The bear market started just over 500 days ago. As expensive JPEGs decline, music NFTs are seen as the next idea capable of bringing new energy to the space. It's been a mixed bag. Let's take a look at what's happening, and what can be done to make them shine.
Music NFTs let you distribute your song on your own terms. You upload it on IPFS, create your own contract, and the song is here forever. No more deplatforming or playing games with the big streaming platforms! (in theory)
Most web3 music platforms won't play ball with that: they only feature songs minted on their platforms. By doing this, they effectively become publishers who cherry pick the next artists. The whole point was to move away from that! Featuring should be independent of where the item was minted.
The top two platforms are Sound.xyz and Audius. They only play, buy/sell songs from their own platform. It's all their contract, on one chain. It's as if Sony had a store that only sold Walkmans, which only play Sony artists.
You should be able to mint anywhere, and then list for sale anywhere, and let people play from anywhere.
Lack of standardization
Free from the constraints of Spotify, creators are getting experimental: short 10-30s clips, promises of revenue splits or fractionalized ownership, PFPs inspired by a musician. It’s very diverse but makes it hard to define standards. There are no singles, EPs, albums.
It’s a series of ad-hoc releases, with no way to identify true source creations. This problem is exacerbated by the fact that minting happens on several chains, all of which have their own ways of working. The openness is great, but there needs to be some communication on who gets what rights, and what you are getting.
Difficult for newbies
Want to buy my song? Get some ETH on Coinbase, make a wallet, move that money there, sign up to this page with your wallet (but don't click any links), and you're set. The current way feels like a meritocracy: only the most curious and engaged people are here.
But not everyone who wants to just hear your song is going to want to put up with this. We need something that feels closer to Soundcloud or Bandcamp, where you can just sign up and listen or collect without prior experience.
Want to sell your NFT? Promote on Twitter Spaces every day (but don't shill), come up with good rewards, maybe a 1/1 or merch and concert tickets, perform in the metaverse, give out Discord roles. Easy. The silver lining of self-publishing is that you have to do everything.
If creators could engage their community straight from their profile and player, they'd be able to work with the community to make this easier. There would be a lot less guessing of what people want.
Too focused on superfans
Most of these perks are rewards for being very engaged. Zoom concerts, token-gated communities. There is very little for casual people who just want to listen to music and maybe drop a message. It's the way people use SoundCloud. It's difficult to be demanding of time, attention and money from a large group of people. Even brands like Rolex have entry level models, so more people can get on the hype. We need ways to cater to newbies.
Creators are still primarily on Twitter, Telegram and Discord. This makes it pretty convoluted to know “this user bought my NFT”. Also, if you are shadowbanned, your community suffers.
Similarly to how we need to own our creations, social media posts and follower graphs should be ours as well. This will allow doing airdrops to owners, or even just reach out to them.
If $10 gives all of music streaming, why pay $500 for a music collectible? Sure, it's "rare", but you can still play the song for free most of the time. It feels like the justification for prices comes from high gas prices, or because people are used to $1000 JPEGs.
Sound.xyz's answer is perks: buyers can comment, enter a raffle for a 1/1, download the song. It'd be nice to see expanded. Maybe unlockable songs, maybe behind the scenes stuff? There's a lot to learn from Kickstarter and Patreon.
Obsession with ROI
According to recent research, only 15% of fans are interested in ROI, and only 7% would sell their item. Still, much of the discussion goes: "Buy this and it'll gain value, we're early". Compare this with Soundcloud rappers who will just release their song and be happy if you leave them a like and comment. When you look at the Twitter Spaces, people are still very focused on selling out, or managing their floor prices.
When you look at the bigger picture, any NFT sale is going to make you more money than streaming would. Obviously if every platform is primarily aimed at selling out drops, people will focus on that. We think growing a community and coming back for interesting content should be the focus.
According to @TheNFTMusician, the total music NFT sales for May were 20ETH. There were 94 new collectors. Across all the major platforms, on secondary and primary.
It's rapidly decreasing, which is a concern: the quality of the music is going up, and there are more musicians. The sales are not driven by quality, but by crypto prices. So maybe stop worrying about sales anyway!
The future is DIY
To some, web3 is a way to replace currencies, governments. To others, it’s a way to get rich, learn finance. To some, it’s about censorship resistance, being able to publish on your own term. Since the bear market, the financial skew has been slowly eroding away.
The space is ripe for innovation, waiting for eager creators to ship awesome music, build their own albums and EPs, push them onto new platforms. Maybe a Pepe album will be the next hot thing? Maybe it’ll be a collab, in a way that just can’t be done on Spotify. Unlike web2 publishing, it won’t be a simple packaged offering. It’s a DIY future, it’ll take work, but it’ll be pretty awesome once we build it 😊