tech

NFTs are back — but don’t worry about holding onto your wallet. At least in the music business, the NFT (non-fungible token) is quietly starting a second, more practical life far removed from the deafening hype that surrounded the digital assets just a few years ago.
At the beginning of the decade, some artists made millions selling NFTs while celebrities were helping legitimize them, with stars like Justin Bieber, Snoop Dogg, Madonna and Paris Hilton all buying NFTs from the then-hot Bored Ape Yacht Club collection. Then, predictably, the NFT bubble burst in fantastic fashion. In less than a year, Bieber’s Bored Ape, which he purchased for $1.3 million, was worth around $69,000.

NFTs were often a bad investment, but the underlying technology still has many believers. Last week, Sony quietly launched a music NFT collection on its Soneium blockchain platform. The fact that Sony — the larger company, not Sony Music Entertainment — is investing in Web3 technology may come as a surprise, but its efforts go back more than a year. Sony Network Communications, later renamed to Sony Block Solutions Lab, revealed in September 2023 that it had created a joint venture with Startale Labs to develop “a blockchain that can become the backbone of global web3 infrastructure” and create “killer web3 use cases to drive the adoption of web3.” Eleven months later, Sony announced the development of the Soneium blockchain that will form the infrastructure for those so-called “killer use cases,” with the goal of expanding Web3 technology and services to a broader audience and “build[ing] a world where web3 services permeate people’s daily lives.” The launch of Soneium was announced on Jan. 14.

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One of the applications on Soneium is a new fan marketing platform through which companies can issue NFTs. So far, two of Sony’s music divisions, Sony Music Entertainment France and Sony Music Publishing (Japan), issued NFTs as “demonstration experiment[s]” for its entertainment companies to “provide new value to creators and fans through web3 services.” In France, Sony celebrated the second anniversary of a Web3 community called Sunny B. 1991 by distributing limited-edition NFTs to the community. In Japan, Sony will distribute limited-edition NFTs to coincide with a live event for the girl group SANDAL TELEPHONE.

Sony’s blockchain push comes at a time when music companies are increasingly targeting superfans through digital platforms and merchandise offers. “NFTs are uniquely suited for this because they are programmable digital assets that can evolve over time,” says Cherie Hu of Water & Music, a music industry research and consulting practice. NFTs and their “smart contracts” — self-executing code on the blockchain — allow artists to create membership experiences that can evolve over time. And because NFTs use decentralized technology, they aren’t reliant on any one platform or company — a notable advantage when a country can outright ban a social media platform. “This is quite different from traditional fan clubs, where fan data is otherwise fragmented and hard to act upon from the artist’s perspective,” says Hu.

Sony’s slow launch of its blockchain ambitions will ultimately be helpful to other companies in the music space, says David Greenstein, CEO of two blockchain-related startups, Sound and Vault. “Any legacy company that’s trying to innovate, I have a lot of respect for because I think the industry needs more innovation,” he says. Three years ago, releasing high-priced yet useless NFTs was seen as innovative. In 2025, innovation means using blockchain technology, cryptocurrency and NFTs to create consumer-friendly products that bring artists and fans together.

A fresh approach to NFTs makes sense now that the market is tanking. NFT trading volume fell 19% in 2024, according to DappRadar, making it the worst year for NFTs since 2020 and far below their height in 2022, when they boasted $57.2 billion in trading volume. Last year’s leading NFT collection was Pudgy Penguins, which goes far beyond Web3 by selling plushy toys in brick-and-mortar retailers and sponsoring the uniforms of Spanish soccer club CD Castellón. Bored Ape Yacht Club NFTs still generate a relatively large amount of sales activity, but prices in the last 30 days were down about 91% from their highs in 2022.

As enthusiasm for NFTs waned, some worthwhile experiments went belly up. Universal Music Group’s foray into NFTs was Kingship, a virtual band comprised of three Bored Ape characters and a rare Mutant Ape. The 5,000 NFTs, which would unlock music and other perks for owners, quickly sold out in July 2022. The group landed a sponsorship with M&Ms in 2022 and a Kingship game launched on Roblox in 2023. But by all appearances the project is now dead, and Kingship NFTs that sold for 0.23 ETH three years ago (approximately $300 at the time) are trading for less than 0.002 ETH ($5) today.

“There’s going to be very fruitful, better things that come out of [blockchain technology] that are non-speculative, just because the technology is awesome,” says Greenstein. His latest company, Vault, allows artists to build relationships with fans and creates a blockchain-based digital wallet for each user. But Vault has made a conscious choice to put the technology in the background, and although “everything is Web3 enabled,” he says, it’s not germane to the fans’ relationship with artists. “Nobody asked what the tech stack of Spotify is,” he points out. “They just use the product.”

Sing, a Seattle-based startup that sells both digital collectibles and physical merchandise, also puts Web3 technology in the background. “We don’t talk about NFTs,” says CEO Geoff Osler. “We don’t lead with that, because I don’t think people care.” But Sing has the same end goal as early NFT proselytizers: to facilitate a relationship between artists and their biggest fans while allowing artists to realize more value from those relationships. “We think that artists should make a great deal more money than they already do on the releases,” says Osler. “And that there’s this overall feeling — at least among superfans — that there’s a gap in the market. People want to own their music and own that connection with the artists.”

Speculation isn’t gone, but it’s migrated. Blockchains like Solana that have lower transaction costs and higher speeds than Etherium have become “hotbeds” for the trading of memecoins, says Hu. Rather than pump money into NFTs, people are buying into the TrumpCoin and the Hawk Tuah coin. “In certain segments of pop culture and politics, I’d say the appetite for high-risk digital assets remains really strong,” she says.

But players in the music space seem content to focus on practical use cases and leave the speculation to memecoin hustlers. “Once we come out of this period, and people start to accept blockchain tokens, there’s some very, very interesting stuff that the technology will enable,” says Osler. “But for now, meet them where they are. Let’s sell them records from artists they love. Show them there’s this amazing digital stuff that goes along with it, and that it’s collectible, and just leave it at that.”