Non-fungible tokens or NFTs have taken the world of art and music by storm. These digital tokens, which represent various types of unique assets in the digital world such as art, music, videos, and even tweets, are being sold for millions. They can be bought and sold, but do not have a tangible form.
NFTs are particularly revolutionising the way music sells. While the industry has managed to keep pace with technological advances in the field, it has struggled to strike the right balance in terms of providing fair compensation to the artists for their work. NFTs provide the perfect fix for this problem. Artists can not just expect better compensation now but also interact with their fans and release their music on their own terms.
“NFTs also enable creators to earn royalties, which are payments made to a creator, such as a musician, author, or artist, for every secondary sale made. Something that was never possible before. NFTs work as a business solution for the passion economy. Artists get to directly engage with their fans (collectors) who are invested in them and their projects,” Vishakha Singh, Vice President, Advisor, WazirX NFT Marketplace told interactive music communication portal Music Plus.
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NFTs provide undeniable proof of ownership due to blockchain technology and come with a certification of authenticity that can be validated at any time. Just like cryptocurrency tokens, NFTs are stored in a distributed ledger, making them very hard to tamper with. Through NFTs, artists can claim complete ownership of their music without sharing profits with middlemen like music labels, lawyers, or agencies.
As the NFT tokens are kept in a distributed ledger, artists can efficiently distribute their music to fans. For example, in March, the band 'Kings of Leon' released three types of tokens as part of a series called "NFT Yourself". The first type was an album package, the second type offered live show benefits like front-row seats for life, and the third type was just for exclusive audiovisual art.
Fans could use cryptocurrency to pay for these NFTs, all in a safe online infrastructure.
NFTs are particularly beneficial to independent artists who are not backed by any music labels or brands. This is because NFTs give the artist 100% ownership of the art and a robust way to distribute it. Artists also do not have to stick to the rules of streaming platforms as they can release their music to the masses independently.
Among other things, artists can bundle concert tickets, special access performances, limited edition albums, and shows in NFT tokens. This can create a sense of exclusivity for the fans who purchase them and allow them to interact with the artist uniquely, making the bond stronger between a fan and the artist.
“Our view is that after art, music has the biggest space in terms of what it is and where it could be in India. We expect the sales to increase tenfold in the next 2-3 months,” Dhruv Saxena, Chief Strategy Officer, Vistas Media Capital the principal shareholder of the NFT trading platform, Fantico told Music Plus.
An interesting aspect of NFTs in the music industry is that artists can use them in stock-like distributed layouts. For example, an artist can sell 10% of the rights of their albums as NFTs to fans or any other entity they choose. This means fans who have a stake in the NFT can earn a cut from the album's sales.
The big bucks
Many musicians have welcomed the advent of NFTs with open arms. Over the last year, music NFTs have gone mainstream. Many artists, including Portugal The Man, Grimes, Shawn Mendes, and Linkin Park's Mike Shinoda, have earned huge revenue through the NFT marketplace.
DJ and music producer 3LAU sold music NFTs worth $11.6 million in less than 24 hours. EDM DJ Steve Aoki made $4.2 million in March of this year selling NFTs, while Grimes, musical artist and former significant other of tech mogul Elon Musk, sold NFTs worth $20 million in less than 20 minutes.
However, Saxena of Vista Media pointed out, NFTs are not mass selling products. "We are at a stage now where everyone is trying to figure out the best way to monetise through NFTs while keeping in mind all the legal aspects if attached. NFTs fall under the purview of the Copyright Act of India just like other music-related products."
While there is surely an excitement about it, the composers, artists, labels, distributors all are all still figuring out the content they can legally sell, lease or reproduce and package as NFTs, he noted.
(Edited by : Abhishek Jha)
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