Report Regarding Music NFTs (Essay Sample)

The music industry has constantly been improving in record labels and revenue generation for decades, but individual artists have not been fully compensated for their work and talent. A larger segment of the music industry is dominated by record labels, which manage and control the artist's work, dictating where and when it will be played and the concerts that can be attended. This factor significantly limits the artist's revenue since they only get 50% of the total sales until the introduction of music NFTs (non-fungible tokens), which have significantly transformed the music industry and enabled artists to own direct rights to their talents. NFTs are characterized by digital assets that represent real-world objects like music, art, videos, and in-game items housed on blockchain platforms like Ethereum, Binance Smart Chain, and Solana.
The Web3, in collaboration with music NFTs and the metaverse, will revolutionize the traditional music industry and usher in a new age of transparency, higher income levels, and better communication between artists and their fans. The metaverse will combine blockchain and cryptocurrency technologies to create a virtual experience that artists can use to reach out to their fans. Web 3, on the other hand, will act as a medium for artists to use without worrying about intermediaries while increasing their funding pool (Locke, 2022). This essay will give insight into music NFTs, their current and future projections, applications for watermarking technology within music NFTs, the relevance of music to NFTs, metaverse, and key market players in the space. The essay will also focus on the total addressable market for music NFTs, metaverse, TV/film, news, sports, and gaming. Proper integration of music NFTs, the metaverse, and Web3 among artists will potentially increase their revenues while boosting the total addressable market for the industry.
Forecasts for the Music Industry as a whole
The music industry is projected to grow with time as more artists come up with content, and as more people are connected to the Internet, they can access different records from diverse music platforms. Short-form videos like Triller and TikTok, e-fitness like Peloton, and platforms such as Facebook have started licensing music Internet Protocol (IP) from rightsholders, providing new avenues for future monetization. More short-form videos translate to increased streaming from the diverse pool of listeners. In turn, major music and social media platforms will capitalize on them to improve their total views and revenues. Artists will also start incorporating technology into their works to improve their revenue sources, including Web3, metaverse, and music NFTs. These technologies will be accessed through new platforms as most fans between 18-29 years tend to find new music via video games. A significant number, 50%, teenagers and adults find new music via platforms like Spotify and Apple Music, while 45% access new music through social media platforms (Eliezer, 2022). With time, more music will be accessed through streaming as more individuals conveniently access smartphones and smart devices, driving growth in the industry. The following chart shows global music recording industry revenues since 2001.
Global Music Recording Industry Revenues: 2001-2019 ($ Billion)
Current and Future Scenarios of Music NFTs
Globally, music artists and creators are often managed by their record labels, and they do not realize their full financial potential due to restrictions and limitations that dictate the sale and play of their work. Last year's introduction and adoption of NFTs in the music industry have enabled creators to value their art, set rates for their work, and control the secondary market for their products. Artists keep all the rights to their works, and royalties are earned for every transaction of the NFT, promoting complete autonomy and authenticity in the process (Raman & Raj, 2021). Currently, more artists are adopting the NFT technology and doing away with record labels to increase their revenues and have a fair share of their profits in the long run. Creators can create unique content and present it in moments that do not require an actual stage to perform. Dozens of marketplaces have since popped up to create, buy, trade, and sell music NFTs across the globe, including OpenSea, Nifty Gateway, Catalog, Royal, Band Royalty, Opulous, Foundation, and Arpeggi. Music NTFs can be minted when creators offer unique digital music copies and list their buying prices. Non-creators can also purchase music NFTs through royalty-bearing NFTs, where revenue is generated whenever the music is played or resold after its value increases.