Non-fungible tokens or NFTs have taken the art and music world by storm. These digital tokens, which represent various types of unique assets in the digital world such as art, music, videos and even tweets, sell in the millions. They can be bought and sold, but have no tangible form.
“NFTs also allow creators to collect royalties, which are payments made to a creator, such as a musician, author or artist, for each secondary sale made. Something that was never possible before. NFTs work as a business solution for the passion economy. Artists can engage directly with their fans (collectors) who are invested in them and their projects, ”said Vishakha Singh, vice president, advisor, WazirX NFT Marketplace, to the interactive music communication portal Music Plus.
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NFTs provide undeniable proof of ownership through blockchain technology and come with a certification of authenticity that can be validated at any time. Much like cryptocurrency tokens, NFTs are stored in a distributed ledger, making them very difficult to forge. Through NFTs, artists can claim full ownership of their music without sharing the profits with intermediaries such as music labels, lawyers or agencies.
As NFT tokens are kept in a distributed ledger, artists can efficiently distribute their music to fans. For example, in March, the group “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 performance perks like lifetime front row seats, and the third type was for exclusive audiovisual art only.
Fans could use cryptocurrency to pay for these NFTs, all in a secure online infrastructure.
NFTs are particularly beneficial for independent artists who are not backed by any label or music brand. This is because NFTs give the artist 100% ownership of the art and a solid way to distribute it. Artists also do not have to follow the rules of streaming platforms as they can broadcast their music to the general public independently.
Among other things, artists can bundle concert tickets, special access performances, limited edition albums, and NFT token shows. This can create a feeling of exclusivity for the fans who buy them and allow them to interact with the artist in a unique way, thus strengthening the bond between a fan and the artist.
“Our point of view is that after art, music has the greatest space in terms of what it is and where it could be in India. We expect sales to increase tenfold over the next 2-3 months, ”Fantico told Music Plus, Dhruv Saxena, chief strategy officer of Vistas Media Capital, the largest shareholder of the NFT trading platform.
An interesting aspect of NFTs in the music industry is that artists can use them in distributed, stock-like layouts. For example, an artist can sell 10% of the rights of his albums in NFT to fans or to any other entity of his choice. This means that fans who have a stake in the NFT can earn a share of the album’s sales.
The big money
Many musicians have welcomed the advent of NFTs with open arms. Over the past year, musical NFTs have become widespread. Many artists including Portugal The Man, Grimes, Shawn Mendes and Mike Shinoda of Linkin Park have generated huge revenues through the NFT Marketplace.
DJ and music producer 3LAU sold musical NFTs worth $ 11.6 million in less than 24 hours. EDM DJ Steve Aoki made $ 4.2 million in March this year selling NFTs, while Grimes, music artist and former partner of tech mogul Elon Musk, sold NFTs worth $ 20. million dollars in less than 20 minutes.
However, Vista Media’s Saxena pointed out, NFTs are not mass-market products. “We are now at a stage where everyone is trying to find the best way to monetize through NFTs while keeping all the legalities in mind if they are attached. NFTs fall under Indian copyright law just like other music related products. . “
While there is surely enthusiasm about it, composers, artists, labels, distributors are all still figuring out what content they can legally sell, rent or reproduce and package as NFT, a t he noted.