Tue. Sep 26th, 2023

Non-fungible tokens (NFTs) soared in popularity in 2021 and the first few months of the following year. A wide range of commodities, from digital art to event tickets to real-world luxury goods, can now be recorded using NFTs, which are digital tokens stored on a blockchain.

These are some startling figures: In comparison to the $95 million in NFT sales in 2020, the total amount of NFT sales in 2021 was $25 billion. Opensea, the well-known peer-to-peer marketplace for NFT, has already seen record-breaking daily sales in 2022.

There is a large range of sectors that could be disrupted by NFTs. NFTs are expected to have a significant impact on the future of music, according to many experts. NFTs include anything from songs to albums to lyrics to soundbites. When Kings of Leon released their debut NFT album last year, it was groundbreaking. Even digital art in jpg or gif format can be merged with music to create original works of art with music interwoven. When it comes to combining music and art with an emphasis on mental health, Lostboy NFT is an excellent example. Music-related NFTs can be displayed differently depending on how they are accessed thanks to smart NFTs that accept several formats. NFTs can include a PDF document that provides lyrics to a song or a message from a performer, which would be displayed when viewed in a text-based format.

Taking a closer look at what NFTs are capable of, it appears that NFTs will have a significant impact on music in the future.

Making it possible for fair Remuneration to be Distributed.

Musicians have not been fairly compensated for their work for a long time now. In the music industry, this has been particularly evident. According to Fortune, the normal total revenue split is 50/50—with just 50 percent of revenue going to the entertainer and the rest being split among agents, lawyers, and distributors. Musicians who use streaming platforms to share their work face an even more bleaker scenario. More than 80% of Spotify’s top 0.8 percent of artists make less than $50,000 a year from streaming earnings.

It is possible that NFTs will help to ensure that musicians receive a better wage for their job. Anecdotally, Linkin Park’s Mike Shinoda, who raised roughly $11,000 for his first NFT, is a great example: Shinoda tweeted, “With NFTs, we can allow the early figures to speak for themselves.” Even if I upload the complete version of the contained music to DSPs globally (which I can still do), after costs by DSPs, label, marketing, etc., I will never collect even close to $10k.

Edited with the assistance of Amy Danise

In order for musicians to be appropriately compensated for their work, the secondary, tertiary, and higher-order markets for NFTs present a significant opportunity. Today, creators frequently give up ownership of platforms when signing contracts, making it impossible to keep track of where their work is ultimately shared. According to The Verge, an artist who was signed to a prominent indie label was due up to $40,000 in song royalties.

When it comes to distributing content via NFT platforms, musicians and other producers don’t have to give up ownership of their property from the start. While individuals have the option to give up ownership of a song or album when they mint an NFT, they can also keep it if they bake the NFT instead of minting it. As a result, when music is sold, musicians receive a more equitable and direct payment. NFT owners who chose to resell the NFT will automatically earn royalties from the original creator each time the NFT is sold, and this process can continue. It’s all thanks to the fact that the NFT’s metadata includes a record of ownership.

Enabling more collaborations and Remixes to Take Place

The music and entertainment sectors have seen an increase in the frequency of collaborations during the last decade. In today’s mainstream culture, collaborations between artists have become commonplace. When two or more entertainers collaborate in fresh and inventive ways, there’s a compelling draw.

New and intriguing collaborations have already been supported by NFT. A new NFT collection from Grammy-nominated DJ Steve Aoki and digital artist Maciej Kuciara is out now. Digital artists have a new canvas in the form of NFTs, which “enable a whole new generation of artists to interact with talent from diverse professions and make a lasting emotional impact on the viewer,” says Kuciara. NFTs allow musicians to incorporate a royalty-collection system within their NFTs, making collaborations more lucrative.

Remixes are a close cousin of collabs. NFTs can also take use of the growing “remix” culture, which encourages the combination or modification of content to make new creative, derivative material. Remixes are often referred to as “fan edits,” which are remixed versions of music, films, or other works of art that have been altered by fans in order to produce something new.

Using “upgradeable NFTs,” musicians and other producers can encourage remixes in ways that profit them. Because they don’t require intermediaries and allow for the development of exclusive content like remixes and collaborations, upgradeable NFTs provide for more efficient music distribution without the legal pitfalls that sometimes accompany traditional methods.

It is possible for NFTs to evolve and mutate over time with upgradeable NFTs. Remixers and fans can lawfully build on top of a soundtrack or a chorus or a bridge that a musician has released, circumventing the costly legal processes that are normally involved in generating remixes. Upgradeable NFTs allow the original author to retain control and even benefit from the spin-off product.

Using scarcity as a Selling Point

Robert Cialdini, a renowned psychologist, is one of the foremost researchers in the field of influence tactics. In his famous “six principles of influence,” Cialdini included the concept of scarcity. Cialdini’s research shows that products are perceived to be more desirable when they are scarcely available. In the music industry, scarcity has a long history of bringing in big money because of its rarity. Fan experiences, including as backstage access, fan clubs, autographed memorabilia, and other souvenirs, are vital to the music business.

On one hand, NFTs allow musicians to benefit on scarcity in new ways; on the other, fans can take advantage of new possibilities to engage with their favourite musicians. Consider the following query, which was asked as part of a Variety poll: “The year is 2022. For a movie you’ve always wanted to see, the studio releases an NFT. Only 1,000 of this NFT are available for purchase. What are your expectations for the price range?

Respondents estimated a price range of $1,000 or above in 20 percent of the cases. Having access to limited-edition material can be exhilarating and alluring.

With NFTs, scarcity-based arguments are endless. When you buy a concert ticket, Live Nation, the world’s largest music promoter, will give you a complimentary National Football League (NFL) ticket in the form of “Live Stubs.” “Our Live Stubs product brings back the nostalgia of collecting ticket stubs while also giving artists a new tool to deepen that relationship with their fans and we can’t wait to see what the creativity of this community dreams up as it grows,” said Michael Rapino, President and CEO of Live Nation Entertainment. In the long run, rare collector NFTs like Live Stubs and comparable items can rise in value and be sold lawfully.

With the help of NFTs, there has been an increase in the use of scarcity in the music industry. Mendes teamed with avatar tech startup, Genies to launch his own NFT with the help of a Canadian vocalist. Among the NFT’s unique digital editions were his Fender guitar and gold ring, both of which were released on OpenSea.

NFTs are powering the music industry’s future

In other words, NFTs aren’t just another fad. In terms of value propositions, NFTs appear to be set to revolutionise the music industry by offering more equitable compensation, more collaboration and remix opportunities, and time-tested appeals to scarcity. In order for NFTs to succeed, they will need to constantly re-invent themselves and evolve artistically, much like the musicians they are sponsoring.

By Adam

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