This year, we’ve seen plenty of evidence that NFTs can shake up the economics of selling visual art, but there’s been less activity when it comes to web3 upending the economics of different verticals in the art world, including music.
Sound.xyz is a new startup looking to help recording artists monetize their community through NFTs, as the startup looks to build out a suite of tools designed to bring musicians into the so-called “Web3” fold. The startup released is first product earlier this month, Listening Parties, which enable artists to sell NFTs tagged to the release of new songs.
The startup tells TechCrunch it has raised $5 million in a seed raise led by Andreessen Horowitz. Other investors in the round include Variant Fund, Weekend Fund, Scalar Capital, Flamingo, Packy McCormick and 21 Savage, among others.
The startup is looking to push emerging artists to monetize their work more effectively by leveraging NFTs and help them rise above earning minute fractions of pennies per stream on platforms like Spotify.
“We’re building a suite of economic tools to help artists monetize their songs in new ways,” Sound CEO David Greenstein tells TechCrunch. “The problems that we want to solve are: Can we get music heard and can we get artists paid?”
The startup has partnered with a number of “crypto-friendly” recording artists that have been engaging with the community. The early drops have been limited to a couple dozen limited-edition NFTs that have sold out instantly. While selling $10,000 worth of NFTs may not sound too noteworthy in an industry friendly to million-dollar sales, Greenstein says the proceeds make a big difference to artists who might need hundreds of thousands of streams to earn that same amount on Spotify. As the startup gauges demand for NFT drops tied to song drops for certain artists, they have ambition to release more NFTs to the community. The startup notably does not take a commission on the sales and the NFTs.
The team has been experimenting with other features for the drops like enabling NFT holders to leave comments on the streams for artists to read. Down the road, the startup wants to create broader tools that allow musicians to crowdfund from fans to create new works and tackle new projects while also creating new incentive models for curators to discover and showcase new music.
Sound is not the only player in the NFT music space. Last month, a16z Crypto backed Royal, an NFT music platform looking to tokenize royalties and sell them to fans. Audius, a music-streaming platform on the blockchain, has raised over $13.5 million in funding from firms including General Catalyst and Coinbase Ventures.