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

NFT Labs: Application Scenarios of NFT(Music)-3

NFT + Music Industry Development Potential

As we all know, non-fungible tokens have greatly impacted the art world. In the music industry, the hurricane effect of NFT is also coming. Data collected by Water & Music shows that in February 2021 alone, the NFT music industry made nearly $22 million in profits.

One of the best ways to learn about the NFT music industry is to follow some of the key early players emerging in the field, who are also leading the way as music NFTs expand rapidly. Statistics from Water & Music show that the sales of music NFTs have increased by 150 times in the past six months. It seems that every musician and music company is trying to get in on the action. Music NFTs can take many forms, including but not limited to concert (virtual and physical) ticket sales, sample packs, previews of unreleased songs, artwork, and more. As music NFTs continue to grow, the potential uses of the technology will rapidly expand beyond how NFTs are used today.

Why buy NFT version music？

The album When You See Yourself has been released on streaming platforms such as Spotify and Apple Music, and has also been released on QQ Music. YellowHeart (a blockchain-based streaming platform) provides the NFT version of the album.

Many people will ask, since traditional platforms can find audio sources, why buy NFT versions？

1. Novelty effect

For some people, NFTs are, no doubt, new and cool, with the $50 package offering limited-edition vinyl in addition to digital album download rights, as well as a unique NFT album collection. In addition, in the NFT Yourself series, Kings of Leon also released an auction of six “golden tickets”, and fans who have auctioned tickets can enjoy the first four rows of their concerts for life. The underlying blockchain technology of NFT enables the direct transfer of golden tickets to fans' digital wallets.

NFT albums are still a relatively new concept in the music industry, and to those unfamiliar with the NFT industry, it's a lot like explaining the Internet to someone who had never seen the Internet in the 90s. The highly conceptual and unprecedented innovation of NFTs is still novel to many people. By purchasing NFTs released by their favorite musicians, to some extent, this emerging concept can be understood in the most direct way.

2. Limited rarity

NFTs, “non-fungible tokens”, are often limited in number or unique, which is precisely the key to the fan economy - from idols, limited and precious. Most musicians release songs or albums in a limited format, creating unique, marketable digital merchandise, artwork, and unique musical experiences for fans.

Although NFT is a digital commodity, the underlying logic of buying NFT is actually similar to buying physical commodities. For example, even if an album is available online for free or for a small fee, many fans will still want to buy a limited-edition vinyl record.

The popularity of NFTs has something in common with those brands that rely on marketing-driven. There's nothing special about the Supreme T-shirt, but it's still special because it's only available to a select few. Supreme's limited releases, collectors' limited vinyl records, and the rarity of NFTs make them a status symbol and memento. Paying sky-high prices for rare and exclusive music is not unheard of. Former pharma CEO Martin Shkreli paid $2 million for the Wudang sect's only album, Once Upon A Time In Shaolin. A humble single by British DJ Scaramanga Silk recently became the most expensive vinyl record on Discogs, selling for over $40,000.

3. Exclusive rights

Some musicians are using NFTs to offer their supporters unprecedented experiences, including front-row tickets, personal memorabilia, and more—all in all, a rich and unique endeavor. So the next time you buy an NFT from a musician, remember to buy something unique.

Investment purpose

Some people may buy NFT assets for investment purposes, hoping that the NFT they hold will maintain or appreciate in the future, and can profit from resale. The volatility and uncertainty of NFTs make NFT holdings somewhat riskier than some traditional investments, but for many investors, they are willing to take that risk.

As mentioned above, NFTs can be simply viewed as a hybrid of “digital assets + authentication certificates”, which holds great promise for any practical case that can connect the real world with NFTs. Because NFTs are verifiable and extremely secure, musicians can better retain fans, create new ways of interacting, not only gain more copyright revenue, but also reduce the traditional inherent costs. To put it simply, NFT+music actually connects music—songs, albums, etc.—with NFTs.