# Music NFTs: The hard questions By [alex](https://paragraph.com/@alexpickr) · 2022-10-20 --- The power of scepticism resides in the ability to, once presented with the right evidence, form an informed opinion. The purpose of this entry is to offer my learnings, and open the space to challenge my views, research, and the accuracy of these ideas. In today’s post, I’ll explore a popular theory that comes up in most music NFT narratives, use some case studies to challenge the accuracy of such theory, and use data to explore what the options are for music NFTs. A very popular theory --------------------- “If the artist becomes big, the NFT will grow in value”. This seems to be an ongoing & popular idea amongst the music NFT community. The concept sounds good: if I support/invest in an artist early, I’ll be able to cash out on some profits while helping a talented individual to do something good for culture. As someone who loves investing in NFTs, I must say I’d love for this to become a reality. At the same time, we need to ensure the ecosystem is built on solid foundations so there’s longevity to this theory. A number of music artists have sold NFT collections and I’d like to use three examples as reference: **Fifi Rong** (low DSP performance, good NFT performance), **Kings of Leon** (celebrity artist, high DSP performance, low NFT performance), **DYL** (high DSP performance, high NFT performance). Using web3 community to grow an artist project ---------------------------------------------- This would be ideal, right? If your web3 community is engaged enough to spend money on your project, then surely they’d go to a DSP to listen to your music. At the end of the day, listening to music on some DSPs is free. But users are not as logical as we all think. It’s quite hard to get followers to listen to songs. Using the first example, Fifi is someone that’s proving to give value to her community. This is a clear case of someone starting at a grassroots level and building a brand & community that’s stronger than what could’ve been built in web2. Now, to play devil’s advocate, while Fifi’s brand and exposure is growing in web3, the traction on DSPs is low. A hypothesis one could make in this case is that the “support” a user can give is limited. The more celebrity artists that join web3, the more success there’ll be ----------------------------------------------------------------------- A great statement (and a common one) in the music NFT community. We’ve all heard about Kings of Leon (KoL) and their famous “NFT Yourself” release back in 2020. It made all music headlines. If the theory of “when an artist grows, their NFT value will grow” is true, we would’ve seen a very high trading volume and higher prices over time for KoL NFTs. For some reason, we’re struggling to see how this theory plays out for A-list artists. Is the theory only applicable to grassroots/independent artists? If so, what’s the incentive to buy music NFTs from big artists? Is this poor price performance concerning users? Grinding 24/7 ------------- If you’ve been around in NFTs for a while, you’ve likely heard of Dyl. I was lucky enough to get some of his Solana NFTs earlier in the year and his project is one that has kept me, as a NFT user & music fan, quite hooked. Even though we’re in a bear market, Dyl has managed to offer value to his holders - to the point his Solana listings keep decreasing while floor prices keep going up. On top of that, it looks like his DSP activity has been growing. This could be a good example of an artist that meets the criteria of the theory we’ve been talking about since the start of this post. An observation to be made is that, from what I can see, most of his listeners are consuming a song that was released (and potentially still controlled by) Atlantic Records. Two songs that were released after his NFT collections were sold out (DYOR and Gm) have a poor performance compared to the rest of his catalogue - which brings the question to my sceptical mind of how much these new “web3 fans” are contributing to the artist’s growth. Looking at the numbers ---------------------- One thing is clear, **it’s still very early for music NFTs and the right formula is still to be found**. Even “the right formula” isn’t a precise concept as we cannot expect that one-size-fits-all. In any case, the idea of “if the artist becomes big, the NFT will grow in value” needs data exploration: [The average investor holds shares for 5.5 months](https://finance.yahoo.com/news/average-stock-holding-period-121123957.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAACuAfJlmyo9jHtUflvTN51SrbhuOwKio9ItcFS7m18px-Qoa6ZOaBHHfFxxfLOO9OHuowOXZcqoKBbfTLGhQRub7bhFwXy_f9wWPgKHn1Girs_VB3EnmTRNtRYWdJ2lqvswypWPe-q1VGHPsGJKfm3FygyCyuf06CrjT3w8uACZ_). This begs the question: are music NFTs considered artist stocks? If so, are musicians supposed to engage with supporters in a way that incentivises NFT value growth at least for 5 months? We need to ask ourselves if we’re really proposing the right concepts to both artists and potential supporters. At the end of the day, the NFT space is not made so that artists who are early adopters can sustain their careers, but for every artist that comes later on to have the same level of opportunity. Let’s ask the hard questions ---------------------------- I’d like to end this entry encouraging everyone to ask the hard questions, don’t accept anybody’s opinion as being right, and try different things, break them and, above all, have some fun in the process. I’d welcome anybody to challenge these ideas & questions in the name of supporting the music community to grow long term. Not to grow in quantity, but in quality. Find me on Twitter to continue the conversation:  [https://twitter.com/alexpickr](https://twitter.com/alexpickr) Disclaimer ---------- These ideas shouldn’t be taken as definite or advice of any kind. My views are personal and always subject to change if the adequate evidence is presented.  This information is not financial advice and it’s intended for entertainment purposes only. --- *Originally published on [alex](https://paragraph.com/@alexpickr/music-nfts-the-hard-questions)*