Music NFTs can reshape the indie music industry

Existing music NFTs can only represent one song and can’t be updated, limiting artists who want to offer evolving content.

Independent (indie) musicians face many challenges on their way to recognition and financial stability, often stemming from the centralized nature of Web2 platforms such as Spotify, Apple Music and SoundCloud. While these platforms initially offered promising paths to exposure, the reality has fallen short, leaving artists struggling to secure fair compensation in terms of royalties and control over their work.

The issue lies in the way streaming services distribute revenue: a meager portion reaches the artists themselves, with record labels often negotiating significantly higher payouts than indie musicians for their work. Spotify’s reported payout per stream further exemplifies this disparity, falling within a paltry range of $0.003 to $0.005 in 2024.

Adding insult to injury, Spotify’s recent policy change throws another obstacle in the path of indie artists. In 2024, the platform will cease royalties for tracks receiving fewer than 1,000 streams within a year. While technicalities suggest these tracks will still accrue royalties, the funds will be funneled upward, often benefiting bigger artists. This 1,000-stream cliff creates a significant barrier for indie musicians attempting to break through and build a fanbase.

One stat you won’t find in your Spotify Wrapped is how much artists are paid for all that listening on the platform.

The max possible in 2023 is $0.003 per stream. And in 2024, Spotify will stop paying anything AT ALL for 2/3 of the tracks on the platform. pic.twitter.com/OCMHsHNce5

— United Musicians and Allied Workers (@UMAW_) November 29, 2023

Another major challenge for indie artists is building a loyal fanbase. The current market is saturated with countless independent artists vying for attention. Building a personal brand and effectively utilizing social media platforms can help indie musicians connect with their audience and cultivate a fanbase, but it takes time, money and effort to make it big.

How NFTs can help musicians

This is where Web3, particularly nonfungible tokens (NFTs), emerges as a solution with the potential to transform the indie music industry. Music NFTs allow artists to sell songs, albums or exclusive digital content directly to their fans. The NFT approach bypasses intermediaries like record labels and streaming platforms, allowing artists to capture a larger share of the revenue generated by their work. Unlike streaming, where earnings are based on unpredictable play counts, NFTs offer the potential for more transparent and direct income streams.

Music NFTs also act as a bridge between artists and their fans, fostering a sense of community and ownership. By owning an NFT, fans actively support the artist and gain access to various benefits like early access to new songs or exclusive behind-the-scenes content.

The limitations of current music NFTs

While music NFTs already exist on several blockchains, they can only represent one digital asset, such as a single song. This restriction is highly inflexible, as musicians typically work with multiple songs packaged as an album or playlist.

The current music NFTs are permanently static, lacking the capacity for updates or changes. Musicians desire the ability to evolve and modify their music and copyright terms over time, enhancing fan engagement by offering a continuous stream of fresh content.

Although music NFTs hold great promise for fostering deeper connections with fan bases, this potential hinges on one critical factor — the ability to update the information embedded in the NFT itself.

Introducing dynamic Data NFTs

Itheum Protocol, an omni-chain data ownership infrastructure layer , aims to overcome these limitations by allowing musicians to develop and update their content through its Music Data NFT technology.

At the heart of the Itheum Protocol lies Data NFT technology, which allows musicians to transform static or dynamic data assets into NFTs. These NFTs function as transferable licenses, granting ownership and control over sharing or trading access rights to the data. Data NFTs empower creators to tokenize their data, similar to other NFT assets, but with the added flexibility of managing access rights.

Unlike traditional NFTs that represent static assets, Music Data NFTs can be updated by artists, allowing for evolving content. This dynamic capability has the potential to enhance fan engagement, offering features like unlocking additional content upon interaction. Moreover, Music Data NFTs give artists greater control over distribution and royalty structures.

Verified fans who own Data NFTs can also establish direct communication with artists, creating access opportunities for exclusive content such as unreleased music or merchandise. This connection could strengthen the bond between musicians and their fanbase.

Cointelegraph Accelerator participant Itheum envisions Music Data NFTs operating seamlessly across various blockchains. The envisioned interoperability enables artists to access diverse NFT ecosystems, potentially building fanbases and extending their exposure to a broader audience across various blockchain communities.

Key features of Data NFTs. Source: Itheum Protocol

Giving the power to musicians and fans

Musicians can showcase their Music Data NFTs on NF.Tunes, a Web3 music portal built on Itheum Protocol’s technology. The platform serves as a space for artists to exhibit their music Data NFTs, allowing fans to explore and listen to new music while engaging with artist communities.

With its Music Data NFTs, Itheum paves the way for a more artist-centric future in the music industry. By addressing the limitations of the current NFT models, Itheum offers a glimpse into a future where indie musicians not only navigate the labyrinthine world of music but thrive in it.

Are you an indie musician who wants to use Music Data NFTs? Get onboarded here.