This slide deck is meant to serve as an abridged version of a longform analysis of 2021 music NFT sales that the Water & Music community conducted throughout April 2022.

You can access the full article — which includes a much more in-depth discussion of case studies, NFT utility, and sales trends beyond what is in this deck — by clicking here.

The underlying sales data that informed our analysis is available in our music/Web3 dashboard, which is available exclusively to Water & Music members.

Contributors

👑 🧐 🛠️ 🪣 Brooke Jackson

🧐 🪣 Tony Rovello, Chrissy Greco, Brodie Conley, Lindsey Lonadier

🪣 Cosmin Gafta, Ehren Hanson, Erik Kim, Andres Botero, JHennyArt, Thomas Vieira, Nishant Gairola

🧐 Kristin Juel, Rob Campanell

🛠️ Brandon Landowski, Christina Calio, Cherie Hu

🎨 Ana Carolina

🙌 Mary Maguire, Cathleen Yu, Scott Korchinski a.k.a. HOUNDTRACK

👑 project lead

🧐 writer/analyst

🛠️ article/deck editor

🪣 data researcher (backfill project)

🎨 visual designer

🙌 other contributors

📖 Summary

We tracked ~1,500 NFT drops throughout 2021, representing more than $86M in primary sales. These overall sales spiked early in 2021, cooled down in the summer, and then rose strongly in Q4.

[LABELS] Indie artists accounted for the majority (64%) of primary music NFT sales.

[GENRES] The most popular genre by share of primary sales revenue was electronic (65%), followed by hip-hop (19%).

[PRICING] 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.

[PLATFORMS] Marketplace competition is heating up. Early in the year, Nifty Gateway dominated with over 60% share of primary music NFT revenue. By the end of the year, the leader (OpenSea) had only 28% share of primary sales revenue, facing competition from many new platforms like Sound, Pianity, and Nina.

[PROTOCOLS] Ethereum claimed only ~50% share of number of music NFT drops in H2, as alternatives like Tezos, Solana, and Polygon garnered more adoption.

[UTILITY] Artists continue to experiment with different forms of utility for NFTs, like royalty shares, usage rights, NFT splits, live music access, and community-building.

Table of contents

Click to jump straight to whichever section you’d like

Background + context

Scope + methodology

Summary stats

wen utility?

Pt. 1: On-chain

Pt. 2: Off-chain

Outstanding questions + directions for future research

How to support our work

Fact-checking form

Appendix

Background + context

📈 Our Music/Web3 Dashboard

At W&M, we’ve been tracking music NFT drops since summer 2020, in a members-only database updated weekly

Not exhaustive, but (we believe) the most comprehensive view of music NFT activity that exists in the world today

Cited in Bloomberg, Fortune, CNBC, Forbes, Billboard, Rolling Stone, Messari, NFT Now, and many other publications

Go-to resource for some of the world’s top venture capital firms, record labels, and artist-management companies to gain crucial market context in an otherwise noisy information landscape

[done]

We last published a music NFT market deck in April 2021; the market has changed dramatically since then, with at least 20 new music NFT platforms launching in the second half of 2021 (including those pictured above)

At the same time, we ourselves at W&M have since embarked on our journey into becoming a DAO for collaborative research — going through the Seed Club accelerator, launching our $STREAM token, and publishing two collaborative reports on the state of music and Web3 (i.e. Season 1 and Season 1.5), all in the last eight months

As NFTs continue to pervade the mainstream discourse, we thought now would be a good time to examine what we learned from music NFT sales in 2021, using our new collaborative capabilities as a DAO to paint a more nuanced picture of the market and do the long tail proper justice.

Scope + methodology

WTF is a “music NFT”?

We define a “music NFT” as an NFT that satisfies any of the following criteria:

Sold directly by an artist or music brand (e.g., Vérité, Billboard)

Features cited musical/audio contributions from a recording artist (e.g., The Dreamers)

Tied inherently to an artist or music brand in its perceived value (e.g., Leon Bridges / Wrangler, Nas on Royal)

Revolves around music or music culture as its core theme or value proposition to collectors (e.g., SpeakerHeads)

Released on music-specific NFT platforms (e.g., Royal, Catalog)

This is perhaps a more liberal interpretation of “music NFT” than those at other research organizations. Namely, in our view, an NFT does not have to contain audio to be related to music.

🔨 Methodology

Phase I: Tracking (Sep 2020–present)

Our core research team has been manually tracking and logging music NFT drops on a weekly basis from multiple sources, including:

Automated newsfeeds and alerts

Twitter announcements

W&M Discord server discussions

General desk research of NFT marketplaces

Direct data feeds from music NFT platforms

💱 To capture sales data, we use a historical ETH-USD exchange rate to account for volatility, and calculate USD equivalents as close to the mint/sale date as possible.

Artists’ genre and label status are compiled from sources including:

Artist websites

Streaming sources (e.g. Spotify, Chartmetric)

Industry databases (e.g. Rostr)

Official music metadata prodivers (e.g. Gracenote)

Crowdsourced metadata resources (e.g. MusicBrainz)

🔨 Methodology

Phase II: Backfilling (Apr 1–Apr 18, 2022)

A major motivation to pursue this collaborative project was to involve our community more in capturing the long tail of music NFT drops, especially ones that our core team may have missed throughout 2021.

Over the course of 2–3 weeks, over a dozen members of our community helped update sales information across hundreds of NFT collections, including:

Backfilling our database with new information on missing drops

Updating information on the collections that were still for sale at the time of first recording

The result: 300 records from 2021 updated or added to the database — ⬆️ 30% increase in total number of drops accurately represented

🔨 Methodology

Phase III: Exploratory analysis and synthesis (Apr 19–May 5, 2022)

We spent the final two weeks of this collaborative project embarking on two different kinds of analysis:

🔢 Quantitative —

Aggregate sales revenue (USD equivalent) over time

Number of drops over time

Characteristics around the types of sales, platforms, and artists behind the drops

✍️ Qualitative —

Identifying and categorizing select projects in our database with unique forms of utility (e.g. access to in-person experiences, charitable/philanthropic components, token-gated communities), cross-checking with project sites and press releases

Contextualizing these drops against our high-level research from our Season 1 and Season 1.5 reports on music/Web3

🚨 Disclaimers

Primary sales only — We are not capturing secondary sales in this database and slide deck (for now).

Prioritizing identifiable sales events — For the sake of efficiency and clarity on the market, our methodology prioritizes NFT drops that have generated at least one primary sale.

Geographic bias — The database represents the knowledge gleaned by W&M community members who follow certain music-industry trends, artists, genres, and subcultures, and tends to center around North America, Australia, and Europe. We have limited data points for other world regions including Asia, Latin America, The Middle East, and Africa.

NOT exhaustive — There’s likely a long tail of music NFT drops that we haven’t captured in our database due to our relatively manual tracking methodology, but we nonetheless believe it is the most comprehensive such resource that exists today.

Summary stats

$86M+

In primary sales of music NFTs in 2021, across ~1,500 different music NFT drops

📊 Overall music NFT sales spiked early in 2021, cooled down throughout the summer, and then rose in Q4

💧 Looking at the number of drops over time in relation to revenue, there was a significant shift from big-event, celebrity-driven drops earlier in the year, towards relatively lower price-per-unit sales events across a wider range of platforms later in the year

We noticed a directional rise in drop activity in H2 2021 due to a number of new platforms that focused on music-related NFTs that launched in that period, including Sound, Pianity, and Nina ��� most of which focus on releases from independent artists

💼 Indie and unsigned artists comfortably dominated music NFT sales in 2021

Major-label artists certainly drove a lot of attention to the market early on in the year — but the appeal of the absence of middlemen, along with the direct control of rights and access to artists’ communities, drove a lot of activity to NFTs for the independent sector

Leading artists in 2021 by primary NFT sales

3LAU (~$18M): Raised $55M as co-founder of Royal

deadmau5 (~$2.7M): Co-founded Pixelynx and invested in MODA

Tory Lanez (~$1M): Faced accusations of “being duped” from fans

Grimes (~$6M): NFTs themed around her WarNymph avatar project

Steve Aoki (~$5M): Currently building the A0K1VERSE

Featured indie artists in our report

Latashá: Head of Community Programming at Zora + rapper who centers music as the core “utility” in all her NFT drops

Daniel Allan: Electronic artist who raised $135K through six tiers of NFTs on Mirror for his Overstimulated EP

(many more cited in the full piece 😊)

Vérité: Singer-songwriter and one of the first artists to experiment with royalty-bearing NFTs, most recently on Royal

Maelstrom: DJ/producer who dropped and hour-long mix on Sound, which earned $41K in primary sales split among 14 collaborators

💻 Early high-priced “event-style” drops on Nifty Gateway dominated H1 2021, with the platform representing over half of the primary sales we tracked during