NFTS AND MUSIC – A MATCH MADE IN (CRYPTO) HEAVEN
NFTs – new and confusing and possibly the best thing that could happen to musicians. If you haven’t already, it’s your turn to reap the benefits and take advantage of a fad that’s here to stay. If you don’t have the faintest idea where to start, we’ve got you covered.
A Crash Course
What are NFTs?
As simply as we can put it, NFTs are digital tokens (such as a photo, video, or song experience, etc.), linked to tangible (physical asset) or intangible (non-physical asset) value.
The non-fungible part means that they are unique and cannot be directly exchanged with one another. Think of it as festival tickets: each ticket contains specific information, including the purchaser’s name, the date of the event and the venue. This data makes it impossible for festival tickets to be traded with one another.
How do they work?
Let’s strip this down for a second to understand the basics: most NFTs are part of the Ethereum blockchain. Ethereum is a technology that lets you send cryptocurrency to anyone for a small fee. Cryptography is the technique used to protect the privacy of a message by transforming it into a form that can be understood only by the intended recipients.
Now, back to the question: an NFT is worth what you are willing to pay for it (more about this below). When you pay for an NFT, as Dragan Boscovic puts it, “what you get is the right to transfer the token to your digital wallet. The token proves that your copy of a digital file is the original, like owning an original painting. And just as masterpiece paintings can be copied and distributed as inexpensive posters, anyone can have a digital copy of your NFT.”
In other words, anyone can buy a Monet print. But only one person can own the original.
So, now to the fundamental question:
How much are they worth?
Kings of Leon made recent history by becoming the first band to release an album as an NFT. Following King of Leon’s footsteps, other artists are also getting into the game. At the end of February, Grimes sold ten pieces of digital artwork as NFTs for $6m, while The Weeknd generated $2.2m by selling digital artworks with clips of a new track.
In the physical world, supply and demand are the key market drivers for an item’s price. NFTs are scarce– due to this, people are often prepared to pay a pretty penny for them.
Why are musicians getting into crypto?
Josh Katz, founder and CEO of YellowHeart (the company behind the development of smart contracts and intelligence within the tokens offered by Kings of Leon), puts it best: “Music has become great at selling everything except music.” In his words, streaming’s subscription-based pro-rata model irreparably hurts artists, and NFTs will make modern fans want to own music again.
So what’s all the hype about?
And as an artist, you’re profiting on the economics of virality and attention.
When it comes to royalties, nobody knows more about them than musicians–it’s often how they pay the more significant portion of their rent. NFTs can be designed to work under a similar “ongoing royalty” scheme. The creators receive a cryptocurrency fee every time the NFT changes hands (another attractive alternative is that each buyer can also share a percentage of all digital royalty streams generated).
This is a great deal, especially because NFTs are expected to increase in value over time.
Moreover, NFT can also be set at a maximum resell price, eradicating scalpers.
For the artists, NFTs bypass streaming and traditional download markets and put the money straight into the bands’ pockets, which is a major draw at a time when large gigs still seem a way off and streaming services pay worse than a week’s work experience at Amazon. – Mark Beaumont
Why should you create your own NFT?
We touched on this before, but it’s worth reiterating that the current streaming model pays everyone a fraction of a penny per stream. For the big artists whose songs generate an enormous number of streams, it’s a model that works. For the artists with a smaller niche, it doesn’t work.
As a musician, NFTs can help elevate your vocation by “directly connecting artists to their fans, creating meaningful communities around art and allowing musicians to take control of their music and make a living without having to be part of the music industry complex.”
More than just the money, artists are gaining a new perspective, one which reveals that “there is a massive gulf in our culture between the value music brings to people’s lives and the price they currently pay for it”.
They may not be the solution, but NFTs are indeed offering a way to empower artists. As Mikel Jollet puts it, the music industry of the past may not have been built for [us]. But the music platforms of the future could be.
Use NFTs Through Social Media
Reddit recently announced that this summer, it would be launching its own digital token for two subreddits, r/Cryptocurrency and r/FortNiteBR. Users of these two groups (currently a combined 2.4 million members) will earn tokens for things like posting a comment.
What does this mean for you?
It means that NFTs have opened up new ways of brand storytelling and consumer interaction, adding an extra layer to what you can do to develop your online presence.
Let us elaborate: instead of just gaining an audience, you could start earning money for it too.
A newcomer to the market is BitClout; the new Crypto Social Network built to allow everyone to monetise their online presence and become a valuable influencer on the internet.
In other words, people can buy and sell tokens entirely based on a person’s — mostly a celeb or influencer’s — reputation. On the website, NTFs are known as Creator Coins, and their value relies entirely on the celebrity’s popularity (so the value can rise or fall).
So you could get fans to support you by buying your coin or token.
Although still in early developments, Bitclout appears promising enough because it seems to value ideas and personalised rewards more than the traditional ways some people get followers.
NFTs seemed to have popped out of thin air and exploded all over the internet. But they are the future and with good reason. Connecting with fans while simultaneously being rewarded for your work is the dream that record deals should, but don’t always, provide. The world of cryptocurrency is difficult to navigate, but it’s the future and, so far, a promising one.