Grimes’ Nifty Gateway drop on March 1st generated a headline-grabbing $5.8 million worth of NFT sales in less than 20 minutes. Immediately the traditional music business sat up and took notice, with Rolling Stone Magazine declaring; ‘Music NFTs Have Gone Mainstream. Who’s In?’
Predictably a whole bunch of “Celeb Musicians” followed in Grimes’ wake, including Halsey, Calvin Harris, Diplo, The Weeknd, and Snoop Dogg all desperate for a slice of the NFT action. Yet surprisingly, there have been very few headlines since, and in reviewing subsequent musician drops, it’s notable that sales volumes have been decidedly lacklustre; BIG brand musicians are failing to translate NFT sales into BIG bucks.
So what went wrong?
When you look beyond Grimes’ primary sales, it’s clear that all is not well. Her Nifty Gateway (NG) primary sales were phenomenal, but secondary sales significantly poor, falling outside of NG’s top 100 secondary market sales. Even more startling, is the price depreciation experienced by the two open editions ‘Earth’ & ‘Mars’. Both NFTs sold for $7.5k at the drop, but prices have since fallen-off-a-cliff and are now limping along, struggling for sales at $2.7k. Put simply if you’d bought a Grimes open edition at the drop and sold it 30 days later, you’d be facing a net loss (after fees) of $5k.
And this is not an NG platform issue or fully reflective of a broad market downtrend either. In comparison if you’d bought OG artist Trevor Jones’ Bitcoin Angel open edition NFT in the same week (as the Grimes drop) you could sell it today for a net profit of $2.2k
Secondary market price decline is also evident in all Celeb Musician NFTs with Halsey and Diplo open editions down 50% or more from their primary selling prices. This in turn is affecting sales volumes of each new celeb drop, because the market understandably starts to view them with caution. E.g. Calvin Harris, the “superstar DJ” with 9.7million Instagram followers, sold just 231 of his cheapest open editions. Compare this to OG artist XCOPY who has 16k Twitter followers and sold four times as many NFTs at the same price.
The exception to all this is 3LAU, a musician who has enjoyed a successful collaboration alongside visual artist Slime Sunday as SSX3LAU. SSX3LAU’s FACES Open Edition is currently flying high, topping the NG chart for secondary sales. So what can celeb musicians learn from SSX3LAU’s success?
Secrets of Success
Arguably the single, biggest driver to SSX3LAU’s success has been the acceptance of their collaboration as a trusted and engaged name within the NFT space. Their involvement in the space has been the result of hard work and effort over time and continuous engagement with their audience. Simply demonstrating engagement to the community and commitment to collectors that they’re in it for the long game should be seen as an essential first step for any musician entering the space. Specifically, Twitter is ideal for engaging with the community in general, while Discord is the popular choice for projects and more recently, artists; artist Trevor Jones recently setup a discord channel to engage with his collectors and fans, with locked “VIP lounges” for verified holders of his NFTs offering occasional giveaways.
Another effective way that SSX3LAU have been successful in this space is by using innovative ways to create value for collectors. The artist Mad Dog Jones was one of the first artists to pioneer “burn” mechanics – a process where NFT holders can “burn” (or destroy) a number of the open editions they hold in return for another NFT; the theory being that this should create more scarcity for current owners and drive up prices. SSX3LAU recently announced a similar 6-for-1 “burn” – where 6 editions of their open edition ‘Faces’ can be exchanged for a limited edition NFT. Following the announcement on Twitter, secondary market prices of ‘Faces’ shot up.
Finally, but perhaps most importantly, the current NFT space is – contrary to most newcomers expectations – not new, but born out of the Crypto Art movement; a space dominated by (and focused on) visual artists. To date, Celeb musicians attempting to sell NFTs have either missed this point by failing to partnering with an artist who has proven engagement and success in the space or ironically are too focused on the visual piece entirely and diverted attention from what they do best; the music. Where SSX3LAU offered a full unreleased track, Grimes’ work was a 30 second snippet of music.
Crossing the divide
It’s evident that Celeb Musicians are coming into what is primarily a visual art space, expecting their mega-brand and multi-million dollar music sales to directly translate into NFT sales. The reality is that their existing brand counts for very little in the NFT world and will continue to do so until the floodgates open and their traditional fan-base follows. For now, if they wish to be successful, they need to put the time and hard work in, to generate demand by forging strong collaborative partnerships, engaging meaningfully with the space and planning on how to add value for collectors. Failure to do this carries a huge risk. If the market views their drop as just another “cash grab”, then their NFTs could follow a similar price trajectory to Grimes’ open editions… and die a slow and painful death on the secondary market.