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Even though NFTs (non-fungible tokens) are experiencing a lull in 2023 following a boom the two previous years, the companies behind NFT technology are pressing forward to prove the initial buzz wasn’t a fluke.
One of those companies, OneOf, got a boost in February when Stephen Cooper, Warner Music Group’s CEO from 2011 to the end of 2022, joined the Miami-based company’s board of directors. A little over a year after Warner Music announced a partnership with OneOf to create exclusive NFTs for its recording artists, Cooper has high praise for the company. “I think that it’s the right organization with the right vision and the right tech at the right time,” he says.
NFTs are part of a technological shift away from websites with user-generated content (Web2) to decentralized (Web3) applications that utilize blockchain technology. They landed on many people’s radars in April 2021 when NBA Top Shot sold a video of a dunk by basketball superstar LeBron James — a one-of-a-kind digital collectible on the blockchain — for a startling $387,600. Dapper Labs, which provides Top Shop’s blockchain technology, is one of many Web3 startups to receive financial backing from Warner Music Group during Cooper’s tenure as CEO. Indeed, Warner has given its stamp of approval to a bevy of forward-thinking platforms and technologies in recent years. It invested in such companies as Roblox two months before it went public in March 2021, as well as DRESSX, a digital fashion retailer, and generative music startups Authentic Artists and Lifescore.
Being the “next big thing” has come with disappointments, though. NFT sales fell from more than $6.3 billion in January 2022 to about $1 billion in February 2023, according to NFT aggregator CryptoSlam, and cryptocurrency enthusiasts have suffered through the collapses of trading platform FTX and stablecoin Terra, among other high-profile failures. Along the way, NFTs earned a reputation for being expensive digital artwork with little purpose other than to — hopefully — appreciate.
Today, Web3 and NFTs are behind everything from fractionalized ownership of music royalties to proof of attendance at concerts or virtual events. For OneOf CEO Lin Dai, Web3 has the potential to transform the way artists build communities. “I liken it to if this was 1997 and I went to either a music artist or music label or just a brand to say, ‘Hey, you have your fan club or your consumer following, and you have millions of mailing addresses that you communicate with them,’” says Dai. “‘There’s this thing called email that’s coming that’s going to make that relationship much easier and we have software to do that.’ This is kind of the stage where I’m at.”
Stephen, what attracted you to the board of OneOf?
Cooper: Well, I’ve known Lin for a number of years. Warner has invested in him. And I’ve not only liked the way that the company has been able to pivot over time as the tech space morphed, but more importantly, I think that what they’ve done and what they’re going to continue to do — by building out this blockchain technology and being able to utilize that technology in conjunction with the superfast capabilities to mint NFTs — it’ll create an amazing opportunity for utilization not only in music but across a spectrum of any number of consumer brands that are interested in building communities of their fans or followers or admirers, and utilize that capability to turbocharge the success in their businesses.
Lin, what do you think Stephen’s going to bring to the company?
Dai: I’ve always admired the amazing work Stephen has done at Warner Music. If you think about 11 years ago or 12 years ago, when he took on the job, the music industry was very much in disarray and disrupted by potentially the idea of digital transformation. It was able to turn that into a position of strength, to doubling down on digital transformation, like the Spotify deal and the partnership with YouTube. Warner, even as the smallest of the three major labels, has really done a tremendous job in taking market share. And Steve’s broader experience in his life before Warner — Steve was CEO of MGM and Krispy Kreme Doughnuts. It just spans a lot of different industries. Over the years, I always feel like every time I talked to him, we learned a lot as a young startup with hot technology. A lot of the bigger picture of how industry moves, and how our technology can apply to industry, Steve brings a wealth of knowledge [to].
Not all artists jumped on digital downloads right away. There were some notable holdouts once iTunes was out. What are your conversations with artists and their teams like? Tell me about their understanding of Web3 and where they sit? What is that education process like?
Cooper: Well, I think that it really goes across an entire spectrum, where there are people that go anywhere from not interested all the way to people that embrace it or immerse themselves more fully into it. I think that what will happen is that, like with any new technology, there’s a period of skepticism, then there’s the period of testing, then there’s the period of early adoption. And once the early adopters begin to proselytize the technology, you can see generally that it begins to accelerate at a fairly rapid pace.
The good news, I think, for Web3, is that for many artists — and again, it’s much broader than music — but for the Gen Zs, the millennials that have grown up in a digital age as opposed to people like me, that acceptance and that adoption has accelerated. There used to be a much greater mean time between the introduction and the broad acceptance of technology. Those mean times have collapsed over the last two or three decades, where new technologies are embraced much more rapidly. There are millions of people that have, primarily through gaming, immersed themselves in these new technologies and these metaverses for some length of time now. With these better foundational technologies and the ability to keep track of who’s got what at all times it’s something that people…are far better off embracing than rejecting.
And the music industry, in large part, has had a history — as far as I can tell being mostly an outsider looking in — that if they had looked at Napster in a different way, they would have controlled file sharing. If they had listened to [former Apple CEO Steve] Jobs differently, they would have controlled downloads. And if they had acquired Spotify in the early days, the industry would have controlled streaming as opposed to allowing these technical iron curtains to get between content and fandom. And I think what people will begin to realize in Web3 is that it creates another shot for the industry to converge content with distribution, where the artists and the fan are right up against each other as opposed to being separated by this tech iron curtain.
Lin, where are we on the Web3 hype cycle? You’re familiar with this curve? There’s an initial peak of buzziness followed by a trough of disillusionment. Have we fallen down into that trough right now? And what does that mean for OneOf?
Dai: I hope we have completely fallen down and rode around for a few cycles and are ready to climb out now. You know, I think in the last 18 months, the general excitement really is great for mainstream awareness of Web3 and NFT technology, but we only really used it for two use cases. One is high-end digital art. The other is how to use this technology for a profile picture on my Twitter account. If you’re talking about the internet in, like, 1997, there’s going to be 990 other use cases we haven’t even started fathoming.
We work closely with Pepsi and Anheuser Busch, and American Express is a major investor in our last round. In music, we are working on tool sets for artists and creators, but also on things that directly impact the kind of three pillars of the music business today, like how does Web3 technology enhance the experience of streaming? How does Web3 technology do a better job at ticketing? How can Web3 technology be applied in the realm of publishing and rights? So those are much deeper and more long-term kinds of use cases. The most recent hype cycle was about speculators getting involved. That’s not really a sustainable model for any industry.
You mentioned American Express. When Amex Ventures invested in OneOf, the managing director referred to brands’ involvement in NFTs as “experimenting.” So, what have brands learned from the experiments so far?
Dai: The ask is no longer, “How do we do a profile picture collection?” It’s, “How do we build entire systems that connect our data that we know about consumers to allow them to really have a full ecosystem, whether it’s rewards, whether it’s commerce, whether it’s better communication?” So, there is kind of a quiet race for Web3 by all the major Web2 companies right now — or even Web1 companies. I think it’s unlike the dot-com bust where I think most companies wrote off the internet and everybody went back to brick-and-mortar for 10 years. And that’s how you allowed Amazon to have such dominance. There were only a few companies that really stayed the course.
Now, I think every major company, whether you’re CPG [consumer packaged goods] or you are music streaming — Spotify just rolled out some new software — everybody kind of knows and believes Web3 is going to happen. They know today’s tools suck. Today’s tools are not good for beer drinkers or fans that just want to go to a festival [to] enjoy and don’t want to connect a crypto wallet. That’s why they are actively looking for solutions.
Stephen, from a label’s point of view, how is Web3 different and how do you tackle it? Is it like traditional digital marketing or promotion? There is an element of community to it. That is a different relationship than labels have typically had, maybe outside of fan clubs. What challenges does that bring to a label?
Cooper: I think it does several things. One, it does bring challenges because I think that Web3 will heighten the requirements for many artists to introduce music on a far more regular basis. There’s some artists that will adapt and adopt. There will be some artists that won’t — but the labels will also begin to attract a new generation of artists that have been immersed in the digital world since birth, have been immersed in social platforms, and will flow naturally into Web3.
The advantage that I see for labels is that even though they will be, you know, paying a tolling fee to be on these platforms — whether it’s Roblox, Sandbox, Fortnite, whatever, inside of those worlds — they will be able to create their own worlds, to draw music fans, fans of specific artists, into those worlds where they will be able not only to interact with the artists on a regular basis, but they will be able to interact with each other on an ongoing basis. So, the relationship with the artist, one, should deepen considerably. Two, the relationships between super fan to super fan ought to accelerate. The glue that holds fans’ loyalty to those artists ought to strengthen through the ramp-up of interaction, both horizontally and vertically. I think that the labels understand this.
It’s been very public at Warner that they’ve invested heavily in Web3. They are building out spaces in Web3. They are experimenting with their artists in Web3. And I think that as they refine those experiments, as they refine their approaches, they will find that this gives them a freshened opportunity to really bring content and distribution together and take advantage of a situation that they missed in the late ‘90s, the early 2000s, and in 2010.
Some people think Web3 is an opportunity for artists to gain more independence. In some Warner earnings calls, you’ve talked about the artists’ need for labels in the Web3 environment. Are both of those true?
Cooper: I think that people will take a shot at Independence. Here’s what I see as the math problem: If you talk to YouTube, or you talk to TikTok, they will say that there 20, 25, 30, 35 million musical artists that use TikTok use YouTube [and] so on and so forth. So, you start with that number. What Web2 and Web3 have done — or will do — is democratized access. But what they can’t democratize is talent.
When you look today at the active rosters of Universal, Sony and Warner, there are probably less than 15,000 artists. Those artists — in conjunction with the catalogs [owned by] the three, plus BMG and a few others — represent 85% of all the listening on the planet. And if you think about 20 or 25 years of American Idol, of The Voice, of America’s Got Talent, after 25 or 30 years, you can name on one hand the people that have made it. When you look at TikTok, there’s only one or two or three [star] artists that have emerged over the last few years. And YouTube has been the same. Those that have emerged have ended up having the global machine of a label behind them. Because it is so hard even with extraordinary talent to be recognized and to do it on your own is almost impossible. The fact of the matter is to be able to be recognized as that talent and then have the right machine behind you with the right global footprint is just not something most young artists are capable of doing on their own.
Lin, Stephen said Web2 is not going away. This week, we saw news that Spotify is testing NFT-accessed playlists. Do you see Web2 and Web3 integrating in ways like that?
Dai: Yeah, absolutely. We did the first-ever beta with Spotify integration last year with some of our artists, that was early Web3. So Web2 companies certainly are very much embracing Web3. Web3 is not really replacing traditional businesses. But what Web3 does really well is this idea of creating community. If you think about traditional fan clubs, you used to write a letter and put $2 in there and somebody mails you back a sticker, right? That’s replaced by a kind of an email fan club. And everyone says, “Okay, here’s a link, you get to go buy our concert ticket earlier,” but it’s still kind of a one-to-many relationship. The value exchange is still a one-way street. The artist is asking the fan to please spend money for [their] product or experiences.
Web3 is interesting because it really encourages members to work with each other. Because you’re basically receiving a digital asset. That price can fluctuate based on how engaged the membership is. You’re incentivized to go out there and evangelize for your artist and really make sure you’re potentially participating in the success of the artists, whatever that may be. Now for the artists, the algorithms of Spotify really created this kind of this all-or-nothing world. You’re either one of the 500 artists that is making a killing because the algorithm just keeps feeding that or you just you don’t break through. So Web3 changes that. I can make a living only having 500 super fans. I don’t need to be the next Taylor Swift.
I grew up in China. I played the accordion. I was a very good accordion player when I was in elementary school. So, if I’m just passionate and want to play accordion, maybe I can rally up like 100, 200, 500 super fans, but it’s very, very hard for me to be on a Taylor Swift level. The reality is as a passionate musician if you just can’t make a living doing what you do now — streaming — you can’t support yourself. You have to take on a different soul-crushing job that you’re not passionate about. And at some point, life comes at you, and you have to give up your art.
But Web3 potentially enables a whole slew of creators to be able to do their art for a living, if they can use the tools to really gather and rally around just a few hundred super fans. And I think in the long run, that’s a better world, if we just have more art being created and people being happy doing what they do.
Cooper: I think Lin’s point is well taken. And I think that what will separate, whether it be at a small scale or a large scale, whether or not there’s really talent there versus just noise. And you may recall that a year or two or three ago when Spotify began to mess with their playlists and push things that they wanted to push, versus what music fans wanted to hear, they got a lot of backlash because they were pushing stuff that people just didn’t want to listen to. And people generally can differentiate what they believe is really good stuff from really bad stuff.
[Spotify CEO Daniel] Ek said, I don’t know 5, 6, 7, 8 years ago, he said you wanted a million artists to be able to make a living on Spotify. And he kind of defined that as being able to make $100,000 a year at the time. Well, it was pretty easy to do the math and figure out what that would mean by way of Spotify’s size and subscriptions and streams. Three or four months later, they quietly abandon that idea because they really don’t know how to market and promote. They know algorithms. But when you’re promoting music, an algorithm is a poor substitute for marketing and promotion to build traction. So, I think that when he abandoned that idea, it was kind of an acknowledgment that while algorithms could feed things up to people, the handoff to Web3, is that that artist may be able — to Lin’s point — [to] rally 100, 200, 300 people to make a living.
Even on TikTok, which is kind of a democratic community, even though it is Web2, all the money is being made by 1/10 of 1% at the top of the pyramid, and everybody else is just having fun. And then they end up with 1,000 or 2,000 followers, but without that talent, it’s hard to be in these environments and make a living. Web3 will actually enhance that possibility. And God bless the accordion players.
It’s been more than two years since news of multi-million dollar NFT (non-fungible token) sales first hit the music headlines. In 2021, Grimes made $6 million overnight with a collection of audiovisual NFTs, 3LAU raised $11.6 million in a record-breaking auction and Steve Aoki claimed to have made more money from NFTs than 10 years of record label advances.
For a moment, it looked like NFTs were a new way to value music, unlocking seemingly enormous sums of money for artists. Now, in the cold light of a crypto bear market where NFT trading has fallen 85% from previous highs, those sales figures were unsustainable in hindsight. Instead, rather than trying to sell NFTs at extortionate prices, artists are experimenting with a starkly different tactic to engage their fan bases: giving them away for free.
At the grassroots level, independent artists are giving out free NFTs to capture their earliest fans and kickstart a community. At the superstar level, artists like The Chainsmokers are using free NFTs to reward their fanbases. Far beyond speculation, platforms in the space have pivoted to focus on non-financial use cases such as integrating free NFTs into Spotify pre-save campaigns, incentivizing email capture, Web3 fan clubs, token-gated exclusive content, community building, rewards and commemorative tokens.
Chainsmokers Alex Pall and Drew Taggart were among the first to tap into the new trend. The duo watched the NFT explosion play out while recording their fourth album, So Far So Good, but instead of following the million-dollar playbook, they gave away 5,000 NFTs tied to their album for free. The NFTs also grant fans a 0.0002% share of streaming royalties in the album. The duo doesn’t even take a cut of the NFT’s secondary sales, which go straight to the album’s songwriters.
“Alex and Drew literally made no money from these NFTs,” says Adam Alpert, the duo’s manager. “In fact they lose money because they’re giving a royalty away.”
So why didn’t the Chainsmokers follow the NFT hype and cash in? “That didn’t really appeal to us,” says Alpert. “We didn’t believe it was the right use of the tech at this time.” Rather than financial speculation, the Chainsmokers saw NFTs as a way to deepen their relationship with fans. “Having a happy superfan as a result of this is worth more money than selling an NFT.”
The Chainsmokers have built their entire NFT campaign around free giveaways and exclusive fan experiences. NFT holders get access to a “gated” Discord server where Pall and Taggart interact with fans directly, answer questions and play music. Instead of paid meet and greets, the duo invites token holders to meet backstage at shows. “It really felt like [the fans] were a part of something that no one else was,” says Alpert. “That’s the power of NFTs.”
What started out as free NFTs now change hands for an average of $55 each. The tokens have naturally increased in value as the duo has added new perks for their fans, such as a recent free “airdrop” of the lo-fi version of the album. Perhaps Web3’s killer use case, then, is not the hyper-financialization of music, but a “sincere, modern version of the fan club,” as Alpert puts it.
NFT platforms are also pivoting to explore these free use cases. Decent.xyz started out as a Web3 music platform to sell NFTs backed by streaming royalties but now offers a range of non-financial Web3 tools for artists. “Our team has always been in pursuit of less speculative use cases,” says Charlie Durbin, founder of Decent.xyz. “They force people to consider what NFTs are good for beyond patronage and trading.”
Durbin sees free NFTs as a new layer in the artist’s funnel allowing them to convert fans on social media into stickier “collectors.” Emails and phone numbers are difficult to collect, he says, but “free NFTs promise to tilt those odds.”
Another platform called Showtime.xyz allows artists to give fans a free NFT in exchange for pre-saving their track on Spotify. Meanwhile, POAP is an app through which artists can give fans a free NFT as a reward for showing up to digital and IRL events.
Last year, independent pop artist Annika Rose gave out almost 500 POAPs to her fans every time she interacted with them, acting as proof that they supported her at the start of her career. “She needed to grow [her community] one member at a time,” says Hannah Hyman, Web3 project manager at NVAK Collective, the Web3 record label that represents Rose. “By offering a free POAP to people Annika engaged with, she could timestamp when she connected with them, introduce them to her artistry, and begin to develop a relationship with them without having to sell anything.”
When Rose later released a paid NFT, she put all POAP holders on a “presale” list at a discounted price. It sold out immediately, ensuring the NFT went straight to her earliest fans and supporters rather than speculative traders.
Avoiding speculators was also key for The Chainsmokers. “We tried to minimize it the best that we can,” says Alpert. Eighty percent of the tokens were available only to the Chainsmokers VIP list for the first two hours, ensuring that existing fans had priority access.
Of course, none of this means speculation and financialization of NFTs will disappear. “I’m not naysaying it as a revenue stream,” Alpert clarifies. “I think it can be really helpful for developing artists, especially those with a small but loyal fanbase. But I think for big artists, a much more powerful and pragmatic use is creating a community.”
The future of Web3 is likely somewhere in the middle: A healthy combination of non-speculative NFTs to build community combined with financial NFTs to unlock new revenue streams. In hindsight, many are realizing that turning the music industry into a casino was perhaps a misjudgment, but sustainable use cases for blockchain and NFTs could still add value to an artist’s relationship with their fans.
Ad.Ventures, the collective of over 120 independent venues and festivals across the U.S., has announced a new program with Web3 credentialing platform Dentity, bringing the company’s identity verification tech to the events industry. Throughout the week, Ad.ventures and Dentity will unveil new features of the platform at SXSW and showcase new opportunities for fans, venues and artists.
Ad.Ventures was formed by organizers of the National Independent Venue Association (NIVA), who launched the “Save our Stages” advocacy movement in 2020 in response to the pandemic shutdown, successfully securing a $16.2 billion relief program to benefit independent venues, artists and professionals. In an announcement, it said it “remains dedicated to preserving the ecosystem of independent venues, promoters, and festivals throughout the United States. This includes providing them access to the best partners and providers so they can continue scaling, enhancing, and improving their operations and offerings.”
Dentity enables consumers to securely store the most sensitive elements of their identities and public personas — from government IDs and memberships to digital event credentials — securely in one Web3 digital wallet.
“Our growing network of independent venues handles a volume of more than $100 million in ticket sales each year and services more than 10 million customers across thousands of events,” said Ian Fine, vp of partnerships for Ad.Ventures. “Dentity’s Web3 credentialing platform provides venue operators with new technology to improve how they produce their events, whether through the lens of consumer data privacy or by implementing sophisticated, sponsored digital loyalty passes, VIP experiences on-site, exclusive offerings, and content. Our goal is to redefine what a ticket provides before, during, and after an event.”
Jeffrey Schwartz, founder and chief executive of Dentity says the company’s unveiling at SXSW is the “first of many we plan to make which impact the event experience and redefine access management. Thousands of ticket holders have already downloaded their Web3 credentials alongside their Apple and Google wallet passes and are experiencing the benefits of Dentity’s platform in Austin today.”
Ad.Ventures is hosting the 11th Annual Music Tech Mashup showcase powered by Dentity today (March 13) at the Empire Control Room & Garage in Austin, as well as an official SXSW panel called “The Power of Connection With Emerging Technologies.” Dentity collaborated with Ad.Ventures to power a number of other SXSW events as well, including BrooklynVegan: Lost Weekend, FloodFest, Brooklyn Bowl Family Reunion and Stereogum, among others.
To enhance the fan experience during and after SXSW, credential holders will be provided with unique offerings on-site and will get access to exclusive discounts and experiences at locally owned and culturally diverse businesses throughout Austin.
Snoop Dogg teamed up with U.K. tech entrepreneur Sam Jones on Shiller, a live broadcast platform set to launch in April that will offer content creators a suite of tools to monetize their content, including the ability to token-gate their video and audio, share products from commerce sites and promote NFTs. According to a press release, the app “combines best of web3 technology with live, interactive video and audio streaming, to provide a one-stop-shop for creators, including NFT projects, artists, brands, and key opinion leaders, to monetize their following and connect with their audiences.”
B2B streaming technology company Tuned Global acquired Swedish music technology company Pacemaker, which holds several patents for its AI-driven DJ applications. “Thanks to Pacemaker, Tuned Global extends its B2B streaming technology dominance by now offering enhanced AI tools that will hook and excite users as part of our white-label music apps, as well as in a standalone product for companies who aren’t yet our customers,” said Tuned Global MD/founder Con Raso in a statement. Pacemaker’s AI DJ is capable of weaving together tracks and other audio, while a “match machine “can help curators instantly dig up great tracks in a massive catalog and keep the groove going for workouts, therapeutic sessions, or other playlist-driven moments,” according to a press release.
DJ/producer Steve Aoki launched Audio Media Grading in partnership with Collector Archive Services. The new company will provide grading, preservation and authentication services for grading vinyl records, cassettes, CDs and 8-track.
Cutting Edge Media Music (CEMM), a division of Cutting Edge Group, formed a strategic venture with Village Roadshow Entertainment Group that will encompass all of Village Roadshow’s past and future music publishing assets, soundtrack album releases and music supervision services for film and TV. The venture will be overseen by Brian McNelis, who heads CEMM division Lakeshore Records, along with Lakeshore’s Eric Craig, who will provide music supervision and music department support across the Village Roadshow slate. Village Roadshow COO Louis Santor will take the lead in implementing all aspects of the deal.
B2B distributor FUGA expanded its global user-generated content and rights management offering by completely integrating rights management company Adrev. Both are owned by Downtown Music. The integration formalizes months of collaboration between FUGA and Adrev, according to a press release, which states that with the integration, “both FUGA and Adrev clients will now be provided with an extended service aimed at amplifying and simplifying UGC and premium video content monetization into one, seamless environment.”
BMG partnered with Stockholm-based artist management company Scandinavian Talent Management (STM), which also specializes in music supervision, music publishing and live events. “We are delighted with BMG’s trust and are confident that we can create many synergies with their global resources and networks,” said STM founder/MD Henrik Johansson in a statement. STM clients include Swedish rock-pop singer-songwriter and BMG artist Kristofer Greczula; British guitarist, songwriter and producer Chad Neale; and Mando Diao bassist Carl-Johan “CeeJay” Fogelklou.
Chordal partnered with AI developer AudioShake to launch Auto-Instrumental, described as an “on-demand instrumental solution” for music supervisors that’s designed to streamline synch placement. “Auto-Instrumental reduces the time of obtaining an instrumental from days or weeks (if it even exists!) to a matter of seconds, making it immediately possible to trial music to picture,” said Chordal co-founder Grayson Sanders in a statement.
Film and TV company Gunpowder & Sky signed a multi-year, multi-project development and production deal with Audible. Under the deal, Gunpowder & Sky will provide Audible with an exclusive first look at the studio’s slate of audio initiatives covering music, pop culture and more. In February, Audible released In the Cut with Ghetto Gastro, an eight-episode Audible Original podcast executive produced by Gunpowder & Sky. Two upcoming music-oriented podcasts from the companies — Lighters in the Sky and Shelved — “will reveal iconic, often undercover, music stories to the masses,” according to a press release. The first-look deal builds on an existing collaboration that has spawned multiple installments in Audible’s Words + Music franchise.
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.
Napster announced that it acquired Mint Songs, a music NFT marketplace that aims to help artists establish a thriving Web3 presence, on Wednesday (Feb. 15). The acquisition brings together a streaming service with a platform focused on creating digital collectibles.
Jon Vlassopulos, CEO of Napster, said in a statement that Mint Songs “have done groundbreaking work helping thousands of artists get their start in Web3, reach their fans in new creative ways through collectibles, and unlock significant new revenue streams.”
“We feel that the natural next step for the Napster service is to include collectibles that fans can get as rewards for engaging with artists they love or that they can purchase to collect and share,” he added to Forbes. “We already have hundreds of thousands of artist storefronts where our fans go to listen to music every day so adding collectibles is very contextual in the fan experience.”
Garrett Hughes, co-founder and CTO of Mint Songs, said in a statement that Napster has “the vision to finally take Web3 music to the mainstream.” “Our goal all along has been to create deep, engaging, and innovative ways for artists to connect with fans that also offer them an opportunity to monetize that fandom,” he continued. “Conversely, we see a demand from fans for a music service to offer more than just on-demand music and podcasts, which makes Napster’s ambitious goals all the more attractive.”
Mint Songs’ Nathan Pham will join Napster to lead Web3 product initiatives, while Hughes will serve as an advisor to the company and “work closely with Vlassopulos to integrate Mint Songs’ technology into the Napster platform,” according to the acquisition announcement.
Last year, Napster was acquired by a pair of companies with Web3 experience: Hivemind and Algorand. Vlassopulos, who had spent close to three years at Roblox, took over as Napster CEO in September. “We want to bring the community together and enable the artists, with the data we have, to activate their communities around things like access to physical events and digital experiences,” he said at the time. Napster then launched Napster Ventures for the purpose of acquiring Web3 music startups.
Matt Zhang, founder and managing partner of Hivemind, applauded the Mint Songs acquisition on Wednesday. “We are excited for Napster to be a central player in the music Web3 ecosystem and acquiring Mint Songs is a great foundational step,” he said in a statement. “The combination of Napster’s continued innovation that powers the platform currently along with Mint Songs’ technology IP and expertise, will help drive Web3 innovation for the music industry.”
Former Warner Music Group (WMG) CEO Stephen Cooper has joined the board of directors for Web3 company OneOf, it was announced Wednesday (Feb. 15).
“I am excited about how technology can reshape the future of music, entertainment and business models for many industries,” said Cooper in a statement. “OneOf has a stellar team and deep expertise in providing next generation Web3 technology to enterprises and brands. I look forward to serving on OneOf’s Board of Directors to help guide and accelerate their growth.”
During Cooper’s time as WMG CEO, the company became the most aggressive of the three major labels in embracing Web3 and the metaverse. Under the guidance of chief digital officer/executive vp of business development Oana Ruxandra — who Cooper first brought to WMG in 2012 and who returned in 2018 following a two-year stint at UMG — the company forged partnerships with and/or invested in NFT platforms like Blockparty and The Sandbox, avatar tech company Genies, immersive tech company Wave, blockchain startup Dapper Labs and OneOf, which signed a deal with WMG in January 2022 to create exclusive NFTs for the company’s artists.
In addition to its B2B pursuits, OneOf has a consumer-facing Web3 marketplace, OneOf.com, which is home to digital collectibles for artists including Doja Cat, The Notorious B.I.G. and Whitney Houston.
Cooper’s tenure as WMG CEO lasted from August 2011 to January 2023, when he was succeeded by former YouTube chief business officer Robert Kyncl. Prior to WMG, Cooper served as CEO of Metro-Goldwyn-Mayer (MGM), CEO of Hawaiian Telecom, executive chairman of Blue Bird Corporation, executive chairman of Collins & Aikman Corporation, CEO of Krispy Kreme Doughnuts and CEO/chief restructuring officer at Enron Corporation.
“We are thrilled to welcome Steve to join our board and leadership team,” said OneOf founder/CEO Lin Dai. “Web3 will revolutionize how brands connect with the consumers of the future. Steve’s expertise across music, entertainment, and consumer brands is the perfect addition to OneOf’s leadership team. With his guidance, we look forward to advancing our mission to lower the barriers to entry into Web3 for enterprises and consumers alike.”
Universal Music Group’s Def Jam Recordings is the latest major label imprint to venture into Web3 through the launch of a virtual band, The Whales. Comprised of cartoon NFT whale characters, the group’s debut full-length album has an all-star cast of producers and songwriters attached.
The deal is a partnership with The Catalina Whale Mixer, a collection of 5,555 NFT avatars on the Solana blockchain. Created by tech studio WAGMI Beach in December 2021, the concept of The Whales was born when co-founders Ben Willis and Joshua Andriano met with Def Jam’s DJ Mormile and Ryan Rodriguez. “We pitched the idea of a community-grown avatar group to DJ and [they] just got it,” says Willis. “To be working with Def Jam on releasing this one-of-a-kind new music project is a dream come true.”
Def Jam has not yet confirmed the musicians behind the project but says it will involve a “who’s who” of musical talent. The Whales’ first project will be released as a full-length album, while the group will tap into the broader Catalina Whales Mixer community to deepen the relationship between music and Web3 culture.
The virtual artist NFT playbook is becoming a trend among bigger record labels. The same concept was executed by 10:22PM — another Universal Music Group imprint — which licensed characters from the Bored Ape Yacht Club to create the animated band KINGSHIP. Warner Records’ Web3 subsidiary Probably a Label is also developing a virtual artist in collaboration with its 5,555 NFT holders through a voting system.
The team at WAGMI Beach — whose founders are music industry veterans themselves, previously at management company Indie Pop — believes this model will improve the way artists and labels engage directly with fans by letting them be part of the process. “At the core of all the NFT and Web3 attention is a fundamental technology change that will alter how music and art is consumed by generations to come,” said co-founder Alec Lykken. “This is our initial dive into what we believe to be an incredible new wave for artists and fans alike.”
Patrick Moxey is bringing the entire roster of Helix Records, the EDM label he launched last year after selling his stake in Ultra Records, into the world of Web3 — starting with an NFT membership pass.
Starting in February, the Helix Records Genesis Pass will act as a digital passport to the Helix ecosystem and grant holders a free music NFT from one of the roster’s flagship artists, which includes electronic duo Snakehips and house DJ Marshall Jefferson. Later in 2023, NFT holders will get the chance to access VIP tickets, backstage passes and submit music directly to the label for feedback. One holder will win a 1:1 conversation with Moxey.
Moxey — who played a key role in the success of Avicii, Kygo, deadmau5 and David Guetta through Ultra Records — aims to make Web3 and NFTs a foundational part of the new venture.
“I hope to make a company that’s much bigger than my last company within the next five years,” he said. “We really plan on making NFTs open a whole new door for you [the fan] that go way beyond the door that was available through the traditional record business.”
Helix Records will onboard its entire roster of electronic artists into Web3 and support them through the transition to NFTs and blockchain technology. The label believes this strategy will build a closer connection between artists and fans, and potentially enable supporters to benefit from the future success of their favorite acts. The label also hopes that NFTs will give them better insights into their artists’ fan bases, allowing them to identify and connect with the biggest and most active community members.
To power the label’s Web3 activations, Helix Records has partnered with FUEL — a software platform which enables artists and labels to build their own NFT storefront and control their branding. Billed as “Shopify for NFTs,” musicians have used the software to sell concert tickets, singles and collectibles to Web3 and Web2 fans.
“We are super happy to add Helix Records to our roster of musicians,” said FUEL founder Thanh Binh Tran. “Seeing pioneers like Patrick use our software gives us a glance at the future of music NFTs.”
While the Web3 hype has mostly died down since the dizzying NFT sales of 2021 and early 2022, artists and labels still see some promise in blockchain technology.
“Any way of making money for a musician is a blessing, because there are so few possibilities left,” said Marshall Jefferson, house DJ pioneer and one of the flagship artists on Moxey’s new label group. “An open area like this where your music actually has value and you can make a living of is an area worth exploring.”
The Helix Record Genesis collection will launch in February. The final date and details on supply and pricing will be announced shortly.