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Are NFTs the future of the music industry?
NFTs or non-fungible tokens are gaining wild popularity nowadays. A landmark digital artwork by Beeple was sold for $69.3 million some days back as NFT through a global auction. Beeple’s NFT consisted of 5000 unique digital images produced every day for approximately 13+ years and the historical value of the art was undeniable. Truly exciting! NFTs are getting wonderful investor attention as the asset’s ownership and authenticity is verifiable on the blockchain. Digital art can be easily copied endless times but the digital signature of NFT makes it very unique. The collectors are liking the concept of verifiable scarcity and the NFT market is growing like a rocket. The trading of NFTs began in 2017 as a blockchain experiment but we saw surging demand in 2021. Monthly sales on NFT marketplace OpenSea hit an astonishing figure of $95.2 million in February, up from January’s $8 million. According to NFT trade data aggregator NonFungible.com, total NFT trading volumes on the Ethereum blockchain has exceeded $400 million. NFT is not necessarily only digital art. Videos, music, text, or even tweets can be turned into NFTs.
It is evident that NFTs are defining a new ownership pattern. Digital artists are being able to sell their arts globally over the blockchain without taking help from an intermediary. The music industry is also taking immediate benefit from the NFTs. With the advancement of digital platforms like YouTube, Spotify, etc. the music industry has really become global like never before. The online platforms have provided the upcoming musicians the opportunity to produce music but the monetization model is dependent on the intermediaries. These platforms really pay peanuts to the creators in comparison to the profit earned. The big music labels and recording companies control the market heavily and without their support, a musician finds it very difficult to connect with the fans or sell their work. This is the reason, NFTs are extremely useful for musicians.
This month, Kings of Leon became the first band in history to release their new album, titled ‘When You See Yourself’, in the form of NFT. The band dropped a few NFTs as part of a series called ‘NFT Yourself’ and made a cool NFT sales of $2 million. These NFTs were basically bundles of MP3 music files and an animated image of the cover art. Six golden tickets were also released by the band. These tickets were designed to give front-row seats for life to the fans and the right to meet and greet the band. One golden ticket was sold for 89 ETH! This NFT sale process introduced a new idea of minting as many NFTs of ‘When You See Yourself’ till the closing of the time window rather than offering a pre-decided quantity. The band is supposed to donate $600,000 from the NFT sales to the music fraternity affected by COVID-19. YellowHeart, a blockchain-based ticketing platform, handled the auction process on NFT marketplace OpenSea on behalf of the band. A successful mainstream music band’s NFT launch is quite significant but the auction process wasn’t easy. The fans of the band found it difficult to adapt to NFTs as the majority didn’t have any idea about cryptocurrency. The sales process was extended beyond the deadline due to this but ultimately the fans were happy to become collectors of items from a finite and scarce pool. So what about the common music lovers? They can enjoy ‘When You See Yourself’ on all popular streaming platforms like Youtube, Spotify, or Apple Music.
The Russian punk feminist group Pussy Riot revealed about the release of four NFTs to support a cause some days back. Mike Shinoda, a member of Linkin Park recently raised $30,000 by auctioning a small teaser of an unreleased song recently. Creative studio, a record label company, partnered with NFT marketplace Zora for auctioning an original NFT work created by a group of visual artists and musicians at the beginning of this month. Warner Music Group is also a supporter of NFTs. Long back in 2019, WMG’s Innovation and Emerging Technology department invested in Dapper Labs, the makers of CryptoKitties, and WMG is supposedly working on some secret NFT products. Everyone wants to ride with the tide. Very simple!
NFTs are really giving the musicians a new way of generating revenue. According to Water & Music, NFT music industry volume was $22 million in February and we can assume that this is the beginning. Blockchain technology is evolving fast and new creative approaches will appear too. The art industry has accepted NFTs with an open heart and the music industry is bound to embrace it. The scope of NFTs in the music industry can be – a preview of a new song, ticket sale of concerts, lifetime fan club membership, digital art covers of albums, and many more. The fans want to be super fans and NFTs can really bridge the gap. Will NFTs kill the music labels? That’s not expected realistically. The music labels are also becoming interested in NFTs as it is a great way to protect their intellectual property rights.
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