Cooper Turley is a cryptocurrency investor and advisor.
Turley says we’ll see an influx of new music debuting natively through Web3.
While there are still real issues with music NFTs, he remains bullish.
Music NFTs are Web3’s next big trend. To date, more than $5 million in tokenized music has been sold across leading Web3 platforms like Catalog, Sound and Royal.
I’ve been fortunate to have a successful career in Web3: I turned a five-figure investment in 2017 into a lucrative portfolio of tokens and NFTs and became a millionaire through crypto. And I was lucky to be featured on Fortune’s most influential people in NFTs.
Here’s why I’ve invested over 100 ETH (or over $300,000) into music NFTs and what everyone needs to know about them.
Many artists have already minted music NFTs
Well-known artists like Snoop Dogg, Nas and Diplo as well as rising stars like Daniel Allan, LATASHÁ, and Haleek Maul are all minting music NFTs.
Music NFTs are tokenized singles, EPs or albums. In the same way we buy a physical vinyl, music NFTs are a digital version that represent a fixed quantity of a creative work, pressed on a blockchain like Ethereum or Solana.
With music NFTs, there are a limited quantity of copies available for purchase and a global marketplace determines their value.
A look at a Music NFT, “So You Fell in Love,” by Felly on Catalog which I collected.
Cooper Turley.
Music NFTs are a new revenue stream for musicians
Music-related NFT sales have predominantly been driven by independent artists because they offer a new revenue stream for musicians with superfans. Independent artists have been the first to jump on board.
Given that most independent acts have the least amount of counterparties and collaborators to work with, it’s easier for them to commit to a Web3-native release strategy.
Many artists are leaning in favor of music NFTs over using a label, largely due to a revenue stream which allows them to keep upwards of 100% of their master royalties.
But this doesn’t mean that music NFTs are anti-label. In fact, labels may evolve to offer a robust suite of services around curation, royalty collection, partner relations and community management.
At its core, music NFTs are a collectible version of a song
Music is complicated because there are many rights holders, and many income streams. For any song, there are two sides to a record, the master royalties and the publishing.
Both of these sides have different owners, from a songwriter to a label.
With music NFTs, the collector can sell it to another buyer if they want to. This prefaces a conversation around rights ownership. Projects like 0xSplits are partnering with music NFT platforms like Sound.xyz to help, but this is the tip of a much deeper iceberg that still needs to be solved.
A breakdown of on-chain royalty splits for collaborators on the Sound.xyz drop with Soulection
Cooper Turley
You can find music NFTs on platforms like Catalog, Sound, and Royal
Today, most of the major music NFTs platforms are curated. This means artists must be accepted to join and register on platforms like Catalog, Sound, or Royal. While the acceptance criteria is not clearly defined, we typically see artists who are most active in Web3 accepted.
Once accepted, the artist has the ability to “mint” their song, or convert a digital file into a digital asset. The artist then sets a fixed quantity (1, 25, 200, 1000 for instance) and a price per token.
Sound: With Sound, songs are released as editions (usually 25 or 30 in total), typically at a starting point of 0.1 ETH or roughly $300. You would use Sound if you want to offer a larger number of editions to fans.
Royal: With Royal, songs are released in high quantities (usually 500 to 1000 in total), typically at a starting price of $50. Royal NFTs — called Limited Digital Assets — also come with a percentage of ownership. You would use Royal if you’re an established act looking to offer master ownership to an already released record.
Catalog: With Catalog, all songs are minted as 1 of 1s, meaning there is only one copy of that music NFT ever in existence, and typically with a reserve price of 1 ETH, or roughly $3000. You would use Catalog to tokenize your existing records, or to offer an extremely limited version for one superfan.
Once a token is minted, any fan can come and place a bid or make a purchase.
At this time, the NFT is transferred to the winning collector’s wallet. They are able to re-list that NFT at any point, with the original creator entitled to a percentage of sales.
Many music NFTs are songs that have already been released
It’s important to note that anyone can freely stream the song, but only a select few can own it as an NFT. That’s because music NFTs earn their value from a mix of fandom, access and curation. Think of it as a bet on the artist’s future.
However, most collectors (like myself) are simply excited to collect a scarce version of a tokenized record.
The vast majority of music NFTs today are tokenized versions of songs that have already been released in the past. Commonly, the songs underpinning most music NFTs are distributed on traditional
One example is Felly’s song, “So You Fell in Love,” a record with 2.5 million plays on Spotify, selling for a cool 2 ETH (or ~$6000) on Catalog.
Another is Healy’s “$150 / roll widdit,” his first-ever release with 16.5 million plays on Spotify, netting 1.575 ETH (or ~$5000) on Catalog.
Some artists will host listening parties
On Sound, artists bring fans together through a Twitter Space room 30 minutes in advance of a “drop.”
When the song releases (typically at 2:00 PST), everyone on the site listens to the track through a Listening Party. This is a window when the site plays the full song prior to anyone having the ability to purchase it as a music NFT.
Preview of a listening party on Sound.xyz
Cooper Turley
Once the song finishes, collectors can purchase a tokenized version of the track, good for a seat in the Audience.
Most Sound drops net an artist at a minimum 2.5 ETH, good for ~$7000 at today’s prices or the equivalent of more than a million Spotify streams.
The Sound.xyz Audience tab for Daniel Allan “Too Close”
Cooper Turley
Once a track drops, a secondary market becomes available on OpenSea. Here, anyone who collected the track can relist their NFT at a price of their choosing, with 10% of any secondary sales going directly back to the recording artist.
A sold out Sound.xyz drop.
Cooper Turley
The rush of collecting music NFTs is exhilarating
There’s a pressure to purchase before it sells out, and an added incentive to keep a close eye on the secondary market.
With Sound, every drop comes with a single “Golden Egg,” or the rarest version of the drop. It’s randomly assigned, and there’s a game to be played waiting for someone to list the Golden Egg for a collector like myself to purchase it off the secondary market.
To date, I’ve acquired 12 Golden Eggs and counting!
Background information on Unicorn DAO’s Sound.xyz drop.
Cooper Turley
These tracks frequently then appear on streaming platforms later.
OpenSea collection for Oshi’s Sound.xyz drops.
Cooper Turley
Music NFTs are like SoundCloud in 2013
The Web3 music landscape is growing at a rapid pace.
A look at the Music NFT landscape as of May 2022
Cooper Turley
Right now, music NFTs are primarily for NFT collectors and independent artists looking for a fresh slate. But in the coming months, we will start to see all your favorite artists releasing music NFTs.
Plus, we’ll see new projects debut natively through Web3:
Bored Brothers: a Bored Ape Yatch Club avatar project between Kygo and Ryan Tedder that debuted on Sound last month with their single “Drip”
RŌHKI: a pseudo-anonymous Web3 artist project that’s set to mint its first music NFTs on May 16th.
Angelbaby: a Fluf World avatar incubated by Hume, who has been performing across the country at different Web3 events as the world’s first “metastar”
There’s a vibrant culture of music NFT artists starting to pop up, and we’ve only seen the tip of the iceberg.
But there are very real problems with music NFTs
Of course as we grow the next chapter of music, we need to be aware of the issues surrounding music NFTs, like accessibility (they’re expensive and aren’t accessible to the average fan), utility (in most cases, you’re purely buying a collectible), and IP (there is currently no standard around how to monetize music NFTs), to name a few — we definitely have a long way to go.
However, I still believe music NFTs are going to be huge. And the quicker you get on board, the better position you will be in to hold valuable, rare, and sentimental NFTs.
Until then, I’ll see you at the next Listening Party!
Cooper Turley is an investor, advisor, avid NFT collector, and was featured on Fortune’s 2021 NFTy 50 list.
