Over the years, the music industry has undergone numerous changes. The art of listening to music has changed from records, tapes, cassettes, track tapes, and compact discs in the 20th century to downloadable streaming platforms (DSP).
The music industry is now reliant on DSPs (digital signal processors), and despite the ease of access and low-cost benefits for fans, artists are still losing money. Most musicians still don’t make enough money from their music, with tours, merchandise sales, and partnerships being the primary source of income. Does this raise the question of whether we’re due for another upgrade? NFTs might be the answer.
WTF is a Music NFT?
Although many people identify NFTs with digital photographs sold as blockchain-based assets, NFTs can be used in various ways. Music NFTs are one of the fastest-growing ecosystems in the NFT business.
On the surface, music NFTs appear to be a blockchain-based alternative to purchasing music from iTunes. Music NFTs allow anyone to listen to tracks while granting ownership through an NFT. When you buy a track on iTunes, you are just purchasing the right to listen to it. On iTunes, you don’t own anything; you just have a license to listen to what you’ve paid for.
If you have already heard the music, why spend money on it? The answer is the same as purchasing JPEGs, which anyone can right-click and save. Provably unique and original assets have value in the marketplace and among individuals. For some, such value may come from a closer relationship with a favorite artist. Some may be interested in gaining financial exposure to an artist they believe will succeed. The value of the music NFT they’ve invested in could climb if the musician becomes successful.
Music NFTs have a wide range of potential applications. Artists can use NFTs to access particular sections during concerts, discounted concert tickets, or meetups with the artist. It depends on how the artist wants their NFTs structured. Music NFTs like JPG NFTs don’t grant buyers any royalty or copyright rights unless specified.
How do Music NFTs work?
NFTs are one-of-a-kind assets stored and traded on a blockchain. They are unchangeable, limited, and publically verifiable. Artists in the music industry can sell restricted digital content to their followers and create any non-counterfeit-able music content.
What does a partnership between NFT and Music aim to solve?
● Exclusive Album releases: 3LAU, a well-known American singer, sold his tokenized album for more than $11 million in February 2021. Although this sales amount is an aberration, other artists can learn from the move. On-chain sales of limited copies, an artist can create exclusive content in a fun way. Furthermore, every secondary sale of the NFTs earns the artists a portion.
● Outsell the competition: The production world now has the opportunity to outsell the competition by selling beats directly to buyers. Because NFTs are immutable, end-users can buy these beats on-chain and use them immediately or store them for resale profit. Every resale earns the music producer a royalty.
● Sales of merch: On-chain merch, both virtual and actual, is possible. They are available for purchase and resale by anyone. Artists also get a percentage of all secondary sales, as is customary.
● Layout for stock-type distribution: This is another way NFTs can aid the music industry, albeit it has yet to be shown. Consider an artist selling 20% of their forthcoming album’s rights as NFTs. In addition to on-chain money, fans who own NFTs will receive a portion of off-chain revenue from their music, such as streaming, TV collaborations, and retail sales. Consider it a tokenized stock certificate that confers album ownership rights. In this manner, the artist is given the opportunity to create an ecosystem around their work that benefits both the artists and their committed followers. Holders also have access to exclusive benefits such as front-row seats, special concerts, listening parties, and more.
Although the NFT field is still relatively young, it is unclear how labels, music industry techs, and companies will level up. However, they have potential.
UniqArt aims to provide a space where artists can connect with their fans in more than one way. Join us on this journey and create an open and fun space for your music and fans!
(written by Catherine S Thomas)