NFTs Are Music Industry’s Latest Big Hit

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After a year with no live performances, musicians are hoping to connect with their fans on the blockchain and make up for lost revenue by selling them nonfungible tokens.

Electronic-music artist Justin Blau, known as 3LAU, has fetched $17 million in the past month from NFTs, helped in part by a tokenized release of his three-year-old album “Ultraviolet,” which grossed $11.6 million and briefly held the record for the highest price paid for a single NFT, $3.6 million. (A record since broken by the artist Beeple.)

“It’s a way to monetize your fan base in a way that’s never been possible,” said Mr. Blau, who doesn’t expect the exorbitant prices to last. “I think this technology will definitely change the world, but I’m cautiously optimistic because no one really knows how to value this stuff.”

NFTs, digital collectibles that are authenticated or “minted” using blockchain technology and purchased with cryptocurrencies, have burst into the worlds of art, sports and sneakers. The frenzied new market has excited musicians, who have auctioned off digital art, music, merchandise, tickets and experiences for hundreds to millions of dollars.

So far, most buyers are crypto-savvy speculators helping send prices soaring. The music business is hoping the market will develop for real fan participation—at fan-accessible valuations.

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