Music NFTs Part 2: The Platform Pick

As more music NFT platforms enter the market, I compare what I consider to be the four most interesting platforms and share why I'm aggressively buying NFTs from one of them.

As I described in part 1, one of the big reasons why I'm a proponent of music NFTs is because of the potential shakeup to the current royalty system. That makes me really bullish Royal.io, obviously. But royalties aren't actually the only reason I view music NFTs as having so much upside. I love being able to discover new musicians. I like finding people before they're famous. I'm genuinely a music fan, and I'll listen to just about anything. With the exceptions of "stadium country" and certain pop performers maybe. A big part of what I look for in a platform is what I consider to be artist quality in my own subjective view. But I also like helping artists financially if I like the music.

In my T-Pain post from a couple weeks back, I detailed how I was a hip-hop radio show producer at my college radio station. One of the things that I had to do each week was submit my list to a royalty reporting service known as BMI. While I did this religiously to the best of my ability, often times what I found was that certain independent artists didn't show up in the BMI database. This made it impossible for some of the really talented lesser known rappers and singers to get paid for their work. These are the kinds of artists that I like to support. They're also the kind of artists that have the most upside if you think you have good taste in music and want to speculate.

I'm obviously a big fan of Royal.io and have every intention of buying Nas' NFTs today. BUT, there are other music NFT platforms that deserve serious attention. There are probably even some that I have yet to discover, research, vet, etc. That said, there are three others that I feel I have done a fair amount of due diligence on. Sound.xyz, Catalog.works, and Mint Songs. If you've been following along the last week or so, you've likely already deduced that Mint Songs is my pick. Let's get into the why.

There are some noticeable differences in process between the platforms. Sound.xyz mints 25 editions of exclusive tracks at a unit price of 0.1 ETH and when all 25 are minted, they're gone. If you want one and missed out on the limited edition NFTs you have to go to a platform like Opensea to try to buy one on secondary without getting gouged. Catalog.works takes the exclusivity a step further and "presses" each song as a 1 of 1 NFT. Catalog also sells the pieces auction style and prices can vary considerably. Mint leaves the pricing, edition count, and exclusivity up to the artist. This is important; Mint also allows for music that has already been released to be NFTs. This is similar to what Royal is doing with the Nas drop today. Sound and Catalog only want new releases.

Where are the eyeballs?

One of the big things to consider when it comes to NFTs and to digital asset projects in general is community. That's a massive component to whether or not a project or currency can achieve a network effect. These figures don't necessarily give us an indication of engagement, but we can at least get a sense of reach when we look at Twitter follower and Discord member numbers.

Here's how those platforms stack up in some key metrics that I've personally defined:

As you can see above, Royal is the clear standout. Not surprising given who is behind the project. Sound and Catalog are pretty much even in both Twitter and Discord metrics. Mint Songs brings up the rear. When it comes to VC funding, Mint Songs is right on par with Sound, both of which have raised a small fraction of what has been raised by Royal. But what's interesting about the VC component is who has participated in the funding rounds. Though the funding rounds for Sound and Mint Songs are smaller, they have backing from the kind of funds you would hope they have backing from.

As amazing as it is to have funding from A16Z and Coinbase Ventures, Royal doesn't have Dapper Labs. As far as I can tell, only Mint Songs has funding from Dapper Labs. Who is Dapper Labs? Pretty much the OG of NFTs. Dapper Labs is behind CryptoKitties, Flow, and NBA Top Shots. They have a great track record and it's a nice validation of Mint Songs, in my opinion. Mint Songs is the platform that I have been using to aggressively buy music NFTs. It isn't just that there's solid venture capital backing though. While the platform is very far from perfect, Mint Songs hits probably 4 of my 5 reasons to buy music NFTs; with royalties being the one that is currently missing.

Quality of artists

The platforms do seem to have different barriers to entry both for artists and listeners. Sound and Catalog seem a bit more selective than Mint Songs. However, despite the exclusivity, I wouldn't say the broad offering of artists is considerably better on Catalog or Sound than it is on Mint Songs. There are some very obvious exceptions, however. Sound has Mariam Hill - who had a Top 40 hit six years ago. Catalog has artists like Harris Cole, Tess Henley, Alec King, DLG., and Vérité; each of whom have hundreds of thousands of monthly listeners on Spotify despite not necessarily being household names. There's a very clear overlay between Sound and Catalog. Almost all of the 20 Genesis artists on Sound are also on Catalog. The biggest artist on Mint Songs is probably either DYL, Deerock or Capshun. All of whom also have hundreds of thousands of monthly listeners. Capshun has also dropped a song on Catalog, though it has not received a bid.

Capshun not getting bid on Catalog is interesting to me because he sold out two of his three drops on Mint Songs. I think this speaks to unit pricing. This is a big advantage for Mint Songs because Catalog and Sound are hanging their hats on lower-mint, higher priced pieces. Notice I said higher price, not necessarily higher value. Catalog and Sound are catering to a much deeper-pocketed buyer. To get a track on Catalog, you literally need to spend thousands of dollars. You're only going to be in the hundreds through Sound.xyz, but that's still several multiples above what you can get on Mint Songs if you're willing to put in the work and spend the ETH more wisely.

Whale Alert?

Catalog is definitely benefiting from the presence of a whale. BlockchainBrett is buying up a ton of the tracks. BlockchainBrett has amassed 51 music NFTs on Catalog. In his about page on his website, he's apparently an early investor in Catalog. To me it looks like he's protecting that investment by eating up the supply of a lot of the music. I can't think of a good reason why he'd do that if the organic demand was robust. And if demand isn't robust, it's probably because the prices are too high. This is all just my opinion, but I don't think I'm that far off. Bidding against all of your customers is a good way to lose them. I think there's a pricing problem at Catalog. I know I'm beating a dead horse but unit pricing is important for adoption.

The pricing at Sound is a lot better than Catalog in my opinion. Largely because Sound is doing 25 editions at 0.1 ETH rather than 1 of 1 editions at 1 ETH or higher. This is more beneficial to both the user and the artist. For instance, Jesse Boykins III has released one song on both platforms. On Catalog, he dropped "Black Fantasy" as a 1 of 1. It was purchased by, you guessed it, BlockchainBrett for 1 ETH. But on Sound, Jesse sold out 25 editions of "Home Away From Home" at 0.1 ETH each for a total return of 2.5 ETH. Two and half times more revenue than he earned on Catalog. And he also now has 25 committed fans rather than just 1. This speaks to the importance of unit pricing.

Mint Songs NFTs are priced properly

Mint Songs, though it checks off a lot my boxes for a music NFT investment, almost wins by default against Sound and Catalog. The level of artistry on Mint Songs is a little behind its competitors, but honestly not by much. Like I said, you have to put in the work and you'll find gems on that platform. The best part is you won't have to spend hundreds or even thousands of dollars on music NFTs that don't yet provide any royalty. Generally a track on Mint Songs will cost you somewhere between $5 and $25. There are much more expensive options but those generally go unpurchased. I usually don't spend more than $15 unless I really like something.

Sound and Catalog, though compelling, want to help independent creators better monetize their work but they're doing so at such a high price point, I fear normal people won't even be able to consider it. It's alarming to me that an early investor in Catalog has bought 51 of the offerings. Meanwhile, Mint Songs has over a thousand unique wallet holders according to Opensea's secondary data. Now, some of them are the artists themselves. But there's definitely a user base following the project. I'm living proof.

Mint Songs, Catalog, and Sound are all still the little guys. Until the little guys take off, Royal is going to be the standard. Buying Nas at $50 is like buying a blue chip value stock that pays a 5-10% dividend. Though Mint Songs doesn't have the royalty component figured out yet, they have the pricing right for the digital collectible, undiscovered artist investment angle. From that vantage, Mint Songs is the best of the four. Mint Songs has a very engaged Discord server. It has artists that are buying each other and actually trying to help grow the platform. And most importantly, Mint Songs has some really good musicians selling some really good songs for not a lot of money and the market hasn't figured it out yet. While Catalog and Sound appear to be sellers markets, Mint Songs looks to me like a buyers market. That's good for the fans who are willing to make a few bets on underappreciated artists as I have. And tomorrow, I'll share one of my favorite bets with you.