Music NFT market update
Cherie Hu
Water & Music
April 25, 2021
NOTE: This deck was updated on April 25, 2021, due to an initial misreporting of Snoop Dogg’s NFT sales; his total to date is around $1.8M, rather than $13M.
tl;dr
Table of contents
Click to jump straight to whichever section you’d like
Data disclaimers
The data that informed this research was compiled via a highly manual process of monitoring over 20 different NFT marketplaces on a daily basis between June 6, 2020 and April 25, 2021. There may be a geographic bias, as most of the platforms and artists featured are based in the U.S. and Europe. That said, we can guarantee that our dataset is the most comprehensive and reliable aggregation of music-specific NFT transactions that you will find on the Internet.
All sales figures in this report are primary-only (i.e. no secondary transactions) and recorded at the point of final sale in USD, using historical crypto exchange rates. With the volatility of crypto prices, keep in mind that the current value of a given music NFT is likely different from what it was worth at the time of its primary sale. This is normal.
Last but not least, our data does NOT include social tokens or any other fungible token types. While social token applications in music are certainly exciting, they are beyond the scope of this particular analysis.
Terminology used in this deck
“Music NFT” = any NFT sold by a musician. The NFT itself does not have to be tied to a specific musical recording, but 50% to 100% of revenue from the NFT’s primary sale has to be going to a musician.
“Single-copy auction” or “1/1 auction” = A type of NFT campaign in which a single copy is sold via an auction process, where people can bid openly on the final price.
“Fixed-price sale” = A type of NFT campaign with no auction process — i.e. the price is fixed ahead of time, and buyers have no say over the final price at the point of primary sale. Usually, more than one copy is sold.
I. PRICING & DEMAND TRENDS
$60.2M
in music NFT sales since June 2020,
generated from over 55,000 total NFTs
$55.7M
of those sales happened in the past two months (Feb 25 – Apr 25, 2021)
Thanks to multimillion-dollar auctions from Grimes and 3LAU, there was a huge spike in music NFT activity in February and March 2021, with sales reaching $20M–$30M a month.
Sales in April seem to have slowed down, perhaps reflecting dwindling hype. That said, upcoming high-profile auctions from Eminem, Ryan Tedder, Lewis Capaldi and Weezer at the end of the month will likely bring April’s total closer to February and March levels.
One of the biggest myths about the music NFT market right now is that the vast majority of revenue is being generated from single-copy, 1/1 auctions, where scarcity inflates the final bidding price. This is simply NOT TRUE!
60.4% of music NFT revenue to date ($36.3M) has come from listings with no bidding process involved — i.e. where the NFT price is fixed at the point of sale. Auctions (silent and 1/1) account only for the remaining ~40%.
The average auction price of a single-copy music NFT has grown over 5x in the last six months, from ~$15,000 in November to ~$77,000 so far in April. This figure will likely continue to balloon as more celebrities and major labels warm up to the market.
Based on data from June 2020 to April 2021, the average single-copy music NFT is 102x more expensive than that of a fixed-price NFT ($69,957.22 vs. $684.71). Still, this shows that even the most financially “accessible” music NFTs with slightly less scarcity are being sold at a much higher price point than what we would expect from a typical concert VIP package. In other words, this economy is financially out of reach for the vast majority of fans.
II. ARTIST, LABEL & GENRE TRENDS
Approx. 150
musicians and music brands have sold NFTs in the last year.
The point really needs to be driven home that this is an EXTREMELY small number compared to the number of working musicians today, and that the NFT economy has only impacted a small niche of artists and fans to date. It is far from the “new normal.”
Top artists by all-time primary music NFT revenue
Artist name | Total primary music NFT sales | Number of NFTs sold | Average price per NFT |
3LAU | $17,464,687.85 | 5,900 | $2,960.12 |
Grimes | $6,340,645.70 | 1,122 | $5,651.20 |
Steve Aoki | $4,265,988.88 | 1,215 | $3,511.10 |
The Weeknd | $2,293,471.80 | 3,758 | $610.29 |
ODESZA | $2,121,460.88 | 1,080 | $1,964.32 |
Gramatik | $1,595,659.00 | 823 | $1,938.83 |
Zedd | $1,526,397.71 | 1,331 | $1,146.81 |
Snoop Dogg | $1,808,864.00 | 4,054 | $446.19 |
deadmau5 | $1,714,365.79 | 6,944 | $246.88 |
Don Diablo | $1,462,846.00 | 2 | $731,423.00 |
The majority of 3LAU’s all-time music NFT revenue came from his Ultraviolet auction, which was executed with the Origin Protocol and had 33 winners.
deadmau5 currently holds the record for largest volume (i.e. units) of music NFTs sold — largely thanks to a 6,000-unit NFT drop he pulled off in December 2020 on the WAX Blockchain, in partnership with Emanate’s RAREZ project.
Don Diablo made it to No. 10 on the all-time list thanks to selling just two NFTs — both on SuperRare, and featuring an unreleased song and exclusive live footage.
Examples of music brands that have launched their own NFTs
IAMSOUND — indie label, creative agency and artist management company that partnered with Zora on an extensive audiovisual NFT exhibition.
Foreign Family Collective — indie electronic label and creative agency that has sold 200+ NFTs on Nifty Gateway.
Monstercat — indie electronic label and publisher that has sold 500+ NFTs on Nifty Gateway.
Proximity — indie electronic label and curator that has sold 100+ NFTs on Nifty Gateway.
Dream Catalogue — experimental electronic label that has sold 200+ NFTs on Nifty Gateway in collaboration with the visual artist Kidmograph.
No Neon Records — indie electronic label that has sold 30+ NFTs on Blockparty.
Death Row Records — historic hip-hop label that partnered with Fanaply on a series of NFTs commemorating their 30th anniversary (these have yet to sell out).
Space Yacht — indie dance concert promoter that has sold nearly 700 NFTs on Nifty Gateway.
National Independent Venue Association (NIVA) — trade group dedicated to supporting indie venues in the U.S. throughout the pandemic; sold nearly 200 NFTs for charity on Nifty Gateway and MakersPlace, in collaboration with Young & Sick.
Independent artists and brands command the majority of all-time music NFT sales (68.4%, or $41.2M), and continue to set the standard for the rest of the ecosystem in terms of pricing trends and inventive use cases.
That said, major labels are quickly catching up. February 2021 marked a key inflection point, when major-label acts like Mike Shinoda and Chet Porter started selling their own NFTs. Dozens of other celebrity acts soon followed, generating $19M — or 32% of all-time music NFT sales — in a matter of just a few months. We should expect major label artists to at least equal, if not surpass, indie/unsigned artists in NFT revenue by the end of this year.
The vast majority of NFT revenue to date has gone to electronic artists (80.7%, or $48.6M). This is unsurprising, given how consistently electronic artists have been early adopters of emerging tech throughout history.
That said, hip-hop and rock artists are growing faster than ever in the market and are vying for the runner-up position, each accounting for around 7% to 9% of all-time music NFT sales.
Other genres including pop, folk, classical, jazz and reggaeton are still catching up.
III. PLATFORM & PROTOCOL TRENDS
To date, the platform Nifty Gateway alone has processed 67% of all music NFT sales ($40.3M). Nifty Gateway specializes in highly curated, Supreme-style drops from celebrity figures in music, art and entertainment; recent customers include The Weeknd, Zedd and Halsey.
That said, a few other companies are growing more quickly by market share. The Origin protocol, which accounts for 19.5% of music NFT sales, takes a more white-label approach to helping artists and personalities run bespoke NFT campaigns. This customizable approach is quickly making Origin the partner of choice for the likes of 3LAU, Lupe Fiasco and Ryan Tedder.
Other smaller or newer platforms/protocols including Crypto.com, SuperRare, OpenSea, Foundation and Zora are vying for the remaining 13.5% of the market.
Other emerging platforms to know
FansForever — runs on the Tron protocol; recently partnered with Lindsay Lohan on a single-copy NFT around her new song “Lullaby,” which ultimately sold for $134,245.13.
Owens Market — partnered with Shontelle on an NFT auction around her new single “House Party”; 11 winners received a signed vinyl record plus access to unreleased music.
Bluebox — run by music distribution company Ditto Music; aims to use NFTs to facilitate more efficient licensing and rev-share deals between artists and fans, with launch partners including Taylor Bennett and Big Zuu.
Catalog — music streaming, discovery and NFT platform running on the Zora protocol, dedicated to showcasing “1/1 digital records” from independent artists including Richie Hawtin, laxcity, LATASHÁ and dozens more.
We should expect, and push for, musicians to benefit from the vast amount of venture capital money being thrown into NFT marketplaces this year. (Click on any of the headlines above to read the corresponding news article in full.)
The big question for platforms
How will exclusive NFT marketplaces really differentiate themselves long-term, if NFTs technically live on a decentralized blockchain architecture that cannot be siloed to a particular Web 2.0 website or app?
IV. EMERGING USE CASES FOR MUSIC NFTS
Meme stocks
Pictured: Screenshot of Nathan Evans’ single-copy NFT “Elon’s Starship,” which was created in collaboration with Jon Monaghan and sold for $4,500 on Crypto.com.
Philanthropy
Pictured: Screenshot of the artwork for the Bowery Ballroom Golden Ticket, which sold for $11,527.24 on MakersPlace as part of NIVA and Young & Sick’s Save Our Stages campaign.
Fractional IP ownership and investment
Dynamic art
Pictured: Screenshots of select artworks generated in real time and dynamically changing (sometimes in reaction to user input), as part of the ByteBeats project from Dadabots and Kai.
Live events
Pictured: Screenshot of the artwork for a collaborative jam between Tim Exile and 1x1, which was minted after the fact as an NFT on Hic et Nunc.
Visual music discovery
Pictured: Screenshot of the Collectibles tab on RAC’s Audius profile, which allows the artist to display NFTs that he has created and collected.
V. TOP MUSIC-INDUSTRY CONCERNS
Lack of long-term vision
Beyond NFTs, the use cases for crypto are seemingly endless (thanks Jack Spallone for this list).
The point is, if you only see NFTs as a short-term cash grab, you’re doing the technology an injustice.
High barrier to entry for fans — and artists
Copyright ownership (of course)
Gender and racial diversity
Do we really need NFTs to do this?
Thanks for reading.
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