philip lelyveld The world of entertainment technology

Music NFT sales in 2021 – what we learned

• Average music NFT pricing remains expensive, but has fallen over time. Between February and December 2021, the average price per music NFT fell by 46%, from $18.8K to $10.2K per unit. The median fell by 27% over the same time frame, from $1,000 to $825 per unit.
• The most popular genre by share of revenue was Electronic (65%) followed by Hip-Hop (19%).
• Music NFT marketplace competition has increased significantly. Early in the year, Nifty Gateway dominated with over 60% share of primary music NFT revenue. By the end of the year, though, the leader (OpenSea) had only 28% share of primary revenue, facing competition from many new music NFT platforms like Sound, Pianity, and Nina.
• The use of non-Ethereum blockchain protocols also diversified significantly. In H1 2021, Ethereum had dominated with over 90% market share by drops, but only claimed about 50% of drops in H2, as alternatives including proof-of-stake chains like Tezos and L2 chains like Polygon, garnered more adoption. ...

Grimes and Steve Aoki both drove a lot of attention to NFTs in early 2021 thanks to their celebrity status and the high bids they garnered for their sales: Grimes earned over $6M last February across ten drops, and Steve Aoki raised nearly $5M on 13 drops (all on Nifty Gateway). Steve Aoki in particular has continued to be active and outspoken about the benefits of Web3 and NFTs for artists, and has also expanded his Web3 footprint with his Aok1verse project, launched in 2022. ...

• On-chain, i.e. built into an NFT’s smart contract, such as NFT revenue splits or on-chain music storage, or
• Off-chain, i.e. delivered and experienced outside of blockchain-specific environments, such as in-person events, physical merch, and general community-building

It’s important to note that the audio (and accompanying visual) portions of music NFTs are often not stored directly on-chain, but instead are linked from the metadata of an NFT’s smart contract and live on third-party sites such as IPFS or Arweave. ...

Perhaps due to more direct control over – and flexible approaches to – their IP, independent artists have led the charge in carrying out early experiments with royalty-based utility. ...

Opulous has tried to avoid potential securities risks by working with the SEC to develop Security Non-Fungible Tokens (S-NFTs), which they tout as meeting federal regulatory requirements. ...

A new crop of startups like Unlock, Temple, Highlight, and Medallion have recently emerged with the explicit focus on helping artists launch NFT-gated online communities, across multiple platforms including Discord, WordPress and Discourse, in addition to whitelabeled sites. Here again we see the trend of individual artists spearheading experiments, followed by dedicated companies emerging to scale those experiments into long-term software services. ...

 “VIP,” “festival,” “tickets,” “show,” “meet & greet,” “guestlist,” and “backstage” were among the “live experience” terms found in NFT offerings across all genres.  ...

See the full story here: https://www.waterandmusic.com/music-nft-sales-in-2021-what-we-learned/