's time to give them control over their work and let them make money off of their music. Pay-to-play models have become commonplace, and NFTs are the latest way to empower musicians. NFT has digital provenance, scarcity, and collectability. Audio-visual collectibles sold in rare quantities in NFT markets such as SuperRare are highly sought after, bringing huge profits to musicians. Earlier this year, RAC broke SuperRare's sales record with the sale of Elephant's Dream to famed NFT collector Max Stealth for 70 ETH.

It can be seen that the combination of music and NFT has become a new trend.

3.Crypto music is proliferating.

Recently, DJ 3LAU, which has entered the world's top 100 DJ list, also launched the first music NFT on the Nifty Gateway platform. 3LAU's song is called “Everything,” and the open version is priced at $999 for a single NFT, and 175 pieces were sold in 9 minutes, totaling $174,800. Buyers will get an art NFT, music NFT, and a physical music display, and collectors can scan the code to listen to the music.

Last year, well-known electronic musician deadmau5 released his limited edition series of NFT collectible cards on the WAX blockchain. The combination of NFT and the music industry seems to be the general trend. The release of musician deadmau5 will be a starting point and a demonstration of NFTization in the music industry. These cases show that more musicians will participate in the NFT field in the future, and music and NFT will have a broader and deeper integration.

As NFTs entered the music industry and became the focus of attention, a blockchain-based music NFT platform ROCKI came into being. ROCKI is a music streaming service and digital payment ecosystem launched in the fall of 2020 to solve the music industry's thorny issues of platform playability and revenue distribution among participants. Powered by the ROCKS token, ROCKI will be the first platform anchored by NFTs to inspire musicians and listeners.

Artist GuyJ released his first NFT music, CottonEyes, on the ROCKI platform last year. The song has an ERC721-NFT on the blockchain, marking its digital rights. This CottonEyes NFT auction was held at bounce.finance. After more than 10 hours of multiple bidding by participants, a collector finally bought this NFT at a price of 40 ETH.

ROCKI CEO and co-founder Bjorn Niclas are excited about the auction. “This is the first successful transaction of ROCKI Music NFT, which will open up new revenue channels for many artists, while enhancing the interaction and participation of fans and creating other values. Next, ROCKI will issue two NFTs, ERC- 1155 Music NFT and ERC-721 Music NFT. Owning ERC-1155 NFT can get the right to listen to the song, and owning ERC-721 NFT can get the copyright income of the song.”

Niclas said: “By the end of the platform's closed beta, ROCKI has attracted thousands of independent musicians and more than 30,000 tracks. This development process is obvious to all users of the ROCKI ecosystem. The ROCKI platform has launched a public beta version, allowing musicians and their fans who pursue the NFT function of music to experience the charm of NFT + music for themselves.”

The NFT + music model has attracted many well-known musicians and many novel projects have been produced one after another, injecting new impetus into the NFT industry. In the future, it can be predicted that in addition to the two major development directions of games and artworks, music is also a significant development trend of NFT.

4.A brief introduction to the development of NFT music industry

As digital trends continue to dominate traditional industries, platforms such as Spotify, Soundcloud and others have created new channels for musicians to monetize their music and increase exposure. Next, NFTs provide a similar solution through blockchain technology, allowing musicians to attract fans in a whole new way and earn more money.

Musicoin was one of the first projects to cater to new developments in the music industry, providing a free platform where artists could gain direct support from fans. New platforms such as Rarible, Nifty Gateway, OpenSea have dominated the market and created the NFT craze, and these platforms also offer a wide range of NFT products.

Since the end of 2020, NFTs have taken the music industry by storm. With the pandemic putting many shows on hold, musicians are increasingly eager to earn more royalties from streaming services. This is where NFTs come into play, offering new opportunities to monetize music.

The NFT music market constantly expands as demand increases and new projects are developed. The blockchain can authorize musicians to hold their music or videos with private keys. With NFT distribution, buyers will be entitled to their unique copies.

In December 2020, Deadmau5 became the first major player in the industry to go the NFT route, auctioning off a set of collectibles called “Rarez”. The collection does not include musical compositions but has fun objects like artwork, stickers, and more. Later that month, he again sold a single copy of In Titan's Light for a whopping $80,000.

Electronic record label Monstercat soon joined in, selling a Varien-produced soundtrack for over $500,000. Linkin Park frontman Mike Shinoda sold a 37-second audio clip of “One Hundredth Stream” for $30,000. Shawn Mendes has not released NFT music, but has already made over $600,000 from selling other collections.

Dance duo Disclosure performed their new song N.F.T-N.R.G on Twitch, and the NFT version quickly sold for about $69,000. Famous electronic producer 3LAU gets $11.6 million after selling 33 NFT works.

Finally, Kings of Leon, the first big hit band to sell an entire album in the form of NFT, whose sales have exceeded 2 million US dollars, and will continue to soar for the foreseeable future.

NFT cannot solve the livelihood problems that all artists have faced during the epidemic, but it still provides them with new opportunities and possibilities.