The music world is beating to a new drum with NFTs

It isn’t easy being a musician—glory on stage doesn’t necessarily translate into dollars in the bank. The problem isn’t new. Record labels have always held an enormous amount of power in the music industry, and garnered a big chunk of the profits. However, in the last decade, the situation has worsened for musicians as streaming platforms further cut into their profits. 

This is because legislation that was created to protect artists hasn’t kept up with the changing technology. On traditional platforms like radio, royalties are split evenly between the record label and the artists, with a smaller fee going to backing performers. However, in most streaming services the labels retain the large majority of the profits, with artists receiving a mere 13-15%.1

The problem has become so severe that in April 2021, 150 leading British rock stars including Paul McCartney, Kate Bush, Robert Plant, and Stevie Nicks wrote a public letter to PM Boris Johnson,2 calling for new legislation to protect artists and change the way they are paid when their songs are streamed online. And if things weren’t difficult enough due to streaming, the pandemic further cut into musicians’ profits when concert tours and live events— major sources of income for artists—were canceled in one fell swoop. 

There is no question that the music market is ripe for change, and NFTs (non-fungible tokens) offer an alternative profit model that returns power and profits to the musicians. Musicians can sell NFTs of their music directly to fans, circumventing streaming services or third-party platforms, or directly to music retailers as was possible in the past with self-produced CDs. As with all NFTs, royalties can be integrated into the NFTs’ smart contract, giving artists a secure way to earn residual income from their music.

Kings of Leon were one of the first bands to capitalize on the potential, becoming an NFT pioneer in the music world. The band began selling NFTs called “NFT Yourself” in March 2021 for the Ethereum equivalent of $50. Each NFT included a copy of the band’s latest album, as well as perks like unique artwork, a one-off gold record, and various outtakes. They were extremely successful—the band sold 6,500 tokens in two weeks for a total of $2.2 million3. It didn’t end there—the NFTs have generated another $246,000 in aftermarket sales, of which the band collects a percentage.

That is only the tip of the iceberg of what bands can do with NFTs. NFTs can be created to give token holders access to exclusive performances, livestream interviews and shows, and limited-edition albums. Fans are willing to invest because NFTs are stored on the blockchain, giving them undeniable proof that they are the authentic owner of items. Interest is already spreading—in addition to Kings of Leon, musicians as diverse as ​​electronic producers 3LAU and alternative artist Grimes are already earning millions a month selling NFTs. 

Let’s look at some of the potential ways NFTs can be used in the music industry. 

Enhancing concerts and live music events

An NFT with a smart contract can add value to all types of products, including concerts and shows that power the music industry, and are returning in full force as the pandemic wanes. Musicians have already begun selling concert NFTs in lieu of, or in addition to, traditional concert tickets. An NFT can be more than just a way to gain entry into an event. Concert NFTs often include artwork related to the concert, practice clips, and other perks. They’re also a type of memorabilia of the event and have the potential to gain value over time, like ticket stubs from iconic concerts in the past. NFT can even enhance the event itself. For example, token holders could be eligible for free drinks and snacks, or even backstage passes. 

Like in music production, concert NFTs reduce the need for middlemen. The performers pocket the revenue from NFT sales directly, and can even allocate percentages to their service providers. NFTs could even be set up as event equity, in which token owners would earn a small percentage of the concert profits. That way, fans could actually earn money for going to their favorite artist’s concerts. 

Crowd funding

Like all art, creating music requires an upfront investment. Artists often spend months, or even years, working on an album before they see a penny of profit. The big names may receive an advance from the record label, but for the less-well-known milieu, it’s a gamble with an unknown outcome. 

NFTs enable fans to support the creative process of an artist they love, so they can enjoy more of that artist’s work. They function like a Kickstarter campaign, but with platforms like Kickstarter, the funding is really a donation, as fans aren’t eligible for any part of the profits. NFTs, on the other hand, can be set up to give token holders a percentage of the future revenue of the project they are supporting. This model allows artists to raise money for songs and albums and also gives fans the potential to monetize their fandom.

Danny Saucedo, a popular Swedish musician is pioneering this strategy. After leaving Sony Music to become independent, he began creating NFTs and posting them on social media, before starting work on a new single. His fans purchase the NFTs of his future work, often allowing him to raise more money than he would have earned as an advance from a record label.  He obviously believes in the potential of the model. He recently invested in Corite4, a Swedish blockchain platform created to simplify blockchain fan funding. 

Investing in music NFTs—what is NFT stock?

There is no question that NFTs give music fans a unique value proposition—the option to own something that comes directly from their favorite artist, strengthening the artist-fan relationship. The proven success of leading artists has also attracted the interest of the financial world. But are music NFTs, or NFT stock, also a good investment? 

What are NFT stocks? NFT stocks are stocks in companies that are invested or active in the NFT arena. In the music world, that can be publicly traded companies that are actually creating NFTs, or companies building the infrastructure to create, buy, and sell music NFTs. This is a new domain, so it can be hard to predict success for any individual initiative, or to decide which NFT stocks to buy.  Any individual investment is inherently risky, even when investing in top NFT stocks, as an NFT stock price tends to fluctuate frequently. 

Investors excited about the potential of the NFTs in the music world can also invest in an NFT-related ETF (Exchange Traded Fund) such as Defiance’s NFTZ. Instead of gambling on the best NFT stocks, or betting on a single artist, NFTZ provides indirect exposure to a range of companies involved in the digital economy


1 “Paul McCartney and Kate Bush among stars calling for change to streaming laws”, April 20, 2021, https://www.bbc.com/news/entertainment-arts-56815282

2 “Paul McCartney and Kate Bush among stars calling for change to streaming laws”, April 20, 2021, https://www.bbc.com/news/entertainment-arts-56815282

3 “Are NFTs The New Napster? This Time The Music Industry Isn’t Taking Chances”, August 21, 2021,https://www.forbes.com/sites/michaeldelcastillo/2021/08/13/are-nfts-the-new-napster-this-time-the-music-industry-isnt-taking-chances/?sh=2b5f4f8c5a90

4 “HITCO-backed fan funding firm Corite to launch blockchain platform, closes US $2.2m pre-sale for $CO token”, July 20, 2021 https://dailynewsprime.com/hitco-backed-fan-funding-firm-corite-to-launch-blockchain-platform-closes-us-2-2m-pre-sale-for-co-token/