The NFT market is still sluggish, mainly due to the lack of funds on the market. We have talked a lot about PFP and art projects, but we rarely talk about music NFT projects. Even now, no music NFT projects have been developed. What is the reason?
First, there is a certain element of survivorship bias in it. There are a lot of NFT projects, but very few of them can succeed in the end. The number of music NFT projects is very small, so it seems reasonable that no one has been able to stand out so far.
Why 99% of NFT projects fail
This is a big premise, and NFTs have garnered a lot of attention this year and have become a kind of gold rush that no one can stop. But why are some NFT collections worth billions of dollars while others are worthless? This was one of the key takeaways of Tyrone Rubin, CEO and founder of MetaLabsAfrica, speaking at the “Making Meaning in the Virtual World” Hybrid Summit organized by the Red and Yellow Creative School of Business.
It’s no surprise that Bored Apes is doing well: it seems that by now every influential American celebrity has had an Ape of his own. There was an episode of Jimmy Fallon’s “The Tonight Show” in which the host and Paris Hilton brag about their monkeys to each other in a very intimidating and unnatural way.
Earlier this year, NFT mogul Gary Vaynerchuk predicted that 99% of NFT projects would fail and be worthless due to the challenges faced by creators and businesses still in their infancy.
According to cryptocurrency and NFT research firm Nansen, a third of NFT projects with little or no trading activity end in death.
According to the NFT website NFTs Guru, NFT projects fail for a number of reasons, including:
Launch the NFT before it has a chance to launch.
Failure to gain community growth and engagement.
Falling into an NFT scam.
An NFT project collapsed shortly after receiving too much attention.
Despite the many pitfalls, Rubin explained that there are still many reasons why people should consider owning NFTs, adding that, on the plus side, they can provide multiple revenue streams.
“At some point, everyone will own NFTs. Gamers can play Axie Infinity, The Sandbox, and Decentraland using NFT technology and earn money. NFT ticketing is also more valuable than art, it goes without saying.”
Those who profited from their NFT art collection included digital artist Beeple, who sold “Everydays: The First 5,000 Days” for $69.3 million. But I have to say, this is the darling of the times.
Music NFT
VÉRITÉ is an independent artist who has been active in the crypto space in recent months — most recently selling part of the master recording royalties for her single “by now” to fans in the form of an NFT. That said, due to the current restrictions around royalty payments, revenue distribution must be implemented off-chain rather than on-chain through traditional legal agreements, with NFTs merely acting as a verified “purchase receipt” on top of the song. Other auctions, such as Jacques Greene’s “Promise” NFT and Lil Dicky’s “Save Dat Money” NFT, have similar restrictions – i.e. auctioning royalty shares through NFTs, but actually executing these share agreements through the traditional music industry process of paying royalties is slower .
In this regard, VÉRITÉ points out how two conversations are emerging in the music NFT community at the same time: “The idealism of what NFTs can be, and the pragmatism of the relationship we still have to have with older systems, especially within the music industry, to allow this work.” In particular, she said, the way royalties were collected was “a clunky, 50-year-old system with a black box that definitely benefits the holder of the black box”.
To put it bluntly, it’s very simple. There are obvious differences between music NFTs and image NFTs, which stem from the fact that their structures on Web2 are already very different. The revenue of music depends on the circulation and selling CDs, and the digital world has brought a change to them, that is, the number of clicks. The single-pay-for-song form still exists, but the audience isn’t as large. Good music is for everyone to hear, sing, and popular, not for someone’s collection, private property, like an image. This also determines the difference between the profitability of music NFT projects and image NFT projects. Since the form of their “storytelling” is originally different, it must not be successful through speculation in the secondary market.
On the other hand, the public’s awareness of copyright in music is different. Because the music only needs to be played through the device, played to yourself, and you don’t need to care about its copyright. The general devaluation of music consumption will take several years to reverse, which VÉRITÉ sees as an inevitable side effect of the overall “market saturation” of music and the fact that “music creation and distribution are now fully democratized.” That being said, it’s still common sense that fans value music at least to some extent, even if it’s not reflected in the economics of streaming. “They are lovers and consumers of art, and they do want to support artists—we just need new ways for them to support them,” VÉRITÉ said. “We can add these additional layers of value, whether it’s community membership, or giving people an experience beyond just clicking on something and listening to it.” In this process of designing new ways of supporting artists’ fans, it was important to “Focusing on voices that are purely idealistic about what we can build.”
When it comes to the current state of cryptocurrency in music, independent artist Zola Jesus is one of the most critical voices in our discussion. In a previous interview with Pitchfork, she expressed her disappointment with the financialization of music NFTs, arguing that the market will only be fair to artists if “art is bought for the value it expresses, not the profit it can make. Future production. I don’t want people betting on me like a horse race.”
Initially, her impressions of NFTs were positive, she said. She once saw the technology as an antidote to the corporatization of the music industry — especially the “disillusionment” she experienced in “endless corporate structures” that forced her to “play games outside of music itself…Cryptocurrencies are A whole new way of making art and being able to find belonging and support for that art.”
However, she soon began to doubt the intentions of her art buyers and feared that her art was merely becoming “a means of profiting from speculation”. Rather than represent any real challenge or alternative to mainstream culture, she argues that NFTs, in their most hyped form of auction, are just “further plunging us into financial contracts and capitalist frameworks” with artists “trading like stocks
Epilogue
The collision of the music industry and NFTs is dizzying. There are always musicians trying to break into this space, from Snoop Dogg to Eminem. But this is just to monetize the traffic of celebrities, and it really has little to do with music. There are even bands or celebrities that have had good results by releasing NFTs (digital albums), but these are also like a one-shot deal.
Music NFTs will be successful, but not now. Its success does not come from individuals, but from changes made by music entertainment companies that hold the copyright. The point of contradiction is that the centralized subject changes, surrenders power, becomes decentralized, and distributes benefits to creators. This may require a very enlightened entertainment company, or when the times force them to make concessions, to see this situation.