How NFTs Could Change the Music Industry
If you’ve been doing your best to ignore all of this crypto fuss, it’s probably time you started paying attention. At this point, your favorite musician probably knows this stuff better than you do.
The Grammy Awards announced this week that next year’s show would be commemorated with, what else, a series of non-fungible tokens. A staple in the crypto world, NFTs can take just about anything: original tweets, video game features, basketball cards. But they are more often than not a combination of digital art and digital receipt – the seller’s proof of a digital item that the buyer is the only genuine owner or one of a limited number of genuine owners. NFTs allow creators of digital items to make these digital items rare and therefore more valuable.
There is no sign yet of what exactly the NFT Grammys will look like or how much they will cost. Musical blockbuster Quincy Jones is behind OneOf, the company in partnership with the Grammys to create them. A taste could be rapper Doja Cat’s recently released âCrystal Tokenâ on OneOf, seen below. It sold for $ 188,000.
The Grammys’ NFT announcement is the latest example of how the technology behind the new world of crypto is influencing how musicians make their money … for better or for worse.
The game of souvenirs and goods
Steve Aoki is one of the most famous EDM DJs on the planet. If you are unfamiliar with EDM, it means electronic dance musicâ¦ ask your kids about it. Or just ask that annoying coworker who won’t shut up about Burning Man.
Like most other musicians, Aoki experienced some unexpected downtime in 2020. The pandemic has ended the endless stream of live entertainment that was his life, not to mention his biggest source of income.
So Aoki did what a lot of people did during the lockdown: he went into collectibles.
âI got, like, the Michael Jordan rookie card for $ 85,000. I have two,â Aoki said.
Not a cheap hobby. But around the same time, Aoki was starting to sell his own collectibles. He collaborated with an Italian digital artist to create a series called “The Dream Catcher”, a multimedia art and music mashup.
Art is subjective. One person’s “Dream Catcher” series is another person’s Van Gogh. And the series “Dream Catcher” reached a Van Gogh price – $ 4 million in sales.
âThe same way people buy the jerseys of their favorite athletes, or buy PokÃ©mon, no matter what they collect. Now music is another huge collectable industry, âAoki said.
In a world where musicians earn less than a dime per Spotify stream and where live touring may disappear with the upcoming COVID-19 lockdown, Aoki sees digital memories as an important new revenue stream.
OneOf, the Quincy Jones company, hopes to convert music fans into more crypto-savvy consumers by making NFTs slightly cheaper. Think merchandise – a digital replacement for a t-shirt or concert poster as opposed to one-of-a-kind art that only the ultra-rich can afford.
âIt’s our ambition to bring so many of these fans to the blockchain, and to do so for the very first time,â said Adam Fell, co-founder of OneOf. âWe don’t necessarily think this is about trying to convert them into blockchain supporters. They come and buy digital products because they are fans of the artist.
Writing rights play
Of all musical genres, EDM probably has the most musicians turned crypto evangelists.
âWhen you release an electronic record that you put on Spotify or iTunes, if it’s not a worldwide hit, you don’t make any real money,â said Alesso, a Swedish DJ who released his own NFT series. “[Crypto] could save a lot of people’s careers, earn money on their own art.
Alesso highlights what one of his contemporaries did – Justin Blau, who goes by the stage name 3lau.
Last month, Blau ceded 50% of the streaming rights to their song “Worst Case” to 333 fans. Through NFTs, these fans will receive a reduction in royalties every time someone plays “Worst Case” on Spotify, Apple Music or another streaming service. Leading venture capital firms have invested in Blau’s âRoyalâ, a platform that hopes to be a marketplace for fans to buy music rights through NFTs.
Steve Stewart is the CEO of Vezt, an app that allows users to buy fractional music rights shares, much like owning a share. He said the artists’ model of giving equity in their songs to fans is mutually beneficial.
âWhen you see Justin Bieber say, ‘My new album is going to come out, everyone is putting it out as much as you can,’ imagine if he had instigated his fans with some ownership, with the ability to share those profits,â he said. said Stewart.
Vezt is not yet using blockchain technology, but the company is experimenting with it. Going forward, Stewart predicts that NFTs will allow music rights holders to be compensated in near real time, whenever a song is played, anywhere.
“[NFT]s allow a song to be valued, followed and monetized, âsaid Stewart. âSo you can tell this song was played in a bar in Berlin, it’s worth 10 cents, and this song is broken down by these owners. This money can be remunerated quickly. I mean, there’s no reason it can’t be done in near real time.
The wrong side
Nika Roza Danilova has been making pop music with industrial overtones under the stage name Zola Jesus for over a decade.
When live touring dried up, she experimented with creating her own NFTs – digital self-portraits with original soundtracks.
âI saw that it could be a multimedia art form, something that I could play with and extend my skills to something more audiovisual,â Danilova said. “The absence of limitations was very exciting.”
Danilova sold two NFTs and made some money. But the rapid speculation she saw in the NFT music space – with tokens sold for millions of dollars to what she saw as wealthy people more interested in NFTs than art – got her. left a bitter taste in the mouth.
âThey weren’t sold for the quality of the art or the intent of the art,â she said. âThey were sold like banks or miniature stocks. It didn’t really look like a decentralized financial system.
At the same time, she was partly relieved that it wasn’t her fans who bought her NFTs; instead, the buyers were NFT collectors. She’s worried about presenting her fans with a risky asset class.
Danilova knows how difficult it is to make money as a musician. And she sees the appeal of new technologies that would allow fans to buy music rights and directly fund smaller artists like her. No more big and bad record companies and other intermediaries putting financial pressure on musicians.
But the idea of ââturning his fans into investors just doesn’t suit him.
âWhen you own the rights, you are involved in the success or failure of the music,â Danilova said. âYou have a particular interest in music, not just emotionally or metaphorically. It is literally a financial investment. And at this point, when finances are involved, there are expectations involved. ”