What is the allure of Sound.xyz, the leader of the music NFT track, with a16z as the lead investor?

What makes Sound.xyz, the top music NFT platform with a16z as the main investor, so appealing?

Authors: Blocking, Climber

On July 12th, foreign media reported that Web3 music NFT platform Sound.xyz had completed a $20 million Series A financing round in February of this year. The round was led by a16z, with participation from Sound Ventures led by singer Snoop Dogg, artist and producer Ryan Tedder, actor Ashton Kutcher, and others. The investment lineup is quite strong.

The delay in disclosing this financing information is nearly five months, indicating that Sound.xyz and its major investors are not eager to capture the early market value of this positive news, but rather are quietly improving project features and services, intending to grab a larger slice of the music NFT track.

Back in December 2021, Sound.xyz had already raised $5 million in seed funding led by a16z. It has now developed into a leader in the music NFT field. So why is Sound.xyz continuously favored by a16z and major investors? How does it play with Web3 music NFT?

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Sound.xyz Introduction

Sound.xyz is a Web3 music NFT platform that supports Ethereum and Optimism. It mainly helps creators earn income by turning music into NFTs, and listeners can also buy and sell these NFTs for profit.

According to statistics, 90% of the Web2 music industry’s traffic flows to the top 1% of artists, which means that many music creators have not been fully discovered. In addition, many artists earn only about $0.003 per song, making it difficult for many talented artists to make a living from music.

Against this background, Sound.xyz’s emergence will eliminate intermediaries in the music industry that have plundered the interests of musicians, directly connecting creators and listeners for maximum value exchange of talent and rewards.

So, as Sound.xyz puts it, Sound is a music platform without intermediaries: a set of web3 native music and economic tools that empower and give rights to the next generation of artists and their communities.

Specifically, Sound.xyz gives artists the opportunity to launch new music for the first time in the form of a set of NFTs. Each version of the NFT is uniquely numbered, so listeners can show off their early support on social platforms.

Each Sound NFT is not just a song; supporters of the song’s NFT can publicly comment on the song, but once the NFT is sold, the comment disappears and is replaced by new commenters.

Since its initial investment in 2021, Sound.xyz has recruited over 500 artists, who have earned over $5.5 million in primary sales and secondary royalties.

Features and Functions:

On Sound.xyz, songs are played for free, and users can plan their own playlists. Artists can showcase songs with a range of limited-edition NFTs, and listeners can collect them directly from creators and publicly comment on the songs they own.

Sound.xyz is open to all artists, who can release music at their chosen price, sell it directly to their personal communities, and receive immediate payment.

Normally, streaming platforms cannot allow artists to gain a deep understanding of their fan base, but on Sound.xyz, creators can see accurately who their earliest and most loyal fans are based on the information already on the chain.

In terms of revenue, Sound.xyz also has instant payment and song splitting functions, and the resulting revenue can be deposited directly into the creator’s wallet. Unlike the traditional music industry, where royalties may take months or even years to reach an account, Sound.xyz can achieve them immediately without intermediaries.

Through Sound.xyz, artists can:

· Upload songs on the chain and have creative ideas for releasing music, as well as deciding how to sort their music catalogs.

· Fully control their relationship with the audience without intermediaries, as creators are their own agents.

· Instantly, accurately, and transparently pay whenever fans collect their songs.

· Artists receive 100% of the revenue and retain 100% ownership and publishing rights.

Similarly, as music lovers on the web and mobile applications of Sound.xyz, you can:

· Discover the hottest new music works from emerging independent artists.

· Collect music to prove that you are the first to discover the next Billie Eilish.

· Leave permanent comments on collected songs to show your support to other listeners.

· Get into group chats with artists and other collectors, as well as other rewards and experiences.

· Make money by creating playlists and sharing links to your favorite songs.

Every Sound.xyz listener can be a builder of music, and fans can be rewarded for actively participating in the ecosystem by collecting music or creating playlists and seeding other listeners. Meanwhile, music enthusiasts on Sound.xyz can also be praised for discovering new music.

In addition, Sound.xyz has launched a creator editing feature that allows artists to freely edit their works after uploading them.

If creators want to edit their own music versions, they can navigate to their song page or “Your Versions”, click the ellipsis (…), and then click “Edit Version”.

Then:

↳ Change song media and details, metadata, or rewards↳ Add/remove published collaborators, or change the split percentage↳ Edit the configuration of the drop (start time, price, duration of open edition drop or fixed edition supply)

After completing the changes, check the changes and click “Update” to sign the transaction and complete the changes.

Charging mode:

Each artist (rather than the platform) sets the terms of their relationship with supporters through a unique and customizable digital project supported by smart contracts. By releasing new web3-native revenue opportunities, Sound.xyz economically enables artists to bypass traditional intermediaries and retain most of the revenue without sacrificing distribution.

On July 6th, Sound.xyz changed its platform charging mode again, and artists can receive 100% of the income generated by their music NFT issuance.

Sound.xyz has cancelled the percentage-based minting fee (5% for primary currency and 2.5% for Sound Swap), instead charging a small fixed minting fee for each transaction by the collector. That is, the platform will charge a fixed fee of 0.0007 ETH for each transaction by the collector, regardless of whether the collector mints 1 version or 100 versions. This will encourage collectors to collect multiple versions without worrying about the high cost.

For artists, this means that every dollar they earn will flow directly into their wallets.

Comparison of old and new charging models:

Old:

· 5% of the primary minting fee is borne by the artist

· Sound Swap minting fee of 2.5% is borne by the artist

New model:

· Collectors pay a fixed fee of 0.0007 ETH per transaction.

· Artists receive 100% of the revenue from their works.

· Sound no longer charges artists 5% for primary minting plants

· Starting on July 7, 2023, Sound will no longer charge a 2.5% fee for Sound Swap minting

Conclusion

In the past year or two, music NFTs have not gained as much popularity as PFP NFTs. Part of the reason is that NFT or Web3 music is still an early market and application. Most music NFT platforms tend to be e-commerce models, which makes the two core concepts of Web3 ownership and transactionability (or liquidity) of music NFTs not fully extended. And compared to pictures, music has a higher entry threshold, so it is especially important to get more fans involved in music NFTs.

Although Sound.xyz is a music distribution platform, it can be seen from the above introduction that it is striving to bring creators and collectors closer together in terms of content creation and interactive gameplay. In addition, in terms of income, the platform is also trying to minimize the costs generated in various music NFT creations and circulation, and instead striving to provide maximum value and revenue for content creators.

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