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5 NFT record companies that are redefining music
More and more musicians are using NFT technology to take back control, leading to a healthier and more artist-friendly web3 music industry. Through music NFTs and NFT record labels, emerging and mid-tier artists serve, build community and break free from a traditional music industry that only serves the few. Not only that, but time and time again NFTs prove to be the way to make money as an unsigned musician. Interested in learning more about NFT record labels? Continue reading.
What is an NFT record label?
To understand what an NFT record label is, it is important to identify what a record label is. A record label is a company that scouts new artists, develops them and coordinates the production, production, distribution and marketing of records. Traditionally, artists depended on record labels to release music and establish a career.
While record labels still hold a lot of authority in the music industry, many artists are choosing the independent route. Depending on the contract, the record companies have the power to own the artist’s music for the rest of their lives. High-profile cases, such as Taylor Swift’s masters controversy, have further shed light on how certain traditional labels can exploit young artists.
On the other hand, an NFT record label guarantees the artist full ownership of their music. By issuing a certificate of ownership, an NFT record company ensures that the relationship between the record company and the artist is mutually beneficial.
For NFT record companies, the main token – or music format – is NFTs, stored on the blockchain. In addition, NFT record labels help artists build a community of fans and use web3 services, such as NFT marketplaces, to distribute their music.
How does an NFT record label work?
The NFT record label industry is still in its infancy. Therefore, the exact scope of an NFT record label largely depends on those who establish NFT records. As for the music itself, NFTs are available as a format, along with other traditional formats such as vinyl, CDs and MP3s and so on. In addition to music NFTs, music fans can expect other digital assets such as digital goods and art to accompany the releases, as well as metaverse performances and music videos.
NFT record companies can function as DAOs or collectives where the artist-fan relationship is more valued and the fan community is prioritized. This could mean fans voting on which tracks to include on an album, deciding on single artwork and more.
However, NFT record companies are not free to set up. Founders must consider operating costs, the costs of creating and marketing NFTs and gas taxes. In addition, the costs of recording transactions on the blockchain must also be taken into account.
The top 5 NFT record labels that are changing the future of music
Death Row Records
Snoop Dogg bought the legendary Death Row Records earlier this year. After the acquisition, he announced that Death Row Records will be an NFT label. Speaking at Clubhouse, he said: “Death Row will be an NFT label. We will put our artists through the metaverse and through a completely different chain of music. Just like how we broke the industry when we were the first independent [label] to be major.” Having an artist like Snoop Dogg not only endorse but also run an NFT label continues to cement the growing importance of the web3 music industry.
MoonwalkerFM
Moonwalker FM was one of the very first NFT record companies. Each NFT hit is paired with a lo-fi song on streaming platforms. As a result, NFT holders can claim approximately 30 percent of streaming profits in the form of various rewards.
In addition, MoonwalkerFM created an industry-first DApp that shows NFT holders which songs their NFTs are linked to. Plans are also in place for events, exclusive contests, merchandise, space docking, early access to drops and more.
Hume
Hume is a collective and NFT record label comprised of hybrid virtual-physical artists. The main goal is to develop meta stars with a back story, which the virtual label and entertainment studio revolves around. In November 2021, the NFT label unveiled its first metastar, Angelbaby, who dropped her first single, “NFT” and performed at FLUF House in Art Basel Miami.
The world has records for you
World Has You Records combines art and music, using web3 as a way to unite people through their love of music. According to its founders, AlmaD and Kristen, World Has You Records aims to release “exclusive, high-quality music and art for the community” and “create memorable experiences” while “discovering and developing new talent.”
Room Yacht
Space Yacht is an NFT record label established by a group of underground partygoers in Los Angeles. The founding duo, Henry Lu and Rami Perlman, have organized over 100 events in different countries and are now venturing into the web3 space. As a record label, Space Yacht releases music NFTs in phases that build on previous ones. Their NFT collections, Iconography Volume 1, 2 and 3, give music fans a taste of what to expect from Space Yacht as it continues to grow.
Can unsigned actions make money with NFTs?
A significant number of unsigned actions have made more money selling NFTs than via streaming platforms. According to Delphi Digital, catalog sales are not tied to an artist’s popularity on Spotify: “Sales have tended to cluster around ~1 ETH, without a ton of variation based on Spotify monthly streams. This suggests that early collectors are willing to support less established artists and puts a premium on the ‘first’ of early adopter musicians.”
There are many success stories of unsigned artists reaping the benefits of web3. Iman Europe earned 22.2 ETH (about $60,000) by selling 5 singles and a music video as NFTs. LATASHÁ sold a song for $3000 on Catalog, while Moruf Adedayo Adewunmi managed to make enough money to support his family just eight months after first experimenting with music NFT.
How NFTs are disrupting the music industry
It’s safe to say that NFTs and web3 are disrupting the music industry as we know it. In web2, artists depended on labels, streaming services and tours to generate income. In addition, they had to deal with countless middlemen who take a significant share of the royalties artists earn.
Through NFTs, artists can earn money by selling music NFTs directly to fans without the need for intermediaries such as streaming platforms, labels and distributors. Also, the low barrier to entry in the web3 music industry means that any artist can release music and make money as an unsigned musician.
Since the price of most NFTs is higher than one Spotify stream (which is $0.003 – $0.005 per stream), artists do not need millions of streams to generate a decent income. Therefore, they do not need to sell or commercialize their music, as everything depends on having a small community that believes in what they are doing.
It is also important to mention that the smart contracts behind music NFTs mean that artists cannot be cheated to receive their money. Smart contracts allow artists to track who the holder of the music NFT is, monitor sales on the secondary market, and receive a percentage of the royalties every time the holder resells the NFT.
Final Thoughts: NFT Record Labels and the Future of the Music Industry
Without a doubt, NFTs pave the way for a fairer and more democratic music industry. NFT record companies are some of the main players leading this change. While traditional labels are unlikely to become obsolete, they must move with the times by adopting web3 ethics and ultimately putting artists at the forefront.
