How audio NFTs can change the music industry forever


The NFT have been in tears this year. Last month the market recorded record highs and markets like OpenSea saw unprecedented volume. The perennial question surrounding almost every aspect of crypto is… “So where do we go next?” Many believe that audio NFTs may be a largely untapped area to date.

While “JPEG collecting” has been a meme in and of itself, there is no doubt that there really is a use case and added value for a wide variety of markets with NFTs. So… where does the market go next? Some of the strongest NFT projects have focused on building identity and community.

Projects like Bored Ape Yacht Club have created a digital atmosphere of community, exclusivity and fun. Some projects have built unique use cases, like Axie Infinity, where online savings can add value across the world. Finally, some projects seek to take traditional molds and turn them over. The entertainment industry, with the music business in particular, is ripe for revitalization.

Music to our ears

We have now found ourselves in new uncharted territory as crypto begins to infiltrate a variety of industries and their day-to-day operations. The music industry is constantly evolving, often back and forth between artists, labels, streaming services and listeners.

There have been some dramatic changes over the past few decades, with the power dynamic shifting from the dominance of recording labels to independent promotion and now to digital streaming services. Through it all, the industry has operated to a large extent on cut-and-paste agreement structures, resulting in agreements that are often manipulative for creatives. NFTs show the potential to change that – and more.

With the influx of NFT and cryptocurrencies, there might be a way forward for artists to get more involved in the lucrative aspects of art and music. Quite often the artist simply relies on management or recording labels to handle distribution, promotion and reservation. NFTs serve as a tool that can impact artist merchandise, live performance tickets, live recordings, and general fan interaction.

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Checking the condition? Where are we

Audio NFTs undoubtedly have immense potential. Andreessen Horowitz Crypto Investor Chris Dixon Describes This Potential in a recent tweet, stating that “music is going to be an amazing category for NFTs. This is where the gap between fan enthusiasm and creator monetization is perhaps the biggest.

Dixon made the comment citing entrepreneur Suhail Doshi. new platform “Songs for tunes.” However, the challenges here are common threads for many of these emerging audio-focused NFT projects. Scalability, adaptability and integration of the first wave of loyal consumers.

Moreover, “audio NFTs” might even be too general a generalization, given the fragmentation of NFT types that we have seen successful so far. Culture and crypto investor Magdalena Kala called more than a dozen unique NFT types in a recent tweet. The reality is that audio NFTs have the potential to scramble many of these lines. Musicians’ NFTs, for example, could include fan packages that serve as a de facto subscription, or they could use exclusive admission to an event through an NFT, or they could donate the profits to a charity that ‘they prefer. In addition, some artists like 3LAU, seek to create their own NFT marketplace.

NFT platform Rarible recently introduced it's RARI token, rewarded to holders on the platform. | Source: RARI-USDT on TradingView.com

Some of the larger platforms hosting NFTs to date, such as OpenSea, Rarible, NiftyGateway, and SuperRare, already support NFT audio files. However, audio-first platforms continue to emerge, notably under the impetus of platforms such as Catalog and Audius. The absence of consolidation is representative of the early stages of NFTs in general, and in particular of audio NFTs. This adds to the confusion for consumers who might have already tried to understand the basic information.

Many potential consumers are already asking, “What does buying an DTV look like? What EXACTLY am I buying? Will I own a piece of music? Will I own the distribution rights? How does this affect the copyright laws relating to my purchase? The answers are often that we just discover many of these things as we go.

It’s not over until …

Overall, exclusivity and community have been two traits associated with a large number of successful NFT projects to date, and are two traits that generally generate positive results in the music industry as well. NFTs have the potential to impact artist merchandise, ticketing, new music releases and live recordings in a whole new way – without even going into artist pay.

Where do we go from here? As NFT audio platforms evolve, the potential of an NFT audio and platform is limitless. Only time will tell, but we would like to think that Web3.0 will bring a redefining perspective around the playing field in which NFT audio creators can play and the way artists interact with fans. Crossed fingers.

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Featured image from Pexels, Charts from TradingView.com



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