NFT Opportunities For the Music Industry
NFTs are revolutionizing the world – or at-least we like to think they are. If you have heard about blockchain, cryptocurrencies or anything of the like, you are bound to think that we are seeing a change in our outlook of art and artists.
An artist myself, I would like to think that something as simple as a token would somehow earn me the million, I am working hard to make – so I can live happily ever after. But those happily-ever-afters are best left for movies.
What they have done in the music industry seems revolutionary – although only the well-established artists have benefited from it until now. We can, however, predict a more positive future for artists with this technological innovation.
Are NFTs the breakthrough that artists needed?
Yes, they are. They give the artist the freedom to steer away from any sort of middleman and be able to connect directly with the buyer. This buyer can be anyone from a deep-pocketed collector to an incessantly hardcore fan. Because there are no middlemen involved (DSPs like Spotify or YouTube), the overall profits that the piece of music makes goes straight to the artist.
And what kind of profits are we talking about?
Millions. To put things in perspective, here are some figures.
- 3LAU made $11.6 million off of his NFTs in 24 hours
- Grimes made $5.8 million in 20 minutes
- DJ Steve Aoki made $4.2 million in the first week of March
My favorite childhood rock artist Linkin Park’s front man Mike Shinoda tweeted that his “experimental” piece had received a bid of $10,000. He highlights that he would not “get even close to $10k” if he were to publish his song on any streaming platform.
So, the profits that artists are making off selling their music bundled in NFTs is huge. But are these not well-established artists who already have a massive following and are probably earning a huge amount of money?
Yes, they are. The fact that they are so huge has given them the benefit of amassing such a huge amount in such a less period. However, that is not the point.
The point is that an artist has now found a way to earn more (or we should say a deserving amount of) money than what they do on traditional streaming platforms. And that artist could be anyone, from my favorite rapper Eminem to an upcoming musician living next door.
The passion that brings listeners and musicians closer together will now enable the listener to support their favorite musician monetarily.
Why can’t the artist just put their song on a DSP and market it?
They can. In fact, I firmly believe that artists should be able to market their music to a welcoming audience. However, do you even know how much most DSPs (most notably Spotify) pays per stream?
Presently, an artist gets a fraction of a penny per stream. To put things in perspective, here’s the per stream earning breakdown of some famous DSPs:
- Spotify – $0.0032/stream
- Apple Music – $0.0056/stream
- Google Play Music – $0.0055/stream
- Deezer – $0.00436/stream
If I am an upcoming rapper (trust me I want to become one) and I get a total of 4,000 streams from all these DSPs each month, then I earn $18.66 a month.
Now, let’s assume that out of those 1000 listeners on each platform, I have 10 listeners on each that value my music highly. If I put a certain piece on auction, then I can potentially make $500 if any of those hardcore fans are willing to pay that amount.
That is a straight 2500% increase! Now, which artist in their right mind would not want that?
Do note, however, that the expense of adding my NFT on a marketplace (a process called minting), the value of ether (the most commonly used crypto for NFT) against USD, and the marketplace fee are some factors that have been ignored here.
Still, we can safely assume that a raw and passionate artist who makes excellent music can utilize this technology and earn a decent income.
How else do NFTs benefit artists?
Artists often get embroiled in controversies about a specific term they use, or if they direct a certain section of their song against a fellow artist or organization. While creating NFTs of their music, there is no such thing as bleeping. For us true-lovers-of-explicit-lyrics, we can listen to the whole song without having to worry about how the DSP attempts to censor some of it. You may include a visual experience, such as an act, movie or even game scene in which your soundtrack plays. For example, Skrillex has made a soundtrack for video game Kingdom Hearts III and could use the game for complete audiovisual experience within NFT world.
Moreover, NFTs are not just limited to a digital piece. They can be physical like albums, merchandise, concert tickets, among others. So, the artist has real flexibility when it comes to what they want to sell.
And thanks to blockchain, the piece of music always stays untampered by any governmental/private force. Artists can rest assured that their music will always be available to whoever wants to listen to it.
Copyrighting in NFTs is a complexity
While there might be countless more benefits to these tokens, there are some intricacies that we must pay attention to. My grandfather used to say that while everything looks rosy from afar, it can be way more complex when you examine it closely.
And in this case, it is the copyright.
Before we get into specifics, we must understand one crucial point. NFTs are simply tokens that exist on a blockchain. They are not the original artwork/piece of music themselves. They can point to that work hosted on a website.
With that in mind, let’s understand how copyrighting in NFTs work. Let’s say you are an artist and want to auction your work on a marketplace (a marketplace is where NFTs are traded).
If you are already signed with a record label, then chances are that copyrights for the sound recording are managed by them. In that case, you must straight up ask them if you can even create an NFT and sell it.
If you are an independent artist on major DSPs, then you must decide the kind of rights you want to give to the “fan” who buys your music.
- Do you allow them to further sell your music commercially?
- Do you allow them to sell it off to another fan for a higher price?
- Do you stipulate that a certain number of profits gained on re-selling are directed back to you?
Why buy it for a million when you can listen to it for free?
Duh, is that not obvious? It is not so much about the experience of listening to a song, but the emotion of owning it. I will let that sink in for a while.
Many are questioning around the newly erupted space of NFTs and whether it is as beneficial as many people claim it to be. I for one believe that it is not so much about owning art, but about letting it captivate you in the most surreal ways.
When you listen to a song, you are not listening to a couple of instruments being played in harmony, but you are glancing at the world through the eyes of the artist. You are feeling what they are feeling.
I believe that notwithstanding the huge amounts of profits that people have earned by trading digital goods such as NFTs, true art has always been and always will be priceless.
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