What are NFTs?
Non-Fungible Tokens or NFTs are like a Certificate of Authenticity for a digital file.
Basically, they act as a stamp on any type of file (audio, video, etc.) to make it unique. Since that given file is unique, it acquires a certain value that mostly depends on the reputation of the issuer. The technology that helps ensure the authenticity of an NFT is the ‘blockchain’, the exact same place that powers and secures cryptocurrencies.
Initially popular in the field of visual arts, NFTs are now of interest to a growing number of players in the music industry, who are now able to exchange songs, music videos, collector items and live show tickets. Everyone covets the millions, if not the billions, simmering in this fertile ground that is simultaneously promising and controversial.
UPDATE (NOV 12.)
UMG’s next-gen label 10:22PM forms 𝐊𝐈𝐍𝐆𝐒𝐇𝐈𝐏.
— Anto Dotcom ❁ (@dotcomanto) November 11, 2021
The First-Ever Band of the Metaverse Consisting of #NFT Characters from Bored Ape Yacht Club. 🐒 #BAYC congrats! pic.twitter.com/UDGvvw8km2
A window of hope for all artists suffering from low streaming revenues, NFTs are gaining significant momentum in a record-short timespan. With virtual reality and artificial intelligence techniques only expanding the possibilities for creating rich and immersive digital experiences, the use of NFTs offers endless possibilities for artists and music industry professionals.
An essential factor to understand is that it is the market that determines the value of an NFT, meaning that if demand increases, the price of a given NFT will subsequently increase as well.
By the way, our first blog about NFT music marketing was a homerun – (back in March)! We had more than 50000 reads in less than 90 days! Check it out if you have time to read.
For artists, this means that when fans buy your NFTs, they are actually investing in your music project. As your popularity increases, so will the value of your NFTs.
In practical terms, this means that if a not-so-popular artist sells X copies of an exclusive release for X amount of money, and becomes famous in a few years, he will not get any commission when his works will be sold much more expensive in the future. With NFTs and all the technological/technical possibilities it offers, it is possible to envision a system where the artist would get a percentage when his work is re-sold later, at a much more expensive price due to his skyrocketed fame, allowing the creator to receive a share of the sale price at each transaction.
Since the phenomenon of NFTs is relatively recent, there are still lots of unaddressed issues regarding regulations and rules surrounding the purchase of NFts, with new services appearing every day, which is why it is recommended to address professionals who follow all the developments and trends on the matter.
Pioneering Artists
From Canadian singer Grimes to American band Kings of Leon, many artists are now using Non-Fungible Tokens, a technology securing the authenticity and traceability of digital work. Grimes auctioned 5.8M $ of digital art pieces within a few minutes back in February.
NFTs are taking the music industry by storm, with countless examples shaking up the art market, for example setting the record sale of digital work by Beeple at 50M$ or with Kings of Leon and Grimes selling over $ 25 million worth of Non-Fungible Tokens since February, according to Music World Business magazine. Many musicians are now turning to NFTs, from The Weeknd to Eminem, Linkin Park, DeadMau5, and many others.
This new gold mine for artists can be applied to both visual arts and music. While some big names in music are taking advantage of this craze by selling digital works of art, others are looking to rethink the musical experience itself. Earlier this year, in March, King of Leon made the buzz by announcing that they would be releasing their new album in the form of NFT. The album is available on Spotify and other platforms, but the band also sells an NFT version of it, with unreleased material included for 50$. The American rockers also offer 6 NFTs named Golden Tickets, granting access to any concerts from their upcoming tour with a VIP pass. The group has made over 2M$ for the album’s sales.
NFTs: Artists’ New Best Friend?
NFT clearly offers new perspectives for artists looking for alternative ways of making money, at a crucial time when the streaming era lacks the will to do so, due to an unequal and very low royalty system.
Although we are still witnessing the birth of a new phenomenon, one thing that is certain -> the idea of assets on the blockchain isn’t going away, and NFTs will have a major impact on the future of art and music. MusicPromoToday has been actively invested and studying the NFT and blockchain space and how it’s expanding the music industry since late 2020. Stay tuned, we are soon launching our NFT music marketing campaigns. Limited access, exclusive and only for select artists. Keep reading our stories every week to say ahead of the curve. Follow us on Instagram.
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