Almost fifteen years ago a new era began to dawn on the world. Apple’s first iPhone had just been released and a tidal wave of applications flooded in behind it.
The technology, which might as well be magic, was nothing short of revolutionary. Developers, tech entrepreneurs and industry heads quickly followed, scrambling to revolutionise everything else.
For the music industry, that revolution was music streaming.
In 2008, Spotify allowed anyone with an internet connection to now appear on the same stage as the biggest musicians in the industry. Yet it still wasn’t the utopia moment so many of us had been dreaming of.
In the years that followed, several more music streaming services began to appear and musicians began to notice something sinister was at hand. Big label money poured into the back pockets of the CEOs who owned these growing giants, and black market-style websites turned “pay-for-play” into an almost legitimate business model, eagerly pouncing on anyone naive enough to fork out their savings for a spot on a playlist, new followers, track likes and even streams themselves.
This utopia turned out to be nothing more than the latest iteration of big labels and big corporations dominating the music world.
Enter the NFTs
In the past eighteen months, Non-Fungible-Tokens (NFTs) have been mocked, laughed at, “died out”, sold for millions of dollars and reincarnated into just about every animal you can think of.
Even more recently, however, musicians have begun to catch on to the massive potential that NFTs hold and are finally beginning to realise, along with the rest of the world, that not only are NFTs here to stay, but they’re actually bloody useful.
How many streams does your favourite indie musician have on Spotify? Ten thousand? Fifty thousand? One hundred thousand? It is, however, a small return, as you would have only earned US$40, US$200 or US$400 respectively. Their mixing engineer probably cost ten times that.
When the pandemic of 2020 put the brakes on live entertainment, musicians were forced to think outside the box and look for ways to earn revenue outside of traditional merchandise sales or music streaming.
While it’s clear that music NFTs are going to play a vital role within the music ecosystem, the COVID-19 pandemic rapidly increased the speed at which musicians rushed to the new technology; jumping from a sinking ship that was doing them little good in the first place to one that offered them genuine growth opportunities.
Also Read: How blockchain is giving a bigger boost to musicians than streaming startups
What NFTs do is allow musicians to connect directly with their audience, cut out the middleman and sell to fans at the price they think is most appropriate. Mintsongs, Rarible and Opensea are just a few examples of NFT marketplaces helping musicians take back control of their work and their money.
Not only that, musicians can add utility to their NFT, giving those that hold them infinite added extras. These extras could be entered into a concert or website, and give holders first access to new music or content; the options are endless and they’re part of what makes NFTs so valuable and so exciting.
Would someone buy an NFT if they didn’t buy the song on iTunes?
That’s a good question. And the answer is: They probably won’t.
NFTs does not magically guarantee that the music is now good or indeed worth anything, but what they do can be broken into two sections.
The first is that NFTs make music collectible again. The unique collection aspect of CDs and vinyl that musicians and fans enjoyed has been lost for almost two decades. In the same way that Netflix killed off DVD sales, music streaming decimated both physical and digital music sales.
We have collectively opted for convenience over paying someone what they’re worth and we’re only hurting those we need to prop up the most: the ones making the art!
If a musician can find the right balance between scarcity and utility while offering their fans some amazing art, the sky’s the limit.
Second, is the money that NFTs can make. Remember how much ten thousand streams get you on Spotify? Sell two NFTs to two fans of your music for US$20 each and you’ve just done the same thing, and the only person taking a cut is you, bar a small percentage the market owner takes (typically one or two per cent).
Also Read: Social music creation platform BandLab closes US$65M Series B round
As the word gets around, how many musicians do you think are going to bother chasing streams?
And then there’s the resale value.
Let’s say that your favourite indie musician drops a new single, which they minted as an NFT, which is one of 50 limited copies. Anyone holding this single in their wallet also gets access to any show they’ll play in their hometown and entitles holders to a free t-shirt that they can claim through the website.
They also decided to set the royalty percentage fee (the money you get from each concurrent sale) to two per cent. If all these NFTs were sold for US$10 each, the musician just made a quick US$500 and gave you something tangible that you actually own and use. If one of the fans decides to sell theirs for US$200, earning the musician a bonus of US$4.
Whether it was Beeple, Bored Ape, Gary V or all three, NFTs are now part of the mainstream. We are beyond the tip of the iceberg and those that aren’t in aren’t necessarily late, but they have some catching up to do.
NFTs and blockchain technologies have matured more rapidly than anything seen since the dot com era, and the infrastructure to support and sustain it all is keeping up with the frantic pace.
In order for savvy musicians to break free from the chains they unwittingly shackled themselves in throughout the past decade, they need to catch up to the future they were promised.
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