State Champ Radio blockchain
Vault Music — a platform created by the co-founders of online sports betting company FanDuel that allows artists to create exclusive, limited-edition music releases — has launched a new game that lets players create and manage their own fantasy roster of musicians for cash prizes.
Dubbed Fantasy Record Label, the game — launched by Nigel Eccles and Rob Jones — is designed to create a new revenue stream for emerging musicians while simultaneously giving music fans a way to invest in artists.
To play, users are invited to “sign” five artists on Vault Music by purchasing a “vault” — a digital music collectible built using NFT technology — from the artists they see as having growth potential. Rosters are scored on the change in artists’ Spotify monthly listeners count, a metric that’s updated daily. Final standings are calculated by adding all five artists’ Spotify monthly listener gains and losses over a one-week period, after which the top 10 fantasy record labels win cash prizes.
As an artist becomes more successful, demand increases for their vaults, thereby raising the price of those assets and benefitting players who have “signed” them to their rosters. Players can buy, sell or trade vaults each week. Artists receive 70% of each sale, with 15% percent taken in processing costs and Vault Music taking an additional 15%. Each time one of their vaults is resold, artists receive 7% of the resale price.
“Think fantasy sports but for the music industry,” said Eccles, co-founder/CEO of Vault Music, in a statement. “I believe that unlike the sports and gaming industries, music has failed to energize top fans and embrace new formats. Streaming has been great for the music industry’s bottom line, but it serves passive listeners, not diehard fans. Our goal is to bring joy, pride, and competition back to collecting music, and create upside for both fans and artists in the process.”
Successful players also receive “Vault points,” which are airdropped each week based on performance and which are designed to encourage roster optimization and long-term strategy. “Over the next few months we plan to reveal more about the value of points,” Eccles tells Billboard. “Our first players are helping build the ecosystem so we want to use points as a way to track that so we can give back to them when the product is more developed.”
According to Eccles, nearly all artists on Vault Music will be available for players to “sign.” Some of the more prominent artists on Vault Music currently include BLÜ EYES, Jordan Hart, Naika, Telescreens and FLETCHER.
“The best part about this game is that we’re using fandom to put more money in artists’ pockets at the time when they need it most,” added Kara Burney, chief marketing officer at Vault Music. “Already we’ve seen artists earn more with a single release on Vault Music than they’ve earned from streaming in a year. That’s because in our game, just as with real record labels, up-and-coming artists have the most potential upside. Our players are incentivized to discover, collect releases, and sign the next music stars to their fantasy label before their big break. It’s a music economy where everybody wins.”
At launch, Fantasy Record Label is only available in the United States, though Vault hopes to extend it to other markets soon.
Audius, a blockchain-based streaming platform, launched its music marketplace in beta on Wednesday (Nov. 1), meaning that its user base — which has ranged between 4 and 7 million in recent months — can now send direct payments to their favorite artists.
“We were a marketplace for engagement and attention,” Roneil Rumburg, co-founder/CEO of Audius, tells Billboard. “But talk to any artists — what’s top of mind for them is, ‘How am I going to pay rent next month?’ This feature allows them to make the following they have a financial asset. There’s a structure to monetize via Audius now rather than just building a fan base.”
More than 40 acts, including RAC, Matt Ox and Cheat Codes, will participate in the beta program, which Audius hopes to roll out widely in the first quarter of 2024. Artists can set prices for fans to stream a previously unreleased demo or download stems to participate in a remix competition, for example. And fans can pay artists more than that price if they’re particularly excited about an offering.
“What we heard [from users] is they were looking for a deeper way to engage with artists,” Romburg explains. He likens allowing them to tip extra on top to “the behavior pattern you see from the folks who buy vinyl even though they don’t have a record player at home — they want to support that artist.” (Users are further incentivized to support artists via a matching program: If an act sells access to a track for $1, for example, that act and the purchaser each get 1 $AUDIO tokens, which helps them gain more voting power on the community-run platform.)
Implementing a monetization option has also allowed Audius to build new bridges to the traditional music industry for the first time. “This monetization feature set saw fairly broad buy-in,” Rumburg says. The platform is partnering with DistroKid, allowing a large number of independent acts the option to put their music on Audius, and Beatport, an important hub for the dance music community. In addition, Audius is announcing its first set of label partners, a group that includes EMPIRE, Nettwerk Music, Circus Records and Anjunadeep, among others.
Rumburg cautions that “the way the deals with the labels coming on are structured, it’s not like their whole catalog gets shoved into Audius.”
“Uploading the same music that’s available everywhere else probably wouldn’t work,” he continues. “Where we’ve had the most success is when artists are sharing weird, different things that they probably wouldn’t feel comfortable sharing with their broader fan base. Something like sharing early draft versions of future content to get feedback — the most highly engaged part of the fan base loves that s—.”
But under the new deals, Romburg adds, “When content is shared on Audius that’s owned by a label, the payments will flow correctly.”
The music industry has progressed rapidly over the last decade. TikTok is launching music careers, sites like YouTube are creating new distribution channels and artists like Grimes are open-sourcing their vocals for generative AI creation. But for all of that progress, the opaque systems that control the industry are not in favor of artists driving culture. As listeners, we’ve seen the tip of the iceberg with Taylor Swift’s highly publicized re-recording of her masters and Megan Thee Stallion’s legal dispute with her record label over unpaid royalties.
Music is the most consumed category of art on the planet, and it’s time to evolve the system so that all artists — from top recording stars to indie creators to those who are just getting their careers started — are set up to succeed. But to really grasp what’s needed to shift the power dynamic in the direction of artists, it’s important to peel back the complexities of music revenue.
Changing the narrative on music revenue
There’s a false narrative that is pervasive in the media that says music doesn’t generate any money, driven in large part by the litany of really bad record deals that draw public attention (like the aforementioned Megan Thee Stallion example). But in reality, music makes money — it’s the artists who don’t get paid what they deserve.
The streaming revolution of the 21st century has transformed the way people consume music. But despite streams making up 80-90% of the industry’s revenue, artists see few of those dollars after industry players take their inevitable cuts. Though record labels serve a valuable role in the music ecosystem (from marketing and developing an artist to licensing and distribution), artists can be haunted for decades by bad deals signed early in their careers that unknowingly give away creative control and a significant portion of their future earnings. Artists who have signed contracts with unfavorable terms typically don’t earn negotiating power until they’ve amassed a large following and a fruitful career.
Why the bad deals?
Most artists simply don’t know what they’re signing — it’s not necessarily that they’re making a bad decision. As an artist myself, I experienced this firsthand early in my career. It would take years for me to get paid for my songs — and as someone who’s proficient in accounting from my time studying business in college, my inability to see how much I made from my music was mind-boggling.
The reason that deals are so opaque is that music revenue is growing and coming from more sources than ever before, which creates a complex web of intermediaries within the ecosystem. Every different distributor has a different deal with every different streaming service, and every label has a different deal with every streaming service. And the streaming services are not transparent about how their rates differ across these various deals. Beyond that, there are numerous types of royalties — from performance royalties to mechanical royalties to in-app streaming royalties. Therefore, when it comes to signing on the dotted line, artists must blindly place their trust in a network of counterparties, lacking any real visibility into their actual earnings once every entity has taken their cut. All of this is perpetuated because record labels are incentivized to control information so they can make more competitive deals with artists.
As a result, artists gravitate to what comes naturally — the music. They don’t want to worry about the business side of things because the system isn’t set up in a way that empowers them to ask questions or negotiate favorable deals, and it distracts them from doing what they love.
Finding the opportunity in technology
To rewrite the way music institutions approach music revenue and income, we need to make it as transparent as possible. It seems like a lofty goal for an industry that has long been set in its ways, but technology is making it possible. My company Royal recently launched a free tool that allows any artist to estimate the streaming revenue for their songs. The hope is that artists become more empowered to make deals that uplift their careers.
I’ve also been bullish on crypto since its earliest days, for a variety of reasons, including its ability to transform the music industry with transparency. Blockchain is inherently transparent — in fact, the one thing you can’t do on a blockchain is hide information. It’s all there, at all times. It’s also time-stamped which establishes a clear provenance (traceability of ownership over time). This is especially useful in the music business, where copyright infringement plagues artists and record labels alike. Perhaps most importantly, leveraging tokens that represent rights enables artists to see the value of their songs and create tangible benchmarks upon which to negotiate better deals. With more information always comes more power.
Artists don’t know how much money they’re missing out on, but they could. And it doesn’t have to be a public battle when they do find out. If we embrace technological progress to improve outdated systems, we can create an open data ecosystem that gives artists not only more transparency into their earnings and fan bases but more control over their artistic careers. Better deals alongside more creative freedoms is a winning combination that can define the next 30 years of music — we just have to be willing to change.
Why should artists even care?
As much as streaming has changed the music industry for the better, there are still unanswered questions about how value accrues in this system. Do we equate the value of passively listening to a sleep playlist in the background to actively listening to your favorite album with friends?
This talk of numbers and questions of value may seem like a distraction for artists who just want to spend their time making music — but ignoring this topic completely opens the door to predatory industry practices that threaten musicians’ longevity and entire legacies.
More industry transparency should improve all the variables that play into an artist’s career and result in musicians keeping more ownership of the art they create. Having the humility to acknowledge what music is actually worth is the first step in unlocking more value in this new era of the industry.
Justin Blau is CEO of Royal and a world-renowned musician and producer, known as 3LAU. An early crypto adopter, Justin has been advocating for building the investable layer of music on blockchains since 2017. In 2021, he founded Royal to empower artists to share their music with fans and give people the opportunity to invest in music.
March saw the launch of two Web3 record labels, a free NFT from Grimes and NFT streaming royalties tied to several viral hits. Overall, the crypto market has bounced back with Ethereum now 100% higher than its lows of last year, injecting some optimism back into the crypto economy.
However, it was a weaker month for music NFTs — a common symptom of the NFT market when crypto prices are trending higher as many buyers prefer to hold onto their ETH as it gains value. Volume across the 10 biggest projects netted 381 ETH compared to 1,016 ETH in February. In dollar terms, it’s $697,393 compared to February’s $1.6 million. Based on analysis of sales data from 19 different NFT platforms, independent releases combined with secondary sales volume on OpenSea, here are the 10 biggest-selling music NFTs and collections in March 2023.
1/ Helix Records Genesis PassMonthly trading volume: 137 ETH ($250,710)Primary sales (March): ~91 ETHSecondary sales: 46 ETHDrop date: March 10
Patrick Moxey, founder of PayDay and Ultra Records, has launched a new label with Web3 at its heart. Helix Records sold 3,333 NFT genesis passes in March, granting access to the inner workings of the label. Holders can pitch their music to Helix Records’ A&R team, get access to free tickets and claim a free NFT of Marshall Jefferson’s iconic house classic ‘Move Your Body.’ Moxey aims to onboard the label’s entire roster of dance artists into Web3.
View the collection on OpenSea.
2/ Grimes – Gen-1 AvatarsMonthly trading volume: 60.7 ETH ($111,081)Primary sales (March): 60.7 ETHSecondary sales: N/ADrop date: March 24
To celebrate a performance at Ultra Festival, Grimes dropped a free NFT on Web3 platform Zora in March. The Grimes Gen-1 avatars will unlock quests, exclusive music and other digital experiences. More than 78,000 were minted in a 7-day window. Although the NFTs were free, each edition was subject to a 0.000777 platform fee which generated a total of 60.7 ETH.
View the collection on Zora.
3/ Dreams Never Die – Founders PassMonthly trading volume: 46 ETH ($84,180)Primary sales (March): ~40 ETHSecondary sales: 6 ETHDrop date: March 15
Dreams Never Die is a record label founded by Chad Hillard, credited for discovering Billie Eilish and breaking “Ocean Eyes” through his music blog HillyDilly when the track had less than 1,000 plays on SoundCloud. Fast forward eight years and Hillard’s record label Dreams Never Die has established itself deeply in Web3 culture.
The label was the first to release a debut single as an NFT via their flagship artist Sloe Jack and last month launched a thousand Founders Passes. The NFT gives holders the opportunity to participate in the label as scouts and other roles, as well as get direct feedback on music.
View the collection on OpenSea.
4/ KINGSHIP – Key CardsMonthly trading volume: 37 ETH ($67,710)Primary sales (March): N/ASecondary sales: 37 ETHDrop date: July 2022
The Bored Ape supergroup launched a new initiative in March called Crowns. Members of the KINGSHIP community can earn Crowns by helping out new members, retweeting social posts, sharing music and engaging in the Discord server. The Crowns can then be redeemed for items in the upcoming KINGSHIP digital store.
View the collection on OpenSea.
5/ Violetta Zironi – Another Life Monthly trading volume: 30 ETH ($54,900)Primary sales (March): N/ASecondary sales: 30 ETHDrop date: Feb. 20
Italian singer-songwriter Violetta Zironi recently launched a new collection, Another Life — an EP encompassing five tracks and 5,500 unique profile picture illustrations. Holders get access to virtual shows, live concerts and the ability to use the songs for their own projects. The project launched in February but continued to generate strong secondary sales through March.
View the collection on OpenSea.
6/ Maddix – Heute NachtMonthly trading volume: $36,990 Primary sales (March): $36,990Secondary sales: N/ADrop date: March 15
Producer Maddix released Heute Nacht in October of last year and it quickly turned into a viral hit, racking up 20 million Spotify streams in five months. In March, the track was released as a collection of 260 NFTs via Royal, offering a percentage of streaming royalties in the hit song. 250 ‘Gold’ tokens give holders 0.0295% of royalties while 10 ‘Diamond’ NFTs offer 0.262% ownership.
7/ David Guetta, Martin Garrix, Romy Dya, Jamie Scott – So Far AwayMonthly trading volume: $30,781Primary sales (March): $28,000Secondary sales: 1.52 ETH ($2,781)Drop date: March 28
With 352 million streams, So Far Away dropped as a collection of 200 NFTs in March, each offering 0.01% ownership in the track. The NFT was released via Anotherblock which unlocks streaming royalties in major hits, usually via a producer or songwriter’s share rather than the lead artist. In this case, the NFT is released through featured artist Romy Dya.
8/ Reo Cragun – SpentMonthly trading volume: 15.6 ETH ($28,548)Primary sales (March): ~7.5 ETHSecondary sales: 7.9 ETHDrop date: March 28
Rapper and producer Reo Cragun has been at the forefront of independent Web3 music for the last 18 months, previously appearing in this chart for his EP Criteria with Daniel Allan in December. Cragun returned in March with a new single “Spent.”
The track was the first to use a new drop format on Web3 music platform sound.xyz called Sound Swap. The mechanism begins with a familiar 24-hour mint period where fans can buy as many editions of the song as they want for 0.005 ETH (~$7). However, when the 24 hour period ends, the price rises steadily for each additional purchase.
If there is sufficient demand and the price rises, existing collectors can instantly sell at the current price — an innovative upgrade from trying to trade or sell NFTs on a secondary market like OpenSea. The track generated 1,500 mints in the first 24 hours and an additional 350 mints using the Sound Swap mechanism.
View the collection on OpenSea.
9/ Illenium – Phoenix Family Founders PassMonthly trading volume: $28,000Primary sales (March): $28,000Secondary sales: N/ADrop date: March 29
DJ and producer Illenium launched a Web3 fan club in March called The Phantom Family, powered by tech platform Medallion. Once inside, fans could mint the Phoenix Family Founders Pass for $25 each, giving them access to a digital jersey, fast-track access to merchandise and exclusive content. Illenium sold 1,132 in a two-day window.
View the collection on OpenSea.
10/ Wes Ghost – SleepwalkingMonthly trading volume: 12.6 ETH ($23,058)Primary sales (March): 10.7 ETHSecondary sales: 1.9 ETHDrop date: March 16
Wes Ghost exploded onto the Web3 music scene in March with a debut single “Sleepwalking” — a pop-punk electronic crossover anthem. Using an NFT character from the “Kid Called Beast” NFT collection to front the project, Wes Ghost sold 2,351 editions of the track by tapping into dozens of different NFT communities through giveaways and cross-collaboration.
View the collection on OpenSea.
Methodology: The chart was compiled using data from primary music NFT sales across 19 different NFT platforms, independent releases and combined with secondary volume data from OpenSea. Data was captured between March 1 – March 31, 2023. Conversion rates from crypto to US dollars were calculated on March 31.
Disclaimer: the author owns NFTs from Reo Cragun and Dreams Never Die, however, the above list is based purely on sales data.
Multimedia Music secured a $100 million investment “uplift” from its group of investors and lenders, including Metropolitan Partners Group, Bardin Hill, Pinnacle Bank and Regions Bank, according to a press release. That grows the company’s total funds raised to $200 million. Multimedia Music also announced a deal to acquire the catalog and income streams of Emmy-winning composer Sean Callery (Homeland, 24, Bones). Launched in 2022 and led by music industry veterans Phil Hope and James Gibb, Multimedia Music with the goal of acquiring catalogs of film and TV music rights from production companies, composers and other rights holders. The company says it has so far spent over $120 million on acquisitions, including the catalog of film composer James Newton Howard and the film music library of STX Entertainment, which it purchased in February.
Reactional Music, a startup specializing in music personalization for video games, licensed the catalog of Merck Mercuriadis‘ Hipgnosis Song Management. Reactional owns patented technology that allows any music to be brought into a video game, where it reacts live to various elements in the game, including visuals and sounds — thereby creating a “personalized” experience for gamers. Reactional tracks all music use across the platform, while its Reactional Engine does not alter, mix or edit the music master. It previously partnered with Tuned Global, Musiio and Blokur for music delivery, consistent tagging and rights management of all music and sounds. “The intersection of games and music is incredibly exciting,” said Reactional Music president David Knox in a statement on the Hipgnosis deal. “Commercially it presents opportunities for both industries with in-game purchases; creatively it is compelling for artists, composers, and games developers to work more closely. And it’s not just new game releases. Reactional’s platform enables curation and personalisation of music in existing games franchises as part of a seasonal refresh.”
Chrysalis Records signed a global agreement with Secretly Distribution that covers all physical and digital distribution for the label’s frontline releases moving forward, including new projects from Laura Marling, Emeli Sandé, Ben Harper, William The Conqueror, The Wandering Hearts and more. The first release under the deal is The Endless Coloured Ways – The Songs of Nick Drake.
Digital electronic music store Beatport struck a partnership with blockchain network Polkadot to launch Beatport.io, a digital collectible marketplace that will bring “electronic music culture to Web3,” according to a press release. Developed and designed in collaboration with Define Creative, Beatport.io will launch on Aventus, a Web3 solutions provider in the Polkadot ecosystem. The new platform will allow record labels and artists to create and sell digital assets and engage with fans. In addition to the launch, Beatport and Polkadot will collaborate on 10 events over the next 18 months, each held to celebrate the launch of a new NFT collection accessible via Polkadot-integrated wallets. The events will be produced by Beatport and “take place alongside major music and Web3 events,” according to the release.
The Orchard acquired Above Board, a dance and electronic music distribution and artist/label services company. Under the deal, Above Board’s roster will have access to The Orchard’s full suite of distribution and artist and label services. Above Board founder/managing director Dan Hill will report to The Orchard managing director Ian Dutt as he continues signing and developing global dance/electronic talent for the label. The Above Board team is now based in The Orchard’s U.K. headquarters. The Orchard’s roster of dance labels also includes Liquid State/Dimitri Vegas, Amtrac, TMRW Music Group and Rose Avenue.
Recently-launched live events company LiveCo acquired faith-based concert promoter Transparent Productions, which works with Christian and gospel music artists including Phil Wickham, CeCe Winans, Casting Crowns and For King & Country.
The Warner Music Group/ Blavatnik Family Foundation Social Justice Fund bestowed a $150,000 grant to Janelle Monáe‘s nonprofit, Fem the Future, which has a mission to create opportunities for under-resourced girls and non-binary youth of color in music, the arts and education. The grant will serve as a pilot for a longer-term collaboration between the two organizations. “This grant will enable Fem the Future to scale up its programming; elevate the power and brilliance of Black girls and non-binary youth; and ensure greater access to life-changing opportunities,” said Warner Music Group/ Blavatnik Family Foundation Social Justice Fund executive director Lorelei Williams in a statement.
Universal Music Central Europe partnered with Web3 music company Centaurify. Under the deal, Universal Music Central Europe will release a series of exclusive, limited-edition collectibles celebrating its artists’ achievements. As streaming numbers grow for artists included in the collection, the collectibles will “evolve,” according to a press release. The collectibles will also grant pre-sale access to future collectibles in the series as well as access to exclusive releases from artists. The first wave of collectibles will be available this year in Norway and Sweden, with more countries to be announced soon.
The U.K. office of digital music company Believe signed a long-term label solutions partnership with drum and bass label Hospital Records for Believe’s new b:electronic imprint. Believe will distribute Hospital’s entire catalog of more than 5,300 tracks to its global network of DSPs while offering audience development services to support growing Hospital’s international reach, including video channel management and strategic support from dedicated genre specialists on Believe’s label management and DSP editorial and marketing partnerships teams. Upcoming releases to be distributed under the deal include albums from P Money x Whiney, Metrik, Hugh Hardie and Flava D. Believe also boasts partnerships with other electronic labels including Metalheadz, Shogun Audio, Cr2 Records, Greco-Roman, Knee Deep in Sound and Southern Fried Records.
Warner Music Czech Republic renewed its partnership with and invested in local hip-hop label Mike Roft to help expand its roster’s global reach. Under the deal, Warner Music will become the sole distributor for Mike Roft’s roster, including Czech superstar Calin — also a shareholder in the company alongside fellow Czech artist D-Kop and video director/graphic designer Radim Zboril. All three will continue to lead Mike Roft as an independent label. Mike Roft is also home to artists including Conspira, KOJO, Indigo and STEIN27.
Voyage, a talent consultancy founded by music executive Spencer Moya, has been acquired by digital-focused talent management firm Select Management Group. In partnership with Select, Voyage will now expand its offerings to encompass artist management services across music, TV/film, creative and fashion. The Los Angeles-based Moya will continue running Voyage as a standalone enterprise within Select.
ASM Global and Frost Bank struck a multiyear deal that names Frost as a founding partner for San Antonio Boeing Center at Tech Port. As part of the agreement, Frost is now the official commercial banking partner for the 130,000-square-foot convention center, which has renamed the premium lux level at the arena as Frost Club.
Independent sales, marketing and distribution company Republic of Music signed a global delivery services deal with distribution management platform Labelcamp. Republic of Music’s label partners — including City Slang, Full Time Hobby and Ghostly — can now upload new releases, manage their catalogs and access daily trend analytics from Labelcamp’s white-label dashboard, while the company’s operations and marketing teams are using Labelcamp to manage release submission from partners and ensure their delivery to DSPs. Labelcamp’s other partners include [PIAS], Because Music, Concord Music Group and Ditto Music.
February was a big month for music and NFTs. Spotify plugged into Web3 with a token-gated playlist experiment, while Def Jam Records signed a virtual band. Snoop Dogg returned with a fresh NFT drop and Rihanna fans got the chance to own streaming royalties in “Bitch Better Have My Money,” right in time for her Super Bowl halftime show — although the NFT drop was not without controversy.
Overall, crypto prices crept higher in February, with Ethereum now up 46% from the start of the year. Based on analysis of sales data from 19 different NFT platforms, independent releases combined with secondary sales volume on OpenSea, here are the 10 biggest-selling music NFTs and collections in February 2023.
1/ Rihanna – “Bitch Better Have My Money”Monthly trading volume: $532,452Primary sales (Feb.): $63,000Secondary volume: 284 ETH ($469,452)Drop date: Feb. 9
While Rihanna was making history at the Super Bowl, her music was making headlines in the NFT space. A portion of streaming royalties in her track, “Bitch Better Have My Money”, were sold via NFTs on Web3 platform Anotherblock, netting $63,000 in sales and a further $469,452 in secondary trading volume. The hype was amplified as Rihanna opened her Feb. 12 halftime set with the track, sending global streaming figures 594% higher in the week ending Feb. 16.
The NFT drop was controversial, though. It was not officially endorsed by Rihanna; instead, the royalties were unlocked through producer DEPUTY’s share in the track, and it’s unknown whether Rihanna was aware of it. The NFTs also quadrupled in value on the secondary market, shooting far beyond logical expectations for return based on the streaming calculations.
The collection was later halted on OpenSea for “promising fractional ownership and future profit based on that ownership” — something OpenSea doesn’t allow — proving that NFT projects positioning themselves purely as investments are still at risk of regulatory scrutiny.
View the collection on OpenSea.
2/ Violetta Zironi – “Another Life”Monthly trading volume: 167 ETH ($276,552)Primary sales (Feb): ~110 ETH ($182,160)Secondary volume: 57 ETH ($94,392)Drop date: Feb. 17
After a successful genesis drop last year, singer-songwriter Violetta Zironi returned in February with a new collection, Another Life — an EP encompassing five tracks and 5,500 unique profile picture illustrations. Holders get access to virtual shows, live concerts and the ability to use the songs for their own projects. To celebrate the drop, Zironi hosted a 14-hour Twitter Spaces marathon with her community.
View the collection on OpenSea.
3/ Kids of the ApocalypseMonthly trading volume: 10748 SOL ($243,979)Primary sales (Feb): 6,666 SOL ($151,318)Secondary volume: 4082 SOL ($92,661)Drop date: Feb.. 9
Several years in the making, Kids of the Apocalypse (KOTA) is an ambitious, immersive music NFT project built on the Solana blockchain. It features graphic novel characters, dystopian storylines and a dark-pop soundtrack from veteran Swedish producer Stefan Storm, previously of pop duo Sound of Arrows. KOTA is now the biggest music NFT project on Solana, a blockchain that offers faster speeds and cheaper transaction fees than Ethereum.
View the collection on OpenSea.
4/ MyFi Studio – “Wind Tunnels” + “Circles Are Bad”Monthly trading volume: 94.48 ETH ($156,458)Primary sales (Feb): 70.33 ETH ($116,466)Secondary volume: 24.15 ETH ($39,992)Drop dates: January 2023 (“Wind Tunnels”) and February 2023 (“Circles Are Bad”)
“Wind Tunnels” and “Circles are Bad” are innovative NFT instruments that you can play and interact with in real-time. They are fully coded onto the Ethereum blockchain itself, which is a significant departure from most music NFTs, in which music is typically stored on an external server while the NFT simply contains a link to the music. “Wind Tunnels” and the follow-up drum machine project “Circles are Bad,” however, are fully coded onchain.
View the “Wind Tunnels” and “Circles Are Bad” collections on OpenSea.
5/ Shilly: The Access PassMonthly trading volume: 82 ETH ($135,792)Primary sales (Feb.): N/ASecondary volume: 82 ETH ($135,792)Drop date: Jan. 31
Shilly — a Bored Ape that makes chaotic pop-punk records — dropped a series of access passes in January, letting the community get involved in music releases. The most exclusive pass, the Band Pass, gives fans the opportunity to work on music with Shilly and even feature on tracks. The project was incubated by Universal Music’s NFT imprint Probably a Label.
View the collection on OpenSea.
6/ KINGSHIPMonthly trading volume: 76 ETH ($125,856)Primary sales (Feb): N/ASecondary volume: 76 ETH ($125,856)Drop date: July 11, 2022
The Bored Ape supergroup was part of a new pilot experiment with Spotify in February, through which KINGSHIP Key Card holders can now access an exclusive ‘token-gated’ playlist on the streaming platform. The news triggered a fresh wave of buying activity in the KINGSHIP collection, which captured 76 ETH in volume last month. Spotify has partnered with a total of four projects in the NFT space to test the new feature.
View the collection on OpenSea.
7/ Snoop Dogg – XYZMonthly trading volume: 45.2 ETH ($74,851)Primary sales (Feb): 44 ETH ($72,864)Secondary sales: 1.2 ETH ($1,987)Drop date: Feb. 3
Snoop Dogg returned to Web3 to capitalize on one of the biggest current trends in the space: open editions. Rather than a fixed supply of NFTs, with open editions — which are typically sold at a lower price to make them more accessible to collectors — fans can mint as many editions as they want within a set time frame. Web3 music pioneers RAC and 3LAU both dropped open editions this month, but Snoop Doog blew the doors off. The rapper sold more than 10,000 editions in a 3-day period via Sound.xyz. Snoop Dogg’s “XYZ” sold for 0.0042 ETH (about $7) each, totaling more than $70,000.
View the collection on OpenSea.
8/ Sammy Arriaga – “Metagirl (remix) featuring Nessy the Rilla”Monthly trading volume: 30 ETH ($49,680)Primary sales (Feb): 30 ETH ($49,680)Secondary volume: N/ADrop date: Feb. 25
Following in Snoop’s footsteps, independent country artist Sammy Arriaga also launched an open edition on Sound.xyz in February, aiming to beat Snoop Dogg’s 10,000 sales with a series of NFT incentives. The biggest collector will receive a special reward, while the rest will be entered into a lottery to win a valuable NFT. At the time of writing, Arriaga has generated 5,000 sales. One collector purchased more than 1,000 NFTs, briefly becoming Sound.xyz’s biggest all-time collector in terms of NFTs held.
View the collection on OpenSea.
9/ Tycho – “The Science of Patterns”Monthly trading volume: $19,000Primary sales: $19,000Secondary volume: N/ADrop date: Feb. 25
Electronic producer Tycho reissued his 20-year-old EP, The Science of Patterns, in February as a digital release for the first time. As a twist, the record is only available as an NFT through Tycho’s Web3 fan club portal. Powered by Web3 tech company Medallion, the multitrack album format is brand new to Web3, allowing fans to stream the entire album within the NFT itself, unlike previous album NFTs which simply unlocked access to music elsewhere.
10/ WVRPSoundMonthly trading volume: 11.09 ETH ($18,365)Primary sales (Feb): N/ASecondary volume: 11.09 ETH ($18,365)Drop date: January 17, 2022
WVRPSound is the biggest music NFT project ever in terms of trading volume. Since launching in January 2022, the collection of AI-generated music and animated characters have earned more than 6,000 ETH in volume (approximately $7.3 million). The project recently announced plans to launch playable versions of its characters in The Sandbox metaverse.
View the collection on OpenSea.
Methodology: The chart was compiled using data from primary music NFT sales across 19 different NFT platforms, independent releases and combined with secondary volume data from OpenSea. Data was captured between Feb. 1 – Feb. 28, 2023. Conversion rates from crypto to US dollars were calculated on Feb 28.
Spotify is experimenting with “token-enabled playlists,” meaning users in possession of non-fungible tokens (NFTs) can connect their wallets and listen to collections of music put together by the likes of Overlord (a company developing blockchain-based games) and KINGSHIP (Universal Music Group’s Bored Ape band). Android users in the United States, United Kingdom, Germany, Australia and New Zealand can now test the new feature.
“At Spotify, we routinely conduct a number of tests in an effort to improve our user experience,” a spokesperson for the streaming platform said in a statement. “Some of those end up paving the path for our broader user experience and others serve only as important learnings. We have no further news to share on future plans at this time.”
Spotify CEO Daniel Ek discussed blockchain technology — which enables the creation of unique digital files that are also uncopyable — on the Culture: Now Streaming podcast in 2019. “The most important thing is it will enable paying for things digitally in many of the places around the world where those kind of methods just doesn’t exist,” Ek said. “A service like Spotify, you can imagine what would happen by allowing users for instance to be able to pay artists directly. That can open up massive opportunities where all of a sudden, a user in Japan might pay a creator in Argentina. And that opens up huge opportunities for how we can further our mission.”
Last year, Spotify started allowing “a small group of artists [to] promote their existing third-party NFT offerings via their artist profiles,” according to a statement from the company. (At the time, Spotify reiterated that it “routinely conduct[s] a number of tests in an effort to improve artist and fan experiences” some of which “serve only as an important learning.”)
Steve Aoki and The Wombats were among those testing the feature, which was made available to Android users in the U.S.
JKBX, a start-up offering retail investors fractional shares in thousands of hit songs, said Friday (Dec. 16) it has hired executives from Spotify, NTWRK, Comcast and others as it builds out its executive team and aims for a mid-2023 launch.
Pronounced “jukebox,” the new investment platform founded and led by former Warner Music Group chief innovation officer Scott Cohen hired Whitney-Gayle Benta to be its chief music officer from Spotify, where she was global head of artist & talent relations, and Jason Brown as chief marketing officer from the livestream commerce platform NTWRK. Brown previously held top marketing roles at Foot Locker and PepsiCo.
JKBX is part Robinhood, the popular online brokerage, and part Spotify. Cohen says it will offer bite-sized investment stakes in hundreds of thousands of No. 1 songs by current artists and back catalogs belonging to rock legends for a price starting at around $10.
While several start-ups offering fractional share investing in music copyrights have launched in recent years, JKBX aims to differentiate itself with its scale, as well as by packaging the investments in SEC-registered entities and creating a platform welcoming of investors confused by blockchain and NFT jargon, says Cohen.
“This is about the interest in owning a real asset that is something you love, a piece of music,” he says. “This is a wide-open market now because retail investors have never had an opportunity to get involved. We’re creating a new asset class, building something at scale and … I think it’s going to explode.”
Cohen declined to name any of the artists or songs to which JKBX has acquired rights. But Benta, who was featured on Billboard’s R&B/Hip-Hop Power Players list this year, brings numerous artist relationships with her. In her previous role, Benta curated events including Spotify’s presence at the Cannes Lions Festival of Creativity, which featured Kendrick Lamar, Dua Lipa and Post Malone.
Building out the technology supporting the platform will be Matt Brown, JKBX’s new chief technology officer, who previously co-founded the web3 startup Arthur, and worked at the hedge fund Citadel and the Blockchain company Ripple; and Madhav Gopal, who worked in cybersecurity operations at Comcast Cable and now serves as JKBX’s chief information security officer. Jacqueline Ortiz Ramsay joins JKBX as its chief communications and public affairs officer, having previously helmed public policy communications at Robinhood.
JKBX is structuring its offerings by putting the rights it buys into special purpose vehicles — such as an LLC — and registering them with the U.S. Securities and Exchange Commission, a step that adds an extra layer of protection for rights holders, investors and the company.
Investors can then buy and trade stakes in those entities, with the share price being determined by the song’s valuation. The entities will gain value as they are streamed, synched and played, with that revenue being paid out intermittently to investors and other JKBX partners.
JKBX is still hammering out the technology and mechanisms that will be used for its public offerings, but the company is following all existing securities laws, Cohen says.
“We believe that everything should have this regulatory wrapper because this isn’t the first time for me,” says Cohen, who founded The Orchard with Richard Gottehrer in 1997, just a few years before the dotcom bubble burst in early 2000. “There were a lot of companies that IPO’d with these silly business models and they all disappeared. But what remained was people doing business by the fundamentals leveraging the technology of the day.”
“We will use blockchain technology, but as far as the consumer knows you want to buy royalty streams, click buy, enter how much and it goes into your account,” Cohen adds.
The company has not yet picked a date for its 2023 launch, but it is “fully capitalized,” says Cohen, who is bullish about the promise of the fractional shares market.
“This is the only area where I see explosive growth. I don’t see explosive growth from VR, AR, blockchain and NFTs, gaming,” Cohen says. “We’re not substituting anything the way albums replaced singles, or cassettes replaced albums. We’re not replacing anything. We are building an entire asset on top of it. We [fractional shares investing platforms] can add billions and billions of dollars to the ecosystem.”
Almost five years ago, I wrote a column about how Bitcoin and Blockchain might change the music business. At the time, the question seemed more about how than if: An online merchandise store had just started accepting cryptocurrency, several entrepreneurs had founded startups to use blockchain technology to pay rights holders, and entrepreneur and then-Dot Blockchain CEO Benji Rogers predicted that “Blockchain technology is coming like a tsunami.”
I was skeptical. I called Blockchain “a solution looking for a problem” and pointed out that the only person I knew who had bought anything with Bitcoin was a former neighbor in Berlin who had purchased LSD online. At that time, Bitcoin was worth $11,631 and the Dow Jones average was 25,803.
As Bitcoin shot up — to a November 2021 high of more than $56,000 — more artists and music executives became certain that cryptocurrency and Blockchain technology would change everything. Artists sold NFTs — as did Billboard — and in February Coachella sold $1.4 million of NFTs, including 10 lifetime passes to the annual festival.
Now the cryptocurrency exchange FTX is in bankruptcy, Bitcoin is down to $16,099, and the U.S. will almost certainly regulate cryptocurrency “banks” and exchanges. In economic terms, that means cryptocurrency companies might have to compete on an even playing field with traditional finance entities, which would reduce risk for consumers but eliminate some of the advantage that startups get from making their own rules. In non-economic terms, Mom and Dad are home, they’re pissed, and they’re not going to let you run your business unless you can wear your big-boy pants!
So, what about that tsunami? It has been a busy five years for the music industry: recorded music boomed, major financial players invested in publishing catalogs, two of the three major labels went public, Latin music gained a bigger global audience, and TikTok emerged as a transformative source of promotion. Blockchain and Bitcoin barely changed the industry at all, though. A few artists made an insane amount of money on NFTs and a bunch of companies announced plans to fundamentally disrupt disruption itself. But Bitcoin is still an inefficient means of exchange and a poor store of value — at best it’s a high-yield, high-risk investment — and Blockchain is still a solution in search of a problem.
A little more than a year after my column, Benji Rogers, he of the tsunami prediction, left Dot Blockchain, which in September 2019 rebranded as Verifi Media. The company still helps rights holders track ownership and use data, but it doesn’t emphasize Blockchain technology on its website. (Emails to the Verifi publicity contact came back as undeliverable.) That makes sense: The big problem with rights data has always been that it’s incorrect or incomplete. Blockchain is a distributed database that allows users to track changes, but it can’t fix incorrect or missing information.
Five years ago, the startup Choon had a plan to track music use with Blockchain and pay rights holders immediately with a digital currency called Notes. It went out of business in 2019, as Notes fell in value along with Bitcoin. The following year, Choon co-founder Bjorn Niclas launched Rocki amid the pandemic and exchanged outstanding Notes for Rocki tokens at a 50:1 ratio. (The company also lets independent musicians sell NFTs.) Since then, “Rocks” tokens have gone from being worth about 5 cents each, up to an April 2021 high of $5.45 — it peaked when Bitcoin did — and down to about a penny. That sounds exciting, and potentially profitable, but I suspect most artists prefer to get paid in currency that holds its value.
Bitcoin and NFTs aren’t going anywhere — some investors see the “crypto winter” as a buying opportunity, while others just want to HODL. (Art NFTs are performing better than most.) But the collapse of FTX will inspire investors, and hopefully government agencies, to ask more questions about whether celebrities who buy and sell NFTs are being transparent enough about their transactions — especially since the fans they influence may buy into investments in a way that help those who already own them.
Like many online technologies, Blockchain and Bitcoin offered a utopian dream of decentralization, free from government regulation and control. When it comes to finance, however, government regulation isn’t a bug, to use the technology phrase — it’s a feature. Just ask anyone who had money with FTX, which wasn’t insured by the Federal Deposit Insurance Corporation (FDIC) the way U.S. banks are. Among the assets stuck in the exchange are the Coachella Keys that offer holders access to the festival.
Coachella told Billboard that it’s confident it will handle this issue. But it’s hard not to wonder if there wasn’t an easier way to do this — say, passes with QR codes, or maybe even just spots in a database that could be sold with the cooperation of the event promoter. Blockchain is essentially a distributed database that can operate at internet scale, and it’s easy to see how exciting that is. It’s just still hard to see what use the music business might have for it.
One evening in July, panic spread in a small corner of the Web3 music space. Mysteriously, $6.1 million worth of cryptocurrency began moving out of blockchain music service Audius’ company treasury into an unknown wallet. Audius was being hacked.
The hacker discovered a bug that allowed them to take control of the Audius treasury — the crypto equivalent of a shared bank account — and transfer the entire funds to their own crypto address. The bug had lived in the code for two years.
This is shaping up to be the worst-ever year for crypto hacks, according to Chainalysis, with over 125 major hacks surpassing $3 billion in total, and on track to surpass the $3.2 billion in 2021.
Meanwhile, phishing scams continue to drain NFT wallets at an alarming rate. “Everything is unbelievably insecure,” says Sam Williams, founder of blockchain storage platform Arweave and a self-proclaimed “hacker,” though he uses the term as a broad description for coders. “We’re in the hackers’ Wild West of Web3 right now.”
Since the popularity of NFTs and cryptocurrencies like Bitcoin took off in early 2021, things have only gotten worse, creating a honeypot for hackers. “There was a lot of fluff brought in during the hype cycle last year,” Williams says, “and that typically lowers security standards for a period.” Teams scrambled to push products live to capitalize on the stream of new money paying too little attention to security.
For music companies or artists entering the space, the consequence of a hack could be enormous. Audius took a $6 million financial hit but it’s more than just money. Exploits can also damage the trust of music fans and undermine the entire promise of Web3. Warner Music Group considered this dilemma when launching its Stickmen Toys NFT collection earlier this year. “No matter how much time, how many resources, or how good of intentions go into a project, if there is a security breach, it can harm the project and its team’s reputation,” says Jillian Rothman, Warner’s vp of new business & ventures, business development.
The stakes of hacking are higher in Web3 than in today’s internet because customers are at direct risk of losing their money. If there’s a malicious link in a Discord server, dozens of community members could have their NFTs or cryptocurrency stolen from their wallet. If there’s a bug in the code, users could have their funds cryptographically locked with no recourse. The community backlash from these security incidents can be severe and costly that Web3 teams often resort to refunding users out of their own pocket. So, where are the biggest risks and what can music companies do to protect themselves and their artists?
Experts say the main vulnerabilities for the NFT space lie in smart contracts. These are programs written by developers on top of blockchains like Ethereum that hold funds and execute transactions — such as paying out royalties on secondary sales. “Smart contracts are just buggy and can be exploited,” says Nic Carter — partner at Castle Island Ventures, a VC firm with several Web3 music investments. “Things are so new in the crypto space that developers are still learning the best practices for safety.”
One NFT project, for example — Aku, by former MLB player Micah Johnson — got $34 million locked in a smart contract due a small bug in the code. The money was never recovered.
One way to immediately lower the risk is operating with transparency. “It should be damn open source,” says Williams, so that anyone can check and verify the code. “There’s no point trying to hide it. Better you find [bugs] early so you can fix them.” Blockchains like Ethereum are transparent by nature so hackers will find exploits if companies go live with buggy code. Better to test it in the open on so-called test-nets before deploying with real money and high stakes. While building publicly might take away an element of surprise in terms of marketing, it’s a small price to pay for added security. Additionally, smart contracts should be audited by external developers.
Next, there’s the risk of customers getting their wallets hacked. “[Crypto wallets are] probably the No. 1 risk,” for newcomers, says Carter. “A poor wallet setup or a failure of key management — that’s probably been responsible for the greatest loss of funds.” Companies can keep the community safe by highlighting the risks and educating music fans entering the space.
Carter recommends that anyone interacting with crypto use a hardware wallet — a USB device that disconnects from your computer and the internet. And they should limit the funds on a “hot wallet,” such as Metamask, which can be easily compromised through malicious links. “The NFT space is really aggressively targeted by phishing,” he cautions. “I think because it was mainstreamed so quickly… It meant a lot of people didn’t have as much experience in [wallet] management.” He also suggests using two-factor authentication on all crypto-related accounts and advises against clicking unknown links.
The team at Warner put this into practice using a “security” page on their projects’ Discord servers. Users have to read this page before entering. It explains the best practices and warns the community how to spot scams. “In a nascent space, bad actors prey on unsuspecting community members,” says Sebastian Simone, Warner’s vp of audience & strategy. “It will take longer for Web3 to go mainstream if people have negative experiences.”
Importantly, however, the failure of wallets and smart contracts does not imply a failure of the blockchain itself. “It’s extremely rare to have the blockchain itself be hacked,” says Carter. It is the code and applications on top of the blockchains that pose the biggest security threat.
Carter and Williams are both optimistic that these security issues will decline over the coming years through standardized contracts and simpler code, but the young industry is still learning the hard way. With every new exploit, developers are learning where the vulnerabilities are and adopting safer practices for the future.
As Carter puts it, “Safety rules are written in blood.”
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