From the inception of blockchain technology, it has birthed massive disruptions across industries, including the music industry. According to Footprint Analytics, Music NFTs represent 0.11% of the NFT market. NFT is the rave of the moment in the music industry due to the similarities it bears with unique works of creative and artistic pieces on which the industry depends. It is, therefore, no surprise, that NFT has a huge effect on the music industry. The possibilities of creating digital assets out of musical compositions, audio recordings, performances, shows, merchandising, live tickets, fan sub_script_ions, and so forth have opened a whole new door of artistic exploitation for musicians and other actors in the music industry. With the purchasing power of NFTs in the marketplace, it's hard to see it phased out in the music industry. NFTs have become a huge source of income for musicians. and because of this, it's hard to see them phased out of the Industry. All these and more are elaborated upon in this piece.
Your first introduction to NFT is most likely viral news about the value they fetch in the marketplace. Before delving into how NFTs have affected the music industry, let's consider definitions of the term.
What is NFT?
To appreciate this subject, we will begin by explaining what NFTs are not.
What are fungible items? These are items that are replaceable with another item of the same value. For example, every 10-dollar bill is replaceable with another 10-dollar bill because they carry the same value.
By this, we know that a Non-Fungible Token (NFT), on the other hand, is unique and irreplaceable! There can never exist two original Monalisas, Van Gogh's Starry Night Painting, or Christ the Redeemer Statue in Brazil. Hence, the heavy protection placed on these artifacts whether in museums or by the hosting government because of their intrinsic value of originality. In the same way, NFTs are one-of-a-kind, thereby making them ideal for works of art like paintings, audio recordings, songs, photography, GIFs, and other creative endeavors. This explains why NFTs earn a huge sum of money when traded.
NFT and the Music Industry
Source: Snoop Dogg - B.O.D.R
One of the greatest desires of musical artists is the ability to exploit their artistry to the fullest, and NFTs provide the perfect opportunity for that. According to Water & Music analysis, music NFTs sales totaled $86 Million in 2021 and it is expected to rise in 2022. Popular musicians like Snoop Dogg, The Weeknd, and Shawn Mendes have launched versions of NFTs based on their music and made a sizable amount of money.
According to a source, in 2021, the sales of NFTs in the American music industry hit $21 billion, surpassing the $100 million of the previous year. In that same year, 3LAU's 33 NFT collectibles from his album, Ultraviolet, sold for $11.7 million at auction price.
Coming into 2022, Snoop Dogg announced that his label, Death Row, will be an NFT label. Certainly, blockchain technology in the form of NFTs and other digital assets has given musical artists other opportunities to monetize their talents.
Apart from this, they can be used as a form of branding or P.R in which case fans are rewarded with NFTs for supporting the artist. There are instances where tickets to a concert have been converted to NFTs allowing fans the privileges of attendance without worrying about losing their tickets. Other options are creating digital assets with special offers, like early access to new songs, backstage privileges, seats to future shows, and so on.
How to Create NFT for the Music Industry
Musicians can create NFT without any prior knowledge of programming. By enlisting the expertise of NFT-creating services, they are good to go. Another way is to use smart contracts utilizing programs like Ethereum or Electro-Optical System. Whichever of the services are used, they must ensure that it is legitimate to avoid being swindled. Also, consideration of service fees should be factored into the total value of the NFTs.
How NFT affect the Music Industry
Some of the disruptive use of NFTs in the music industry are prevalent in the area of royalties. It is trite that most musicians are dissatisfied with royalties earned from their musical compositions, but with the advent of NFTs, they can earn much more.
Examples of such include fans buying NFTs based on royalties of streamed songs, earning cryptocurrency from tracks created on a blockchain, purchase of NFTs versions of songs, to mention a few. All these once created, cannot be duplicated by another. A remarkable fact about all these is that the musician can earn from resales of these NFTs.
Not only these, but NFTs have also generated an avenue for musicians to bow out of unfavorable music contracts with labels. Instead of relying on bankrolling from a third party, they can directly make money from their fan base through NFT sales of their songs and other artistic products.
Finally, musicians don't have to deal with the heavy barriers that come with garnering the attention of a music label on the NFT blockchain technology. As long as they have a service provider, they can mint their music and sell it to their fans.
From the foregoing, it is obvious that NFT has created another level of avenue for proprietary rights, distribution channels, massive income for artists, and much more in the music industry.
Future of NFT in the Music Industry
Although some believe NFT is a meantime craze-of-the-moment, others are positive that it has come to stay. With popular musicians like Neyo, The Game, and some other partnering music legends creating an NFT investment fund known as "The Meta Panther Club'', there are reasons to believe that NFTs will remain in the music industry.
Author: Gate.io Observer: M. Olatunji
* This article represents only the views of the observers and does not constitute any investment suggestions.
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