How Solana And NFT Music Will Disrupt The Entertainment Industry
Solana Music NFTs will enable independent musicians to earn more and connect with fans.
What Is NFT Music?
Music NFT is an acronym for Music Non-Fungible Token, which is essentially a digital record of music ownership recorded on the blockchain. Music NFTs are called
non-fungible because each token is unique. NFTs differ from cryptocurrencies such as Solana SOL, Bitcoin and Ethereum ETH because the tokens are similar and interchangeable, while NFTs are unique. A music NFT can represent ownership of a song, album, or the associated artwork.
Solana Music NFTs are recorded on the Solana blockchain, which makes them censorship-resistent and decentralized. Solana Music NFTs are not owned or managed by a centralized record label or music studio. Solana Music NFTs empower independent artists to deliver their music directly to consumers and retain a higher percentage of music streaming profits.
Music Streaming Services Are Ripe For Blockchain Disruption
Many music artists gripe about how little they are paid from streaming services such as Spotify. It is estimated that recording artists only receive between 5-25% of the revenue that Spotify earns from its music streaming services. Spotify paid $5 billion in music royalties in 2020, up from $3.3 billion in 2017. Music royalties are paid to the music owners, which are not always the recording artist. Often investors and other entities can own the royalties too.
Apple Music pays about one penny per stream. Apple noted that it paid 52% of all its subscription revenue for Apple Music to royalty owners. Spotify’s payments are more complex, as that service includes both subscribers and an ad-supported free tier. Spotify pays musicians about half of what Apple Music pays per stream.
“As the discussion about streaming royalties continues, we believe it is important to share our values. We believe in paying every creator the same rate, that a play has a value, and that creators should never have to pay [for music being promoted].”
– Apple Music letter obtained by the WSJ.
The music streaming industry is estimated to be about 400 million subscribers and $13 billion. As of 2021, Spotify had about 155 million paid subscribers. In comparison, Apple publicly stated that its paid music streaming service had surpassed 60 million subscribers in 2019. In early 2020, Amazon reported that its music subscription services had 55 million subscribers.
How NFT Music Could Change The Music Industry
Payments to recording artists have been a controversial topic. United Kingdom legislators are investigating the music streaming industry. Musics streaming services hold a disproportionate amount of power – they are controlled by large, centralized technology companies. Independent musicians have very little bargaining power when negotiating and accepting terms.
The music industry is centralized and a story of David and Goliath. Most of the power is held by a group of private and public companies, and independent music artists have very little bargaining power. The music industry controls the distribution and sale of music to consumers. Independent artists have very few alternatives.
Blockchain music NFTs could change the balance of power and decentralize the industry. Music NFTs enable independent musicians to cutout middlemen who extract profits and deliver their content directly to paying consumers. The Solana blockchain is a perfect fit for music NFTs because it is cheap, fast, and decentralized.
Audius And Solana
Decentralized music services such as Audius are empowering music artists to take power over streaming. Audius is a crypto-powered music sharing and streaming protocol that aims to give artists more power over how their music is monetized and enable them to connect directly with fans. Audius is powered by the AUDIO token, which has a market cap of about $360 million as of June 2022.
Audius lets artists upload their tunes to the app and connects fans directly with artists and exclusive new music. Audius acts similar to a music co-op, using its token to balance ecosystem incentives for node operators, artists, and fans. Artists can upload their tracks for free and users can listen to them for free while everyone earns crypto tokens. There is no centralized party to intervene or take a split of the profits.
Audius attracted the attention of several well-known artists including Skrillex, Weezer, deadmau5, Russ, Mike Shinoda, Diplo, Madeintyo, Odesza, Disclosure, Alina Baraz, and Wuki. There are more than 100,000 artists on Audius today.
Solana Is Perfect For NFT Music
Audius chose to migrate its music content management system (CMS) to Solana in 2020. Audius was originally built on POA Network, an Ethereum sidechain.
Simply put, Solana is:
- Cheap: Offering around 1M transactions for $10.
- Fast: Block times are 400ms, with confirmations often under 1 second.
- Live: Mainnet has been live for nearly 8 months and processed nearly 5B transactions.
- Decentralized: With over 180 nodes on mainnet, and over 500 on testnet.
Given our need to utilize a high-performance blockchain today, Solana’s growing set of 182 validators (as of this writing) combined with a battle-tested architecture gives our community the confidence that Audius’s catalog can scale at ease, a crucial component of our path to mainstream adoption.
– Audius blogpost on 10/29/2020
Snoop Dogg Is Aiming To Combine Metaverse And Music NFTs
This month Snoop Dogg filed for new NFT and Metaverse trademark applications for UNCLE SNOOP and UNCLE SNOOP’S with the United States Patent and Trademark Office (USPTO) last Tuesday.
Snoop Dogg’s migration to the metaverse and music NFTs could embolden other artists to follow. Artists will realize that the legacy system they are used to is eroding – they are no longer beholden to centralized companies that control music distribution.
How Can You Sell NFT Music?
Solana NFT music can be minted, bought and sold the same way as all other Solana NFTs. OpenSea, MagicEden and other NFT marketplaces enable artists to sell their traditional NFTs today. In time, more support will be integrated for music NFTs and streaming services.
Given the growth in the Solana ecosystem over the last year, it is likely that new decentralized apps will emerge that empower independent musicians to create their own music NFTs and distribute them to consumers. Art NFTs exploded in popularity in just a couple years, and it seems likely that the demand for music NFTs will be strong as well.
Music NFTs could become very valuable. Today, the royalty rights for famous music can sell for hundreds of millions of dollars. Michael Jackson paid $48 million to own half of the music rights to the Beatles’ portfolio in 1985. When Michael Jackson passed away, his share in the Beatles’ portfolio was estimated to be worth more than $1 billion dollars.
The future of NFT music is exciting, and it surely will change over the coming years. Blockchain and decentralization will help independent musicians retain more of their profits. Also, it will help form a more direct link between musicians and their fans.