- Sound.xyz, an NFT music platform, has raised $20 million.
- Investors include Andreessen Horowitz’s a16z crypto fund and Snoop Dogg.
- The platform offers an alternative model for monetizing music.
In the rapidly evolving tech space, startups are trying to challenge traditional business models daily. One of these is Sound.xyz, an innovative music platform that uses NFTs to monetize music. Backed with $20 million by investors such as Andreessen Horowitz’s a16z crypto fund and hip-hop legend Snoop Dogg, the platform aims to reshape how artists are paid for music.
Sound.xyz: New Take on Music Streaming
Sound.xyz is pioneering a new approach to music monetization. Unlike traditional platforms like Spotify that pay artists based on the number of streams, Sound.xyz allows artists to mint their songs as non-fungible tokens (NFTs) and sell them directly to fans.
This model empowers artists to set their own prices and earn money upfront rather than waiting for streams to accumulate. Moreover, it also enables users to listen to the songs for free without paying for a monthly subscription.
Does Sound.xyz Charge Fees to Artists?
Sound.xyz has a unique approach to fees. Initially, the platform took a 5% fee on primary sales and 2.5% of Sound Swap sales to fund ongoing development.
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However, the platform has since eliminated its percentage-based fee on mints. This means artists can now retain 100% of the revenues generated from their Sound drops.
This is a significant shift from traditional music platforms, which take substantial cuts from artists’ earnings. For example, Spotify takes 30% of all revenue generated on the platform.
Is Sound.xyz Decentralized?
While Sound.xyz operates on blockchain technology, it’s important to note that the platform is not fully decentralized. The platform’s decision-making process is not distributed among its users or artists.
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For instance, Sound.xyz decided to change its fee structure, moving from a percentage-based fee on mints to a flat fee. This decision was made without the input of the artists or users on the platform.
While this allows the platform to adapt and evolve quickly, it also means that artists and users have less control over its rules and policies. This could lead to decisions that may not be in the best interest of all artists or users.
Can Sound.xyz Compete with Spotify?
Sound.xyz is indeed a potential competitor to Spotify, especially considering its unique monetization model and artist-first approach. While Spotify has a vast user base, only a tiny fraction of artists on the platform make a full-time living from their music.
If Sound.xyz could enable artists to earn more, it will likely attract more artists, helping it compete with Spotify. Moreover, Sound.xyz offers free listening for users, which could attract a significant audience.
Still, the platform’s ability to compete with Spotify will largely depend on whether it can attract big names to the site.
On the Flipside
- Sound.xyz received $5 million in investment back in 2021, in a funding round led by a16z. So far, the platform has paid out $5,492,357 to artists.
- Sound.xyz has not disclosed the number of users listening to music on the platform.
Why This Matters
If Sound.xyz were successful, it would prove a real use case for NFTs in business. This will make investors take NFT technology more seriously.
Read more about crypto/NFT music streaming platforms:
Top 10 Decentralized Music Streaming Platforms to Consider in 2022
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