Explainer: How Do Musicians Make Money With NFTs?

Explainer: How Do Musicians Make Money With NFTs?

The popularity of NFTs (non-fungible tokens) has exploded even in the music industry. Big music brands and music personalities are getting on the NFT action. That is because Music NFT auctions and sales offer musicians an exciting opportunity to monetize their artworks.

What is a music NFT and how can you create one?

An NFT is a non-fungible token and it represents ownership of a digital asset on a blockchain. For musicians, it represents a song or an audio file that is in high-quality formats like MP3, WAV, and OGA.

How can musicians create an NFT for music?

There are multiple platforms where musicians can create their NFTs. Some of these are Rarible, OpenSea, and more. Here is the systematic process about how musicians can create their NFTs on Rarible.com and how they can make money by selling these.

  1. Description
  2. Royalties for income from sales on the secondary market
  3. Properties like the size of the file (optional)
  4. Alternative text for NFT (optional)
  5. Price for every instance of NFT

Strategizing NFT selling

According to the industry stats, music artists take home only 12% of the profits that production labels make on their music files. But NFTs can change this for the musicians because by selling their music NFTs musicians can pocket almost all the money that their music NFT makes. NFTs have paid an important role in musician’s careers during pandemic times when the touring income had come to a stop. NFTs made it possible for musicians to reach out to a global audience all by themselves.

Listing the NFT on leading marketplaces

Fixed-price listings: This is the simplest way to list music NFT. While listing, the musician picks a fixed price option, currency of his choice and can choose the expiration date of the listing.

Earnings from music NFT sales

NFT marketplaces like OpenSea and Rarible allow musicians to collect royalties on their future NFT sales. This means whenever the music NFT sells, the creator or owner of the NFT receives secondary sales fees. This percentage is set when the musician mints his music NFT.

Promoting the NFT

For big brands like 3LAU selling music, NFTs is easy because they already have a huge fan base. What about a budding musician? Is selling music NFT an avenue for him to make money? Well, the answer is yes.

Bundle up the NFTs

Platforms like OpenSea allow NFT creators to bundle up NFTs and sell them in one go. This helps with quick sales and saves service fees for the music creators.

Wrapping it up

The current music industry payout model has some significant barriers. A musician can stream his music on platforms like Spotify, YouTube, and more. To use these platforms the musicians, need to pay a monthly subscription fee to the platform. However, it takes almost 3 months for the music artist to start being paid for the audio streaming.

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