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How Music NFTs Are Disrupting the Music Industry

11min Read

Explore the major impact of music NFTs on the music industry. Discover the new opportunities for artists, fans, and investors and how it’s changing the way we think about music ownership.

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A non-fungible token (NFT) is a cryptographic token that keeps a record of who owns digital data on the blockchain. NFTs have become immensely popular in the past few years, pushing millions of dollars in sales across the art community. 

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As NFTs are transforming the industry with their distinct technology, many sectors, including the music industry, are getting in on the action.

NFTs and their use in the music industry

Change is nothing new for the music industry. The way we listen to music has constantly been evolving, encompassing everything from records to cassette tapes to CDs to mp3s.

And today, given the near-universal popularity of music streaming services and several royalty regimes that unfairly benefit record labels over musicians, we anticipate that NFTs will be the next digital innovation to rock the music world.

A music NFT is a certificate of ownership for a specific audio or musical work that may be purchased or sold. NFTs use blockchain technology to give incontrovertible proof of ownership and come with a certificate of authenticity that can be verified at any moment. 

NFTs, like crypto tokens, are maintained on a distributed ledger, making them difficult to counterfeit. Using NFTs, artists could claim complete ownership of their work without having to split their earnings with intermediaries like music labels or attorneys.

Importance of music NFTs

NFTs in the music industry – Image via Unsplash

Most fans who buy music NFTs aren’t buying the rights to the audio or composition but are instead paying for virtual bragging rights and promoting musicians who they believe are undervalued by the existing system. 

In addition to allowing artists to earn commission-free cash, NFTs provide artists with a great deal of flexibility, as they can auction almost any type of digital asset. This includes songs, whole albums, merchandise, concert tickets, and much more, offering artists a new avenue to monetize their art or other types of digital products.

Several experts believe that NFTs will be influential in defining the future of music. NFTs could be songs, albums, music, lyrics, or soundbites. Kings of Leon was the first band to release an album as an NFT last year. 

Music may even be blended with digital art in jpeg or gif formats to produce one-of-a-kind works of art that contain music. Lostboy NFT, for example, is a prominent music collective that blends music and art with an emphasis on mental health. 

Using smart NFTs that accept several formats, music-related NFTs can be rendered and presented differently depending on how they are viewed. 

Even big industry players are getting on board with NFTs. Warner Music Group, for example, has a collaboration with Genies, a firm that makes digital avatars and wearables. And Universal Music Group teamed up with the Bored Ape Yacht Club to establish Kingship, a metaverse band.

Empowering artists

Music NFTS empowering artists – Image via Unsplash

There are several players in the music industry to produce and promote music. NFT in the music industry would help artists become more self-sufficient and decrease the role of intermediaries. In reality, with proper NFT marketplace development, the chain of managers, record companies, attorneys, agents, distributors, and other stakeholders may be broken. 

This would give musicians more influence over the process of making and releasing music. For years, musicians have received inequitable compensation for their work. According to Fortune, the overall income split is 50/50, with just half of the cash going to the artist and the rest going to agents, attorneys, and distributors. 

The situation is significantly worse for musicians that distribute their music through streaming sites. The majority of Spotify’s top 0.8% make less than $50,000 in streaming earnings.

NFTs have the ability to guarantee that musicians are paid more appropriately for their effort.

How music NFTs allow artists to take control of their work

With NFTs, musicians and other artists do not have to give up ownership of their work to platforms right away. As a result, when music NFTs are sold, musicians will be reimbursed more directly and effectively. 

New artists would have more chances to express their skills on a professional platform. They will be able to create a stronger relationship with their followers by publishing their songs on NFT markets. NFT markets prioritize giving artists more flexibility. As a result, music composers will have greater control over their works and how they are transmitted to end consumers.

Increased revenue opportunities for artists

Nowadays, creators frequently cede ownership rights to platforms at the time they sign their initial contract and struggle to keep track of how their material is redistributed afterward. One of the most promising avenues for musicians to be adequately rewarded for their work is in secondary, tertiary, and higher-order marketplaces for NFTs.

NFT in the music business would provide musicians with more possibilities for selling their songs. Instead of racing to the top music labels, artists may just make and release music on their own terms. As a result of good NFT marketplace development, musicians may have more freedom of choice. 

Following an initial sale, recording artists might receive further money or royalties. For example, it may be set up so that every time an NFT is traded on NFT marketplaces, the artists receive 20% extra income.

Examples of successful music NFTs

In March of 2021, the new album from legendary rock band Kings of Leon called ‘When You See Yourself’ was released. They became the first music band to make their album available as an NFT.

Grimes sold a collection of NFTs for $6 million. Steve Aoki did the same for $4.5 million. For a whopping $11.7 million, American DJ 3lau sold a collection of 33 NFTs, including soundbites from his album Ultraviolet alongside animated visual art by surrealist genius Mike Parisella (a.k.a. SlimeSunday). 

CryptoPunk Rapper Spottie WIFI bootstrapped a community that helped him earn $192,000 in seconds.

Rihanna recently made waves in the NFT market when a percentage of streaming royalties in her song “Bitch Better Have My Money” was sold via NFTs on Web3 platform Anotherblock, garnering $63,000 in sales and an additional $469,452 in secondary trading volume.

Enhancing fan engagement

Music NFTs enhancing fan engagement – Image via Unsplash

NFTs provide fans the opportunity to own something directly from their favorite musician, whether it’s a concert ticket that proves their attendance or a special limited-edition souvenir. It has a greater significance when it comes directly from the artist rather than a distribution channel. This strengthens the artist-to-fan connection significantly.

How music NFTs allow for unique fan experiences

When an artist auctions a music NFT, they often disclose the discrete number of them being sold so that the value of any specific NFT is not diminished over time owing to more ones being distributed. As a result, fans have immutable ownership over valuable digital things that come with “unlockables” only available through the token they carry with them. 

On the other hand, investors gamble on the token’s value increasing to resell it to nth-degree resellers or affluent fans who want to solidify and strengthen their relationship with their favorite performers.

Music NFTs give fans a true feeling of being part of their favorite musician’s musical journey. You can contribute to a musician’s growth by purchasing a fan token and get an exclusive opportunity to own unique intellectual property.

Examples of music NFTs that enhance fan engagement

With “remix” culture growing in popularity, NFTs can be used as a tool to promote merging or altering content to create new creative, derivative content. 

“Fan edits” are copies of music, films, or artwork that have been modified by fans in such a way that content has been added to, deleted from, or supplemented to produce something new. Music NFTs can be used to facilitate the creation of fan edits with ease.

With “upgradeable NFTs,” musicians and other producers may reward remixes in ways that benefit them. “Upgradable NFTs enable the prospect of more efficient dissemination of music, without the need for middlemen, and that promotes the development of distinct properties, collaborations, and remixes, without the legal problems that frequently emerge.”

NFT in the music industry can assist musicians in creating a fan-to-artist ‘access pass,’ allowing fans to communicate directly with their favorite performers. Additionally, this community would provide fans direct access to unique behind-the-scenes videos, a look into the artists’ personal lives, and more. Furthermore, these new NFT systems can give one-on-one video conversations, backstage access, and discounts.

The potential for NFTs to transform the concert experience

Music NFTs give fans new chances to forge closer relationships with their favorite artists. Backstage passes, fan groups, souvenirs, and other unique and unusual resources are essential to the music sector. When fans buy the NFTs of a specific artist, they have a chance to win special VIP concert seats and other perks.

Music NFTs have the power to completely revolutionize the ticketing procedure for both purchasers and event organizers. Both ticket holders and organizers may rely on blockchain as a reliable source. 

The exchange of NFTs from the original sale to resale is immutably recorded on the blockchain, allowing all parties to verify the ticket’s legitimacy.

When compared to the existing ticketing system, the costs involved with selling and minting NFTs are minimal. Unlike the conventional method of digitizing tickets, NFTs can be minted in a short period of time. 

NFT-based tickets function as programmable money, opening up an infinite number of additional income options, such as reselling NFT tickets as collectibles, utilizing NFT tickets to give food and drink discounts, and rewarding fans who have collected a large number of event tickets.

Challenges and limitations of music NFTs

The usage of NFT in the music industry is not entirely sustainable. There might be some potential disadvantages of music NFTs.

Challenges and limitations of music NFTs – Image via Unsplash

Concerns around the environmental impact of NFTs

It takes a tremendous amount of energy to process and create NFTs for use in a blockchain network. But, this is a significant problem with cryptocurrencies in general. 

Ethereum Foundation has already converted from the energy-intensive PoW consensus mechanism to the PoS consensus method in order to lessen the environmental effect. This would dramatically lower the amount of energy required to mint NFTs. 

Nevertheless, not all blockchain networks use the low-energy Proof-of-Stake technique. As a result, additional effort is needed to make other Blockchains energy efficient.

Issues with accessibility and inclusion in the NFT market

Data accessibility is a significant aspect of the NFT market’s growth and maturation. The absence of defined data formats and metadata, along with the NFT sector’s extremely fragmented character, provides substantial difficulties for buyers and sellers attempting to traverse this nascent field.

Regulatory challenges surrounding NFTs

Many are still confused about who owns a song’s intellectual assets when it is published as an NFT. Therefore, record labels may continue to control the business by ensuring that artists’ monetization is maximized. As a result, there may be several legal problems in the future when NFTs are used in the music industry. This might ultimately hinder the growth of NFTs.

The faster adoption of NFT can only be secured if it defines explicit copyright constraints and assists artists in adopting this technology. Also, the original artist will be rewarded when their music is played.

The entertainment and music industries rely heavily on royalties. Depending on their popularity, it is a consistent source of revenue for musicians. Utilizing NFTs will have an influence on musicians by incorporating royalties in NFT smart contracts and making full use of royalty account software to create royalty reports.


The future of the music industry – Image via Unsplash

You may soon be living in a time where artists recover complete control of their creations by bypassing middlemen like record labels and streaming services to independently distribute their music to the general public by using NFTs and blockchain technologies. 

Moreover, you can employ NFTs and related technologies to build music collectives that can release music in the metaverse. These collectives can be composed of the major leaders in the music industry.

The potential for music NFTs to shape the future of the music industry

The impact of NFTs has been enormous, reverberating throughout the digital, financial, and creative sectors. But, it appears that the music business is the only one offering the most noteworthy example of how blockchain technology can make co-creation and co-ownership of intellectual property possible.

NFTs are more than simply a trendy acronym. When the value propositions of NFTs are thoroughly examined, the possibility for equal pay, more collaborations, and remixes is set to change the music industry. The key will be for NFTs to constantly reinvent themselves and expand creatively—just like the musicians they support.

NFTs have empowered independent musicians to support themselves based on the principle of digital ownership. With the widespread adoption of NFTs on the horizon as some of the world’s most successful companies enter the non-fungible sector, a paradigm change inside the music industry becomes less far-fetched in the coming years. 


Shaheen is the Head of Blogs at AMBCrypto. With over seven years of experience as a journalist, editorial specialist, and content marketer, she has produced content for broadcast, print, and digital news mediums. Her major focus lies in tech, crypto, esports and gaming, business, and digital marketing. Superpower? Metamorphosing words into currency.
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